Phil Corwin the attorney who represents the ICA just posted its site, an article about Federal Online Privacy legislation that maybe proposed and its possible effect on domain names.
Here is the article in full.
“””The Wall Street Journal’s (online.wsj.com ) July 31st issue carries a front page story, with extensive sidebars, titled “The Web’s New Gold Mine: Your Secrets”. It’s the first of an eye-opening series. If the remaining installments are as revelatory as this opening salvo, it will likely stoke the growing calls on Capitol Hill for federal online privacy legislation.
Domainers need to pay attention to this debate, because it has potential to drastically alter the technologies and economics of online advertising. And advertising is the lifeblood of domaining.
Here’s a sample from the article:
The Journal conducted a comprehensive study that assesses and analyzes the broad array of cookies and other surveillance technology that companies are deploying on Internet users. It reveals that the tracking of consumers has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.
- The study found that the nation’s 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.
- Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to “cookie” files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.
- These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.
Not coincidentally, Congress held two hearings on this subject in the past two weeks. You can read the testimony and watch the webcasts at
Congress is going out of session until mid-September, and will then be in for just a few short and highly partisan pre-election weeks, so no online privacy bills are going to be enacted this year. But when you watch these hearings you see that online privacy is not a partisan issue – that is, while Democrats and Republicans may differ on what approach new law should take, they are getting in sync on the basic proposition that something should be done to catch the law up with the technology. Some issues percolate for years on Capitol Hill and then reach a critical mass that propels legislation forward. That inflection point may well be arriving for privacy legislation, especially when an already distrustful-of-institutions public (known every two years as “voters”) realizes that nonconsensual technologies have been installed on their computers that track and analyze every keystroke, creating files that are “anonymous” in only the narrowest sense.
How will this debate affect domainers?
That’s not at all clear. For example, the “BEST PRACTICES Act”, H.R. 5777, introduced by Rep. Bobby Rush, would require “covered entities” to establish notice and opt-out consent requirements for first party data collection and use, as well as generally require opt-in consent for the transfer of personal data to third parties. Are parked or developed web pages “covered entities”? That’s not at all clear from the proposed statutory language, which wasn’t drafted with domain monetization in mind – although it does seem to exclude contextual (as opposed to behavioral) ads from the category of unique personal identifiers (such as a cookie) used to store individual information or maintain a preference profile.
Many domainers have no control over or idea of the technologies being employed to serve the ads shown on their domains, but it’s quite possibly one that employs a unique personal identifier. After all, Google is by far the largest provider of online ads, and the Journal reported:
Some two-thirds of the tracking tools installed—2,224—came from 131 companies that, for the most part, are in the business of following Internet users to create rich databases of consumer profiles that can be sold. The companies that placed the most such tools were Google Inc., Microsoft. and Quantcast Corp., all of which are in the business of targeting ads at people online. (Emphasis added)
The online ad industry is responding to the prospect of new law and regulation with the very true observation that it’s advertising that pays for most useful and valuable online content, as well as explanations that the various online behavior tracking and ad serving companies provide disclosures, claim they don’t identify individuals, provide disclosure and opt out at their websites (or at aggregated industry websites like http://www.networkadvertising.org/managing/opt_out.asp ), and help make sure that we only see online ads relevant to our interests. All that is true, but legislators may still decide that a business model that expects an unsophisticated public to read dozens or hundreds of disclosures and then make informed choices doesn’t cut it – especially if they think that taking action can help boost Congress’ dismal approval ratings.
Meanwhile, in questioning before the Senate Commerce Committee, FTC Chairman Jon Leibowitz said that he personally favored an opt-in requirement for all behavioral tracking – and, more importantly, that the FTC was leaning toward proposing a “Do Not Track” Registry for cyberspace that emulated the established “Do Not Call” Registry that has staunched the former flood of telemarketing calls. This raises the prospect that the online ad world will face the choice in the next two years of cutting a deal with a “Good Cop” Congress to avoid the more onerous proposals of a “Bad Cop” FTC.
In the long run, restraints on behavioral advertising may well increase the value and utility of good generic domains. After all, you don’t have to track someone’s behavior across the Internet to know that they are probably looking for something widget-related when they visit widgets.com (currently a parked webpage), and that allows you to serve up highly relevant contextual ads. But the one law that never gets repealed in Washington is the law of unintended consequences. That’s why ICA will be carefully tracking this evolving policy debate and explaining the domain monetization business to legislators to make sure it’s not inadvertently hit by legislation targeted at others.””