Deceptive Online Marketing Practices: Microsoft and the FTC

Continuing on from my last post, The Center for Digital Democracy (CCD) and U.S. Public Interest Research Group (US PIRG) filed with the FTC to have the online advertising industry investigated.  But they also want to have Microsoft investigated.


So the first five sections of the filing (A-E) set up the complaint of violation practices in the industry, citing a wide range of companies that collect anonymous navigation patterns of users on web sites.  The filing argues that data mining and analysis allows for customer segmentation and predictive behavior modeling, and ultimately behavioral targeting and individual targeting based on anonymous characteristics.


But what this document is really designed to do is say that while all of these practices exist in the market, and while they are all wrong and should be investigated, legislated against and prevented, the biggest threat is the behemoth, previously convicted, monopolistic target, Microsoft.


The CCD and US PIRG are going after Microsoft with this filing and are hiding behind the rest of their one-sided arguments about anonymous tracking online.  The first 30 pages of the document discuss practices that arguably, don’t really violate privacy any more than other industries or in any manner than haven’t already been widely accepted by users online.


Microsoft has released Adcenter and its Digital Advertising Solutions initiative which will leverage all of the data that has been collected over the years on users of its MSN Web portal, Windows LIVE search engine, Hotmail, IM, Xbox, Office Online, Windows Mobile, Microsoft TV, Adcenter Search, Spaces Blogging Services and Soapbox videos.  They will be able to offer advertiser the opportunity to leverage real audience intelligence and targeting capabilities including demographics and day-part with behavioral targeting.  There won’t be anything particularly new here from what is already available online, it’s just that the sources will be consolidated from Microsoft.


The filers however are freaking out because they feel that Microsoft will be violating people’s privacy by leveraging what they know about people to delivery targeted advertising.  They go specifically to the Microsoft privacy policy and believe that Microsoft will violate its own privacy policy with this new practice.  I have read the policy and I don’t agree.  I just don’t think the policy specifically says they will be leveraging the information to deliver ads, but it also doesn’t say they won’t. 


But I bring this back to an argument that I made in the last post.  Is this really a violation of my personal privacy when I am using Microsoft’s products and services for free?  There is a trade here.  I divulge information about myself so they can deliver ads to me of relevance in exchange for usage of their tools.  The alternative here is not pretty.  Pay for everything. 


Now I believe that we need to give people the right to opt-out.  But I also believe that a site can refuse to give a user access to the site as well or offer them the option of paying for access to the site as an alternative and maybe that is where things will go if this filing is taken seriously.  Microsoft is big enough to tip things in one direction or another if need be.

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