April 4, 2011

USA: Restrictions On Advertising Could Cost Internet Users

NEW YORK / Forbes.com  / Daily Newsletter / Opinion / April 4, 2011

Increasing privacy regulation would lead sites to charge Web surfers for content that has traditionally been free writes Adam Thierer in a comment titled:  Birth Of The Privacy Tax

Adam Thierer is a senior research fellow at the Mercatus Center at George Mason University. He is the author or editor of six books on technology and media policy

Generations of economists have taught us that there is no such thing as a free lunch.

Advertising has made the Internet and digital services seem like a free lunch.

Social networking sites are free.  Searches are free.  Review sites are free. In fact, it's hard to find many online services we pay for these days. But there is no free lunch here.

Advertising powers the Internet and the digital economy. By collecting a little information about us or our Web-surfing habits, online sites can tailor ads to our liking, which helps keep online prices low or even at zero.

Most consumers gladly accept this deal that keeps the digital goodies flowing. However, critics who say such ads are "creepy" raise privacy concerns and call for regulation.

Although they have not made a clear case of harm, some privacy fundamentalists who oppose virtually any form of data collection or ad targeting have elevated this concern to near "techno-panic" levels and are demanding action. Congress and the Federal Trade Commission (FTC) appear ready to oblige with a so-called "Do Not Track" mechanism that would make it easier for Web surfers to opt out of any data collection.

Increased privacy regulation or a "Do Not Track" regime could have serious unintended consequences, however.

Privacy advocates are pressuring Congress and the Obama administration to regulate more tailored forms of online advertising.

If some regulatory advocates have their way, Web surfers could soon be paying the equivalent of a "privacy tax" on Internet sites and services.

Read  Adam Thierer's full column

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