On Thursday, the Federal Communications Commission (FCC) adopted a new set of privacy rules to shield consumers against Internet Service Providers (ISP), like Verizon or AT&T, from collecting and sharing their sensitive data.
The new rules allow consumers to have more control over any information that ISPs might collect. The ad industry has been speaking out, claiming that the rules will damage their ability to reach consumers. Dan Jaffe, group ex vice president, government relations, at the Association of National Advertisers, said these rules will lead to "less relevant advertising" and that the "consumers are the real losers in this."
At the same time, privacy groups have applauded the FCC for giving more power to consumers. "This rule represents a significant step forward in protecting internet users who have no choice but to expose massive amounts of information to broadband providers," wrote Chris Calabrese, vice president of policy at the Center for Democracy and Technology in a statement. "It reflects the reality that where we go online is private and the people we pay to carry it should treat it as private."
While the official rules have not been published by the FCC as of yet, marketers need to know the following:
1. More privacy means less data for marketers
Within the FCC rules, ISPs can still collect and use data, but consumers will now have more control over the information they share. As it stands, broadband providers can track consumers until they decide to opt-out. With these new rules, consumers will be able to choose to opt-in ahead of time, a route that Jaffe believes many will choose to take. This will make it more difficult for ISPs to build subscriber profiles, which in turn, translates to marketers receiving less individual data to use for targeted ads.
Recent mergers show that ISPs have been looking to adopt more targeted-marketing strategies, such as in Verizon’s acquisition of AOL and bid for Yahoo. In fact, AT&T’s CEO said that this was a major reason why the company is trying to buy Time Warner. It’s possible these new regulations could put a dent in their plans.
2. More data is now considered sensitive
ISPs will still be allowed to use non-sensitive data like email addresses or service-tier information unless the consumer chooses to "opt-out." However, the FCC has now determined that a user’s web browsing history and app usage history are categorized as sensitive, data that marketers rely on the most. This will cut off marketers from being able to see if, for instance, someone landed on a client’s website or how long that person spent on a branded app.
3. ISPs will have to be more transparent
The rules require ISPs to be clear with consumers about the type of information that they are collecting, the purpose behind why they are collecting it and which companies receive it. ISPs must provide this to consumers when they sign up for a service as well as place it on their website or app. This means that more users will be aware that they have the power to provide ISPs with their information.
4. ISPs can still use de-identification data
There is one way that ISPs can still give more data to marketers without relying on the consent of consumers. The loophole here is that ISPs can still collect de-identification data, or data that has been stripped of any identifiable information. However, the FCC is imposing strict rules so that third parties cannot re-identify data.
5. Sites like Facebook or Twitter will have the advantage
These new rules now place ISPs at a disadvantage when it comes to how much data they can offer up to advertisers. Sites like Facebook and Google, known for having access to a massive amount of user data, won’t be affected since the FCC has no jurisdiction over "edge providers." Only the Federal Trade Commission (FTC) has oversight for these, and currently allows consumers to opt-out if they want to keep their sensitive data private.