Folly at the FTC

Looks like the FTC is thinking about stepping in to more strictly regulate online advertising.  Nobody really likes jargon-filled EULAs, but I’m not at all convinced that there’s any call for the FTC to get involved.  Let’s take a look at the article.

To safeguard consumers, Mr. Leibowitz said that standard rules about the privacy policies of Web sites may need to be established. He pointed to a study that found that people with a high school education can easily understand only 1 percent of the privacy policies of large companies.

Sure, they’re long and complicated, and I don’t doubt that some are explicitly devised to obfuscate.   But that doesn’t mean federal busybodies need to step in.  For one thing, there are plenty of basic business operations in which a typical user probably isn’t going to be able to precisely explain the details of the agreement: cell phones, credits cards, etc. (And these industries are already regulated.) This is, at least in part, because there’s not a significant return on spending the time necessary to fully parse the details of these arrangements.  And that’s fine, even a good thing at times, because it can act as a time saver.

And that brings us to the second point, which is that users need to be willing — and expected — to take some responsibility over what they agree to.

Moreover, if there’s really enough outrage over complex EULAs,  market mechanisms should take care of it. Innovative companies will be able to steal business from their competitors by making their EULAs clear and simple, and the rest of the industry will follow suit.

Also, as the advertising exec quoted in the article says, limiting what sorts of information can be collected about people could potentially have serious chilling effects on innovation.  Right now, the biggest buzz in the advertising and media industries are internet based micro targeting, using the vast databases of self-supplied user information that are popping up right now to deliver ads and services that are customized down to the individual.  Limiting what can be collected, or putting up barriers to collection, has the potential to slow or even stop the developments that are currently bringing us some of the niftiest and neatest web 2.0 apps — and that’s something the FTC should take all pains to avoid.