Americans Should Have More Control Over Their Data

If you’re ever expecting a child, Target wants to be one of the first to know. The company has invested in research to identify pregnant customers early on, based upon their purchasing behavior. Then, it targets them with ads for baby gear.

While companies such as Target mine data about products their customers purchase from them (like prenatal vitamins) to send them personalized ads, many also rely on information gathered about us on the web -- like what we search for on Google or email our friends. That lets them realize we’re planning a vacation to the Grand Canyon, for instance, and send us ads for local hotels.

Many people think that it’s an invasion of privacy for companies to gather sensitive data -- such as information about our relationships and medical history -- and exploit it for commercial purposes. It could also widen social divisions. For example, Facebook determines our political beliefs based upon the pages we like and preferences we list on our profiles. If algorithms peg us as conservative or liberal and we’re targeted with ads accordingly, we may end up never understanding what people of other political persuasions think. Internet activist and author Eli Pariser has argued that America is so politically polarized in part because social media sites leave us in “filter bubbles.” Targeted political advertising could have the same effect.

That’s part of the reason why, in May, a new regulation will go into effect into the European Union giving citizens the “right to object” to “processing of personal data” about them for marketing and other purposes. As Andrus Ansip, the European Commission vice president for the digital single market, tweeted, “Should I not be asked before my emails are accessed and used? Don't you think the same?” The new law overcame serious opposition from the advertising industry, whose representatives argue that it will disrupt ad revenues needed by the media. Experts say that websites will have to provide more valuable content to users as an incentive for readers to allow them to use their data.

Here in the U.S., most ads are bought through exchanges that allow advertisers to target people based upon data about them. Companies can choose to buy ads that will be seen, for example, by women who live in a particular ZIP code and graduated from a certain school. But according to guidance established by the Digital Advertising Alliance -- a consortium of industry trade associations including the American Association of Advertising Agencies, the Association of National Advertisers, and the Better Business Bureau -- consumers should have “the ability to exercise choice with respect to the collection and use of data.” Two members of the alliance accept consumer complaints and do their own research to identify violations of the rule. They work with companies to help them fix problems and report violations to regulators.

While the principle behind the new EU law could justify wide-ranging new regulations and restrictions on how companies throughout the world do business, James Ryseff, a former Google engineer, says it’s likely that initially it will simply allow users to opt out of the “cookies” that track internet users as they surf the web. Although this will reduce the amount of data that tech companies can collect, it doesn't truly allow users to opt out of targeted advertising, since businesses can still use the information they gather through other techniques -- such as in-store purchases -- to classify and reach customers. That’s why, Ryseff says, Americans should have more sophisticated ways to determine exactly what advertisers learn about us.

First, for example, we should be able to decide whether companies are able to gather generic data about who we are (such as our age, gender and location) or information about what we’re doing (such as researching a medical condition) -- or neither, or both. “In general, I think ‘What I do’ information has a greater ability to freak people out,” Ryseff says. “Used incorrectly, it makes you feel like Google is stalking you.”

Second, Americans should get to decide where and when our data is tracked. For example, some people might be more comfortable being tracked on a search engine that knows their buying behavior and can make recommendations accordingly, but less so on personal email which can identify private facts about their lives -- or work email which might contain proprietary information. (Google previously used data from the content of users' emails to target them with ads, but pledged in June to stop the practice.) And we might want to temporarily stop allowing search engines to track our activities when we’re looking up something private, like medical symptoms.

Third, we should get to decide whether we’re willing to be targeted with ads based upon our own behaviors or people algorithms have decided are like us. Ryseff says:

Big data often groups people based on inferred traits, but the results of that could be problematic. GLBT people or pregnant teens could be outed, but also people with an undiagnosed illness might be identified -- and recommended a cure. Or, you might discover a cool new band or a new favorite clothing store.

Ryseff says that, if Congress were to pass such a law, lawmakers would need to mandate that Americans have a set of options about how their data is collected and used. To make it easier on us so we don’t have to indicate our choices on every application we use, companies such as Microsoft, Apple and Google could build in control panels that would allow users to answer these questions. Then, other apps could tap in to these privacy platforms to see our selections.

I bet most Americans wouldn’t want companies to know they’re pregnant before their families do, but many would want to be the first to know about appealing new products or services. If advertisers are now smart enough to diagnose our medical conditions without us even knowing it, lawmakers need to get savvier about giving us the choice to opt out.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.