Would Do-Not-Track lead to “data oligopolies”?

The latest critique of Do-Not-Track (the proposed universal tracking opt-out choice for web users) is that it will increase the concentration of consumer behavioral data in the hands of a few companies like Google and Facebook. Only these mega-brands have the kind of relationship with consumers to sustain the consent needed to track them, which means death to the less prominent brands and faceless data traders working behind the scenes. Give consumers too much choice, the argument goes, and consumers will actually end up with less choice about the services they use.

Here’s how it has been expressed from the tracker perspective by one of the largest ad firms (via Digiday):

If opt-in becomes the only explicit articulation of positive consumer choice it may be that three classes of data users are created. The first is a class which are unlikely to achieve an opt-in including most brands and agencies; the second being a very small class of companies that achieve an explicit opt-in for the purpose of online tracking. The third class is those companies who, through the provision, of multiple services obtain an umbrella opt-in that includes tracking for advertising and research purposes. For those readers who have never read the entire user agreements of Google, Facebook, Apple and others they should be aware that the full range of the agreement goes far beyond the right to use YouTube, Gmail or the iTunes store. If opt-in at this level is acceptable to the regulator the effect will be to create a tech oligopoly in targeted advertising. Should this be the eventual outcome it seems unlikely that the real intent of the regulators will be realized.

If consumers are empowered with tracking control, it is true that there will be less data to go around; that is, after all, the point. The very reason people choose Do Not Track is that they don’t want data about them dispersed across thousands of unqualified companies. But on balance, this won’t hurt consumers much for a few reasons:

  1. Data scarcity and oligopoly may well increase the price of data, but that isn’t a price paid by consumers — it’s a price paid by advertisers. In fact, consumers are much more likely to extract value from their data if they have the ability to make it more scarce. Smaller players will need to demonstrate their value to survive; just like the big players who already do.
  2. Don’t assume that smaller ad companies will be shut out of the market. Lacking their own brand, they will need to demonstrate their privacy bona fides more strongly to web and app publishers, who can solicit tracking consent on their behalf. Also, companies like Google and Facebook have already opened up their data sandboxes to hundreds of smaller companies through ad exchanges. Who’s to say they won’t solicit tracking consent on behalf of those data partners (assuming they are qualified)?
  3. In the end, user data may well be safer in the hands of fewer, larger companies, which, by virtue of their brand position, have more to lose from shoddy data practices. These companies will have stronger internal privacy controls and external audits, as is the case already with Google and Facebook.
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