Yahoo! and Google have recently announced their promise to let users opt out of cookies online.  This comes after the request from the US Committee on Energy and Commerce, last week, that 34 Internet companies, including these two giants, make available more information about the data they collect from Web surfers and further detail on how this data is used to customize advertising.  The latest move in a saga that has been going for some time, will this gesture allay Congress’s concerns over the collection of user data or will decisive legislation in favour of personal privacy be laid down soon?

On 8th August, Yahoo! said in a letter to the House Committee on Energy and Commerce that it will henceforth present their customers with greater choice in the form of an opt-out option of customized advertising on Yahoo.com.  This is in addition to their current opt-out policy for tailored adverts served by Yahoo! on third-party networks. To be available within the month through a link in the company’s privacy centre, the user can access the service from the homepage and almost every page on the Yahoo! network.

Google expanded a little more in their letter, noting that they do not derive information about users to better target them with adverts.  Yet, they went on to argue that:

“Though it is not the focus of our business today, we also believe that behavioural advertising can be done in ways that are responsible and protective of consumer privacy and the security of consumer’s information.”

Critics have expressed their concern that Yahoo! and Google’s move is an empty gesture.  They maintain that it does not change the fact that the companies continue to collect data about their users even if they do not use it to direct targeted advertising to them. 

Furthermore, they argue that although the opt out concession has been promoted by the giants as helping to protect users’ privacy interests, the true reason for the move is fuelled by a desire to appear cooperative as they prepare to contend these benefits of their joint search deal to the Department of Justice.

Playing an evasive game, their offer of an opt-out option, not an initial opt-in feature has been condemned as being with the view that no one will bother opting out and will simply continue as before with the hope that legislation will swing their way.

The principal issue is one of privacy.  While avid supporters of Google and Yahoo! see behavioural advertising as a practical approach to giving consumer’s an experience that is tailored to what products they might be interested in and of course, a massively crucial source of their revenue stream (behaviourally targeted adverts fetch many times the price of untargeted ads), censors at the other extreme, see the collection of data as an outright breach of individual privacy, a kind of Big Brother sort of tracking.

The current climate is leaning towards a definitive legislation, which will set out the legal outlines for future policy.  However, it may be that the resolution lay somewhere in between.  If Yahoo! and Google can prove that the data they collect does not allow them to identify what individual users are doing online and is not kept so that it might fall into the hands of third parties this may be enough to allay consumer fears.

What Google must demonstrate now is the manner in which they will administer behavioural advertising without using cookies and Web-surfing behaviour to know what users are doing online.  As the clock ticks on to judgement day, the key now, is to strike a balance between controlling data about user habits to tailor advertising and showing a consideration for their privacy.

Justin Drummond,

Chief Executive - Media Corporation plc