The EU is apparently thinking of adopting common and highly restrictive privacy standards which would make use of information by firms much more difficult and would require, for example, that data be retained only as long as necessary. This is touted as pro-consumer legislation. However, the effects would be profoundly anti-consumer. For one thing, ads would be much less targeted, and so consumers would get less valuable ads and would not learn as much about valuable prodcts and services aimed at their interests. For another effect, fraud and identity theft would become more common as sellers could not use stored information to verify identity. Finally, costs of doing buisness would increase, and so we would expect to see fewer innovations aimed at the European market, and some sellers might avoid that market entirely.
Privacy in Europe
5 responses to Privacy in Europe
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January 27, 2012
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I think you left out another downside: The fact that ads are less useful to consumers means less revenue for those selling the ads. This means less funding for the sorts of neat, free applications they provide (like Gmail, Google Calendar, Google Docs, etc.). If these sorts of policies were implemented more widely, I would expect such free applications to become less common.
“For one thing, ads would be much less targeted, and so consumers would get less valuable ads and would not learn as much about valuable prodcts and services aimed at their interests.”
When the same targeting is applied to pricing you can see how this fabolous technology is potentially detrimental to consumers in that it would facilitate targeted pricing (i.e., first degree price discrimination). No reason to launch ourselves into a long and trite debate about the pros and cons of price discrimination, please.
“For another effect, fraud and identity theft would become more common as sellers could not use stored information to verify identity.”
Why do you think that every trader needs to be able to verify buyers identity at the point of sale. The ability/responsibility to do so could be delegated to one specialised operator, e.g., VISA, PayPall, without the need that the same personal information being duplicated and stored by a moltitude of online traders.
“, costs of doing buisness would increase, and so we would expect to see fewer innovations aimed at the European market, and some sellers might avoid that market entirely.”
The costs of data mining to enable targeted/behavioural advertising are huge, and definitely not core business. In the end it would be tantamount to an arms race where every company would invests loads to just catch up with each other to the benefit of a few tech giants.
It is worth noting that this all fad about curation, targeting and so on runs contrary to the old age concept of brand reputation based on past experiences and world of mouth – i.e., strong reputation would render these marketing techniques redundant. Makes you wonder why businesses are so keen on it, doesn’t it?