Column: Privacy rules impact internet ecosystem

Daniel Lyons

President Trump recently signed a joint congressional resolution that repealed the Federal Communications Commission’s privacy rules. The debate prompted an unusual amount of misleading sturm und drang. Let’s understand what’s really at stake.

There is a common misconception that Congress stripped Americans of privacy rights. But consumers have the same rights today that they did before the vote. The joint resolution repealed an FCC order that was not scheduled to take effect until later this year. By repealing these rules, Congress preserved the status quo and consumers should see no difference because the law today is the same as it has been since at least 2015.

The purpose of repeal is to restore a level playing field among digital advertisers. Internet-based companies such as Google and Facebook are subject to Federal Trade Commission regulation, which requires companies to notify consumers regarding what information is collected and how it is used, and to allow them to “opt out” of such collection efforts. These rules also governed broadband providers until 2015, when the FCC inadvertently stripped the FTC of jurisdiction when it reclassified them as common carriers.

The FCC could have corrected this error by simply applying the FTC rules to broadband providers. But it instead applied a stricter opt-in rule, which prohibited broadband providers from using consumer data unless the consumer gives explicit permission.

Importantly, under both regimes, consumers ultimately control how their data is used. The only difference is the default rule: the FTC allows Google to use your data unless you say no, while the FCC would have allowed Verizon to use your data only if you say yes. This is a trivial distinction for consumers — but it would have given Google a tremendous advantage in the battle for internet advertising dollars, a market Google already dominates.

Additionally, it is a common misunderstanding that broadband providers know more about you than companies like Google or Facebook. Broadband providers can’t really “see” all traffic — they can only gather information on one’s activities at home, while Google can capture data anywhere a person is logged into a Google account or using a Google operating system.

Ultimately, privacy questions cannot be debated in a vacuum. Consumer information is the lifeblood of the internet. Our information is routinely collected by companies, but this is not necessarily problematic. Monetization of consumer data is what helps make Gmail, Facebook, YouTube and other services free — and might someday bring broadband prices down. We cannot debate the value of potential future privacy rules without considering the consequences such rules might have on the broader internet ecosystem.

Daniel Lyons is a visiting fellow at American Enterprise Institute’s Center for Internet, Communications and Technology Policy.