Permission, Protection, and its Potential Impact on Targeted Advertising

A bill has been drafted in the New York Assembly that would limit the personal info collected by web companies to do targeted advertising. According to the New York Times:

If it passed, computer users could request that companies like Google, Yahoo, AOL and Microsoft, which routinely keep track of searches and surfing conducted on their own properties, not follow them around. Users would also have to give explicit permission before these companies could link the anonymous searching and surfing data from around the Web to information like their name, address or phone number.

Lobbyists have been summoned, and speculation undoubtedly abounds. Could Albany, N.Y. become ground zero for consumer privacy protection online, or is it an exercise in Internet regulation futility?

The Times article points out interesting points that lead to even more questions.

1. While consumers, as Mr. Brodsky explains in the article, most likely do not know the extent to which personal data is being collected and used to send them relevant advertising, is it really harming anyone? Mike Zaneis, VP for Public Policy at the IAB, says that behavioral and third-party advertising isn't harming anyone. Arguments over privacy of all kinds will certainly be sparked again during this debate.

2. Brodsky says he's not out to totally squash targeting, only to inform and allow consumers to opt out. But would permission, by its very nature, essentially take the magic out of online targeted advertising because so many people would remove themselves from data collection?

3. And if enough people did opt out, is Mr. Zaneis correct in his statement that the abundance of free stuff on the web might decrease? (which begs the question: If you had to pay for the social networking/photo uploading/video viewing/widget embedding that you get for free now, what's it worth to you in cold hard cash?)

Perhaps the most important point about the NY Times story is this:

...some Web executives say the Internet is changing far too fast for lawmakers to keep up. “Taking a snapshot of what should be the standard today probably will not be a lasting and durable solution,” said J. Trevor Hughes, executive director of the Network Advertising Initiative, a group of online advertising networks that voluntarily produced and agreed to a set of privacy standards.

Maybe that's the answer. The web is a hurricane; it's in a constant state of flux that's difficult to predict. The web world is changing too quick for even some experts to keep up, and trying to regulate it might just be futile, even for lawmakers with the best of intentions.