Big Tech, Obama And The Politics Of Privacy

The White House announced major privacy initiatives this week amidst a growing hubbub over how technology companies use consumers’ personal data. The news sheds light on both the privacy debate and on how the players involved are attempting to maintain political control of the issue.

The announcement itself turns on a “Privacy Bill of Rights,” which sets out seven principles such as transparency and individual control. The Bill of Rights is part of an administrative white paper that will lead to legislation giving the Federal Trade Commission further tools to oversee companies’ use of consumer data.

The other big news yesterday was that advertisers and major internet companies will let consumers opt out of tracking “cookies,” a form of browser technology that lets companies follow people as they move around the internet. Companies’ use of cookies has produced a series of outcries following reports that Google (NSDQ: GOOG), Facebook and others sometimes used them without permission.

Some reports have described the industry deal as a “Do Not Track” agreement but there is no firm evidence yet that the companies will stop the use of behavioral tracking altogether. According to the White House report:

The meaning of Do Not Track and the best mechanism(s) for implementing it are still under discussion and will require continuing discussions among stakeholders

The agreement will reportedly include 90 percent of industry advertisers, including firms like Google, Yahoo (NSDQ: YHOO), Microsoft (NSDQ: MSFT), and AOL (NYSE: AOL).

The White House announcement was made in concert with the Digital Advertising Alliance, an umbrella group that has been scrambling to promote a self-regulation system for privacy. The DAA described the deal as “another important milestone in the advertising industry’s 40-year history of effective self-regulation.”

So what does this all mean? For now, the lack of details in the grand privacy announcements means it is unclear when (or if) consumers will be able to turn of behavioral tracking entirely.

But in the short term, the “Privacy Bill of Rights” is a political winner for both President Obama and for the tech companies with which he is ideologically and financially allied.

More specifically, it allows the President to appear out front on the privacy debate at a time when Republicans also want to make political hay out of the issue. Here, for example, is a screen shot of a political ad for Obama 2012 that appeared right when the news broke last night:

For the internet companies, the announcement will permit them at least a partial reprieve as they lobby to minimize regulatory oversight. Their ability to do so is shrinking, though, as other political actors continue to step into the privacy arena.

On Wednesday, for instance, California’s Attorney General announced an agreement with six major companies, including Google and Amazon (NSDQ: AMZN), over the way the mobile industry handles apps and personal data.

And the same day, dozens of state attorneys general sent a letter to Google CEO Larry Page, expressing “strong concerns” about the company’s impending privacy changes.

The White House is holding a press conference on the Privacy Bill of Rights on Thursday.