DISQUS

Incorrectly labeling this a tax increase only hurts use tax education and compliance. I understand the political reasons for framing this as a tax increase, but it actually makes the problem worse to further the notion that purchases from out-of-state vendors are currently tax-exempt. These goods are in fact already taxed at exactly the same rate as items purchased from brick and mortar stores--the issue at hand is over who shoulders the collection burden, not whether there should be collection at all!

Use tax compliance is abysmal because use tax education is nonexistent. As soon as California shows its serious about enforcement, compliance will pick up considerably. I bet if the state approached Amazon and Overstock, they could probably get some voluntary cooperation in efforts to audit use tax evaders (I'd say they probably owe the Governor a favor...)

A similar proposal is being included in a slate of desperate revenue-generating measures in Sacramento. I'm finding it is an uphill battle to explain why this will neither achieve fairness nor generate revenue. It seems to me that placing an advertisement using Adwords would qualify under the bill's language as establishing nexus (because Google is based in Mountain View). If I'm an out-of-state company that wants to sell to California customers, but not be forced to collect sales tax, this seems like a fairly good reason to shift my advertising budget to Bing.

Interesting piece, though I think Gomes is off-base to lump Fred Cate's air travel example in with the others. There is a difference between burdening the private sector with complicated privacy regulations, and stopping the government from amassing huge databases of personal information in violation of our civil liberties.

I don't think Jim Harper is the kind of privacy "absolutist" that Gomes has in mind:
http://www.cato-at-liberty.org/2009/05/15/tight...

But won't somebody please think of the children?

This question seems to have invalidated all of your arguments, and the bill passed Judiciary Committee 7-3.

In the future, try to focus less on "reasoned arguments" and "common sense." In the end, it's all about the kids.

Adam--What is a "contract of sorts?" Is it legally binding or not?

It's fine that you "would never rule out legal action against companies that play games with their privacy policies," but what would be the point of such a lawsuit? It would be exceedingly difficult to demonstrate actual financial damages (you and Berin astutely noted that there is no clearly defined harm). Therefore, how could a court possibly enter a judgment against the company? If the privacy policy carries no legal weight, why can't a company play fast and loose with its policies?

See for instance Pinero v. Jackson Hewitt Tax Service

and

In re JetBlue Airways Corp. Privacy Litigation, 79 F. Supp. 2d 299 (E.D.N.Y. August 1, 2005)

I think you missed the point. You may want to change your password...

Wow. That is quite a tirade. Clearly, you are addressing some of the more extreme privacy advocates who want to ban or manipulate online business models. Among moderates, however, I think there is a very legitimate debate surrounding the self-regulatory approach:

Why shouldn't we standardize privacy policies?

Above the pages and pages of legal language, you could have a simple table that companies would be required to fill in to the best of their ability. This would be similar to standardizing food labels in the grocery store. Personally, I find it very helpful that I can pick up two products and immediately compare their nutritional facts. This makes me a more informed consumer before I decide to purchase.

I think that the harm for LBS is much clearer than for other forms of targeted advertising. For instance, we live in a rather litigious society, and there are countless types of civil lawsuits where the plaintiff would benefit from obtaining a detailed log of my every move. If numerous marketers are collecting and storing this information from my mobile device, all it takes is a subpoena.

The other harm would be government officials/law enforcement (as you noted). Let's say a crime occurs at a given location and time. Why wouldn't law enforcement subpoena mobile marketers for a list of everyone who may have been in the vicinity? If this becomes the new method for rounding up suspects, the harm would become quite apparent.

The question is not whether the technologies should be outlawed, but whether consumers should be ensured clear and straightforward notice about when they are being tracked, how long the information is stored, and with which third parties the information shared.

Adam--I agree that Google has done a good job in proactively addressing privacy concerns, but I think you are being too cavalier about LBS services in general.

I saw a commercial this weekend for a new service called RivePoint (www.rivepoint.com) that delivers coupons directly to your mobile device. Who doesn't want to save money, especially in this economy? As you say, it's fine as long as the "you know what you're getting into," but most reasonable people would likely assume they are opting into the service only when they are actually using it. When you shut it down, it's reasonable to assume that you have removed your consent to be tracked.

Yet hidden in the privacy policy, you find:

"This real-time location tracking may occur even when the application is not actively open and running on your mobile device."

Most people would also reasonably assume that information will be collected by and for the service they are signing up for. In reality, RivePoint reserves the right to outsource data collection to third parties, and they take no responsibility for how these data are handled, managed, stored, or shared. In other words, in order for you to really know "what you're getting into," you have to write a letter to RivePoint to find out what third parties might be collecting your information, and then you need to write a letter to those third parties to obtain their privacy policy.

Don't you think there could be more robust notice and consent?

Well, they miscalculated that even with Bush gone, the politics of fear still applies:

http://www.betanews.com/article/House_Republica...

I agree with you, but just to play devil's advocate:

We're not talking about government putting mandates on the free market. This is about government putting mandates on itself to limit spending and save taxpayer dollars. Isn't this entirely consistent with promoting limited government?

Why should government have "the best products that are available?" Using this argument, all government vehicles should be BMWs. As stewards of the taxpayers' money, doesn't government have a responsibility to buy the cheapest possible products that can accomplish the task. Aren't these mandates a demonstration of fiscal responsibility?

If the government "mandated" that all departmental lunches must take place at fast food restaurants, would you still complain? Clearly, this will give McDonalds a "leg up" over more expensive alternatives...

I think your prediction gives these regulators too little credit. They almost certainly learned from their last experience, and will adjust remedies accordingly. For instance, I doubt it will be sufficient to merely offer a version of Windows lacking IE--they will likely be required to strip IE from all versions of Windows sold in the EU. Alternatively, they will exercise their ability to set prices, and ensure that Windows -IE sells for a deep discount over traditional Windows.

And we can't do that, thanks to the search and advertising oligopoly.

Tim Wu's argument is fun--you can apply it to anything (see Tim Lee's post above).

Here's the real question: If you operate a CDN, does that make you a "broadband service provider"?

In the Dorgan NN bill, "broadband service provider" is defined as "a person or entity that controls, operates, or resells and controls any facility used to provide broadband service to the public, whether provided for a fee or for free."

If these servers are co-located within the ISP networks, aren't they facilities used to provide broadband service?

Even if Google did not violate NN, doesn't edge-caching now make them subject to any NN legislation? Therefore, don't they have to offer non-discriminatory edge-caching on their co-located servers to any business on the Web? Therefore, if these edge-caching servers serve exclusively Google content, isn't that a violation of NN?

I mostly agree, but have never understood this argument:

"As much as it stemmed illegal immigration, a national ID and background check system would send law-abiding American citizens into a bureaucratic identity vortex."

Don't we already have a de facto national ID (albeit a very poor one)? It's called the social security card. As an American citizen, I cannot legally work in my own country without producing this ID card. Glitches in the SSA database already send plenty of law-abiding American citizens into an "identity vortex." It seems like libertarians live in denial on this point. As long as we don't call it a national ID, we don't have one?

They are permitted to spend up to 5% of their budget on this type of lobbying. I would imagine that it doesn't cost very much to draft and send a mass e-mail.

This is really Adam's domain of expertise, but here's an Amicus brief submitted by Sen. McCain in support of COPA:

http://supreme.lp.findlaw.com/Supreme_Court/bri...

Thanks for this post. How can McCain oppose net neutrality, but simultaneously embrace wireless net neutrality? Isn't this like saying, "I believe the government should take more money out of people's paychecks, but I categorically oppose tax increases."

Let's be honest here. Do you really think McCain has read Wu's piece on wireless Carterfone? Of course not. It is no coincidence that he is receiving tech advice from Meg Whitman (former CEO of eBay/Skype) and Pablo Chavez (senior Google lobbyist and former McCain chief counsel).

McCain opposes "unnecessary" regulation of the Internet, and you proclaim:

"Even a hardened Ron Paul/Bob Taft/Grover Cleveland/Jack Randolph-survivalist/libertarian-crank like me can rally behind that banner."

Really? As James pointed out last week, the FCC currently "does not regulate the Internet or Internet Service Providers." By including "unnecessary," he commits to begin regulating the Internet...as long as its "necessary." This is a loophole any lobbyist can drive a truck through. Defining "necessary" regulation is like defining "reasonable" network management. As long as Meg Whitman and Pablo Chavez are involved, my guess is that "necessary" will mean any regulation that benefits Skype or Google.

Furthermore, did you notice that McCain also released "Ensuring the Personal Security and Privacy of Americans in the Digital Age." Essentially, you can think of it as the McCain manifesto on protecting the children. It reminds us of his staunch support for COPA, and his sponsorship of COPPA. Obama has him beat by a mile on this issue:

"Obama values our First Amendment freedoms and our right to artistic expression and does not view regulation as the answer to these concerns. Instead, an Obama administration will give parents the tools and information they need to control what their children see on television and the Internet in ways fully consistent with the First Amendment."

In Alex's defense, I don't believe he is calling for government action to force his vision on Apple. His opinions appear to be nothing more than the rantings of a frustrated Apple customer. Considering his general affinity for the company and its products, he is doing exactly what he should be doing in a free market--complaining loudly and hoping that the company will listen. If throngs of customers agree with Alex and threaten to switch, the company will change its policies voluntarily.

Don--Microsoft is already attempting to buy its way into the market (this is how the Live Search Cash Back program works).

Wouldn't it be amusing if Google turned around and accused Microsoft of predatory pricing? As you describe it, Microsoft would technically be diverting profits from its software monopoly to offer advertisers "below market" rates.

As Declan posted yesterday, antitrust can be molded to suit just about any purpose...

The lawbreaking you describe does not fit this situation. Aren't all of these examples offenses against the state (or "the people")? Isn't copyright violation a civil offense against a private party?

What if I steal your lawnmower and put a big sign on my lawn that says "HAHAHA I STOLE YOUR LAWNMOWER." You would seem to be arguing that because the lawnmower resides within my walls, you can't sue me to get it back.

This is the argument put forth by YouTube users who infringe Viacom's copyrights. By posting a video, they blatantly advertise their copyright infringement and declare legal sanctuary within YouTube's walls.

Jim,

When the Washington Post referred to Google as "Big Brother," you wrote at length about this faulty analogy:

http://techliberation.com/2008/05/23/headline-w...

How is this analogy different?

J. Edgar Hoover was not the CEO of a private company...

I completely agree that data minimization is needed to prevent the government from tapping vast databases of personal information. However, the Google/Viacom situation concerns a dispute between two private parties, not government data-mining.

Why are you concerned that Viacom could use this information to sue copyright infringers? These users are stealing Viacom's property. Why shouldn't they be sued? Users should know that privacy is not a shield for theft, unless you are arguing that Google customers enjoy some search engine/user confidentiality.

We obviously don't want the legislature micromanaging the font size of text on home pages, but I think you are too cavalier in your treatment of this issue.

On the Internet, privacy is currency. The point of the privacy policy is not to protect a user's privacy, but to disclose how much privacy the user must forfeit to enjoy the service.

To me, a site without an up-front privacy notice implies that the service is "free," when in fact it is not. While the California law may be absurd, existing protections against fraud may apply here. What if a restaurant were to change its prices after you've finished your meal and stick you with a bill much higher than expected?

If you have to use the service before you can access the privacy policy, you've already paid before learning the price.

As you imply in your last sentence, this would seem to apply to all third party transactions. Do you read this to include display ad platforms?

Another important point that I see here:

The NY law enshrines the pay-per-click advertisement model as the established, final, and perfect system for online advertising. Once it is defined and settled as a matter of law that this is how online advertising should be defined, it excludes all other (potentially superior) models.

What about the new Microsoft Live Search CashBack model? If this program proves successful, advertisers will prefer to pay based on the effectiveness of the advertisement (whether the customer actually makes a purchase) vs. pay-per-click. Based on this New York law, would sites that advertise using Microsoft's display ad platform be liable for sales tax, while those using Google/Doubleclick's would not?