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Google's Testimony: We Don't Do Anything Bad; Our Competitors Do!

Last week, the House Energy and Commerce Committee began an unnecessary investigation into behavioral advertising practices. As I reported yesterday, Yahoo responded by making its targeted ads opt-out, but also heartily defending the practice. Google, on the other hand, spent most of its letter to Congress detailing how the search company does not engage in any of those bad practices that evil companies like NebuAd do.

Yahoo's approach is better. Instead of going for the "we're less evil than our competitors" tactic, Google should try defending its use of personal data as good for customers and for the future of the internet. That's what CEI's Vice President for Policy and Director of Technology Studies Wayne Crews did in the Washington Times last week. As Wayne wrote:

The fury in the online privacy debate implies that real, unexploited market opportunities exist in providing online anonymity. A marketer does not necessarily want to know who you are, but how somebody like you acts.

No firm in a free market is lucky enough to "self-regulate," as the FTC puts it. Firms (like Phorm and NebuAd) now under attack for peering too deeply into personal behavior online are regulated by the threat of consumer backlash, competition from rivals, non-cooperation by potential ISP partners, and discontent from investors. There is no such thing as no regulation - the choice is between political control or competitive discipline in a dynamic market.

Clamping down too hard will undermine what the Web can become. Tomorrow's Web page will not look like today's, as "widgets" scooping information from numerous sources become more routine and accepted.