Media Diversity and Online Advertising
Ammori, Marvin, Pelican, Luke, Albany Law Review
I. INTRODUCTION II. BACKGROUND A. Freedom of Press, Media Diversity, and Advertising B. Privacy in Many Forms III. ENTER THE INTERNET A. The Internet Disrupts Press, Increases Diversity B. The Internet Transforms Privacy IV. MEDIA DIVERSITY AND PRIVACY A. Advertising, Media, and the Internet Ecosystem B. Balancing Privacy and Diversity V. CONCLUDING THOUGHTS
In the midst of a fierce presidential election season, in October 2012, The New York Times revealed that the political campaigns of Barack Obama and Mitt Romney agree on at least one thing. (1) Both are turning to personalized data about voters, such as "shopping histories, gambling tendencies, interest in get-rich-quick schemes, dating preferences and financial problems." (2) Campaign workers use this information in their "get out the vote" efforts running up to Election Day. (3) They are debating whether to publicly shame people into voting through social networks or to use the detailed information to "persuade" unlikely voters to do their civic duty. (4) The two major parties are buying into big data; together, they spent $13 million on "data acquisition and related services" in 2012. (5) Even though both campaigns claim to follow the highest ethical standards and industry best practices, (6) and although the Federal Trade Commission (FTC) and Commerce Department have both emphasized the importance of "notice" to consumers and choice, (7) it remains unclear whether Americans understand know how much information the two presidential campaigns or their consultants have. (8) Headlines like Forbes's "The Obama And Romney Campaigns Know If You've Visited Porn Sites" suggest much of the public does not yet know these facts. (9) A member of Romney's campaign told The New York Times: "You don't want your analytical efforts to be obvious because voters get creeped out.... A lot of what we're doing is behind the scenes." (10)
Despite the revelations of such massive information collection of personal information, there has been little uproar--likely because of the countervailing benefits of this activity. (11) Considering the value of wide participation in a democracy and our nation's chronically low turnout rates, (12) anything increasing electoral participation seems like a good thing. In addition, for centuries, political candidates have used information about voters to craft an argument that would persuade a particular voter, from knowing their gender to knowing their union membership. (13)
Consider a second, seemingly unrelated, example. Ars Technica is an online-only publication with millions of readers across the country. (14) It specializes in technology news and informed analysis. (15) In March of 2010, the site's editors experimented with their audience by "blocking" content from readers who visited the site using ad-blocking technology. (16) The experiment worked, though it angered some of their readers. (17) Some twenty-five thousand readers responded by whitelisting the site (meaning they removed Ars Technica from the sites whose ads were blocked), while another two hundred readers paid for premium subscriptions, (18) The following day, the publication explained the "experiment gone wrong," detailing the importance of advertising to Ars Technica and others outlets like it, and asking readers to consider the real harms to online publications caused by ad blocking, such as staff layoffs and reliance on more advertising "of a truly questionable nature." (19) The experiment also surprised the editors; they didn't realize many people were blocking ads unintentionally, not understanding the harm it caused to the sites they frequent. (20) From the point of view of a publisher, blocking ads has essentially the same effect as blocking the use of information to generate more revenue from ads. (21) It is unclear whether Ars Technica runs behavioral advertising, but behavioral advertising often generates more revenue than less targeted advertising, and many sites rely on such advertising in part to sustain themselves. (22) Moreover, sites like Ars Technica that host ads are paid on a per impression basis, which means ad blocking can have a significant impact on the revenue they earn. (23) When a user or law reduces the advertising revenue available to the publisher--however legitimate the reasons--the same harms are possible, including staff layoffs. (24)
These two seemingly disparate stories point to the same general tension between privacy and speech. In the first example, the tension is between the privacy of voters' personal information and the speech of political campaigns (as well as voter turnout). In the second example, the tension is between privacy and funding the speech of media outlets online, which has a ripple effect on the media diversity available on the internet. This second tension--between privacy of personal information and media diversity--is the subject of this paper. We do not take sides in the abstract, determining that media diversity should outrank privacy or vice versa. Both are important values. Rather, we believe in the benefit of spelling out a tension that often goes overlooked--in principle, at the margin, there must be tradeoffs between increased online privacy protections and online media diversity.
The paper has three parts. First, we explore these competing interests and their role in American society and law. Second, we discuss how the internet altered the landscape in which these values exist, describing how policymakers and courts reconcile these interests in light of changing technology. Finally, we identify the balance that exists between privacy and advertising in the online age, and conclude by offering suggestions for how to maintain that balance while preserving the somewhat overlooked value of media diversity. In essence, we argue greater engagement is needed between the public, the advertising community, publishers, and privacy advocates. The Worldwide Web Consortium, Do Not Track Initiative, and other efforts are a good start and have shown some success, (25) but clearly more must be done in promoting mutual understanding of the benefits of online advertising, the adverse consequences that advertising may have on privacy, and the importance of media diversity online. We hope this paper contributes to that discussion.
Media diversity and privacy are both important values-recognized as such long before the advent of the internet--that underlie a range of domestic policies and laws.
A. Freedom of Press, Media Diversity, and Advertising
Our Constitution defends the right to a free press and our popular and legal culture celebrates that right. (26) Indeed, Thomas Jefferson said if he were given the choice "between government without newspapers and newspapers without government, [he] wouldn't hesitate to choose the latter." (27) The value of a free press, according to jurists and scholars, includes promoting democratic deliberation, informing citizens' role as voters, unearthing government misfeasance and malfeasance, ensuring "safety valves" for disagreement, and checking abuses of government power. (28) Our tradition recognizes that we must balance the right to freedom of press against other important rights--for example, defamation of personal reputations and divulging national security secrets. (29) Even in these circumstances, the threshold for overriding freedom of the press is, at least formally, very high. (30)
Our constitutional history regarding freedom of press has also placed a paramount value on diversity. In an often-quoted line, the Supreme Court declared in Associated Press v. United States that the First Amendment "rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public. (31) Since that 1945 case, the Court has repeatedly affirmed the importance of this principle, stating that the principle has "long been a basic tenet of national communications policy." (32) So has Congress, when faced with new technologies. (33) Following the Supreme Court, the FCC has called the promotion of diversity one of its core mandates in furthering the public interest. (34) In a previous article, building on the work of Yochai Benkler, Ed Baker, Zechariah Chafee, and others, Marvin Ammori outlined some of the judicial precedents, congressional statutes, and important agency rules furthering the value of diversity in the media from the early days of newspapers delivered by post through the telegraph, telephone, broadcasting system, cable network, and internet platforms. (35) Primarily through "must-carry" rules, nondiscrimination rules, and congressional and agency policies against media consolidation and cross-ownership across media industries, the government has sought to advance diversity. (36)
Unlike some countries that have opted for greater government ownership of media--from authoritarian regimes like China to democracies like the United Kingdom (37)--the United States has generally chosen a more private-sector approach, coupled with regulation to promote important values like diversity. (38) That American private media system has been intertwined with advertising for well over a century. (39) Much of the news media is supported at least partly through advertising to sustain production and ideally earn a profit, (40) This is not a new phenomenon--radio, television, and newspapers were predominantly advertisement supported throughout the twentieth century, (41) Indeed, the genre of soap operas began with the sponsor Proctor & Gamble--to sell detergents and soaps, (42) The deep involvement of advertisers in our media system continues to this day.
Advertising plays a significant role in sustaining media outlets, or at least in adding to their revenues. (43) To the extent those revenues are reinvested to cover expenses, advertising revenue enables them to hire and pay staff, cover a wider range of subjects--in greater depth than might otherwise be possible--and even expand production, all to the benefit of both the outlet and its audience. (44)
At the same time, the advertising system is subject to well-known criticisms and tradeoffs. Critics have argued that the advertising-supported media results in content that is more of an innocuous commodity than a piece of substantive information--"designed to put audiences in a buying mood and to attract a broad cross-section of viewers, readers, and listeners without unduly offending any of them." (45) Another criticism is that the commercial media system can cause journalists to drop specific stories for fear of offending advertisers, thus depriving the public of newsworthy information or distorting the information the public receives. (46)
Weighing these benefits and drawbacks, some argue that the advertiser-based system may be the worst way to fund the press-except for all the other ways attempted from time to time. (47) At the very least, we could have a media system (as we do) that includes a combination of diverse media--some non-commercial, some government-supported, some foundation-supported, and some advertiser-supported. (48) Professor Neil Netanel evaluated alternatives to the commercial, advertiser-based media model. (49) One alternative is the political party-financed media system, where political parties sponsor media outlets. (50) Now less common, this system was prominent during the early 1800s in the United States and following the Second World War in Europe. (51) The system provided a "more honest" perspective--ideological allegiances were clear, and the system encouraged more robust public involvement. (52) But this system often resulted in preferential treatment for media outfits aligned with the party in power and negative treatment for opposition outlets, diminishing their effectiveness as a counterweight and accountability mechanism, while propping up favorable media. (53) Thus, Netanel concluded that the party-financed media alone should not be viewed as a viable alternative to advertising-based news media. (54)
Netanel also considered a media system financed through government subsidy. (55) However, Netanel argued that there is considerable danger of government using subsidies to manipulate the press to suit its own ends, threatening the legitimacy of the press. (56) He further argued that publicly funded media outlets are also less apt to report on provocative matters or even adopt a stance on such matters. (57) These reasons make the government-supported media option, for Netanel, an equally untenable alternative to advertising-supported media. (58)
Regardless of these flaws, however, the two alternatives may help "supplement" the existing commercial system to make up for its shortcomings, according to Netanel. (59) However, they remain unsuitable as wholesale replacements for the commercial media, and thus, for the foreseeable future, we will continue to have a commercial media system. (60)
B. Privacy in Many Forms
"Privacy" has been valued since Eve noticed she was naked. But privacy may be in the news more than ever before. Whether the story is about paparazzi taking photos of celebrities, criminals stealing medical records from a government database, or (more often) Facebook, Google, or Apple changing their privacy policies, Americans constantly hear about threats to their privacy. (61) More recently, privacy has been in the news regarding mobile devices-either apps accessing users' phone books without notice, (62) government accessing location information without a warrant, (63) or private sharing of data for behavioral advertising. (64) But we should begin by specifying, to some extent, what scholars (and average citizens) mean when they talk about "privacy."
Law professor Daniel Solove's definition (or non-definition) of privacy strikes us as most persuasive. He calls privacy a "plurality of different things that do not share any one element but nevertheless bear a resemblance to one another," that "involves so many things that it is impossible to reduce them all to one simple idea." (65) Solove extensively cataloged the differing formulations of privacy, finding that most, if not all are too narrow or too broad and are inadequate for addressing substantive privacy matters. (66) Solove identifies another problem in our conception of privacy: decision-makers often fail to define the precise harms that privacy laws seek to remedy. (67) If one cannot properly understand the malady then one is unlikely to develop a cure.
Indeed, looking at some of the most prominent Supreme Court cases about "privacy" confirms his point. The Court has used privacy in a wide variety of contexts. The only two constants are that privacy is generally a positive attribute and that we sometimes must balance it with other positive attributes. (68)
Consider some varying examples of "privacy." Most famously, the Court has discussed "privacy" not in terms of informational privacy but in terms of intimacy, family, and certain fundamental individual choices. The essential cases here are Griswold v. Connecticut and Roe v. Wade, which provide constitutional protection for contraception (69) and abortion, (70) respectively. The Court has also discussed the importance of associational privacy. In the 1958 case NAACP v. Alabama ex rel. Patterson, the Supreme Court affirmed the value of privacy as it relates to freedom of association, holding that the Fourteenth Amendment's Due Process Clause protected NAACP membership information from compelled disclosure because of the members' rights "to pursue their lawful private interests privately and to associate freely with others in so doing." (71) The importance of associational privacy is perhaps one reason why Facebook's privacy policies generate so much attention--Facebook reveals our associations. (72)
Beyond intimate choices and associations, the Court has valued informational privacy, including privacy's role in both receiving information and in conveying it. In 1969, the Court held in Stanley v. Georgia that a Georgia statute prohibiting the possession of obscene material in the private residence violated the First Amendment. (73) The Court wrote:
Whatever may be the justifications for other statutes regulating obscenity, we do not think they reach into the privacy of one's own home. If the First Amendment means anything, it means that a State has no business telling a man, sitting alone in his own house, what books he may read or what films he may watch. (74)
Stanley is generally discussed as a "First Amendment" decision rather than a "Fourth Amendment" decision. (75) But the Fourth Amendment also provides protection from unreasonable government searches of our "papers." (76) Solove has argued that the Fourth Amendment's limitations reflect free-speech values. (77) In keeping with the right for Americans to read whatever they wish in their homes without the peering eye of a government agent, many have argued for extending the right to read "anonymously" online (from their home or elsewhere), (78) and find support from the controversies over the right to privacy in books checked out from libraries. (79) Others have made the argument for anonymous reading in the context of new(er) technologies like the Kindle and iPad, arguing that we should extend Stanley to cyberspace. (80)
These examples pertain to anonymous reading. The Court has also affirmed the importance of maintaining the privacy of one's identity in speaking and writing. In the 1995 case McIntyre v. Ohio Elections Commission, the Court struck down an Ohio law that forbade the distribution of anonymously written campaign literature. (81) Finding the law violated the First Amendment, the Court held that "an author's decision to remain anonymous, like other decisions concerning omissions or additions to the content of a publication, is an aspect of the freedom of speech protected by the First Amendment." (82)
Both Stanley and McIntyre suggest the importance in our democracy of being able to read and write anonymously, to listen and speak without being identified. (83) The exact reasons justifying these rights are somewhat more complex--they turn on the importance of anonymity to personhood and to democratic debate. (84) The unwavering gaze of government (or others in society) may chill the receipt or expression of unpopular, unconventional views, related both to personal decisions and political education and debate.
Evidence of these many privacy conceptions can also be seen by how American lawmakers have passed numerous statutes aimed at protecting and advancing individual privacy. (85) These policy efforts can be split into two general categories: first, protection from government surveillance, and second, protection of specific categories of information against even private sharing of the information. Regarding government, in addition to the limits of the Fourth Amendment, Congress enacted a set of rules that provide guidelines for law enforcement's collection of private information, including the Wiretap Act and later the Electronic Communications Privacy Act (ECPA), which accounted for changes in technology presented by computers and other devices. (86)
Congress has passed laws aimed at addressing how private entities must protect the privacy of information, though in doing so it adopted legislation in a variety of sectors rather than simply creating a universal privacy standard. These sectors include protecting government records of individuals, (87) health records, (88) financial information, (89) different types of business records, (90) school records and other education information, (91) and information collected from children's internet activities. (92)
While the Supreme Court has often affirmed the right to privacy, as with freedom of the press, the Court has also not hesitated to note potential tensions between privacy and other core values, balancing the two. In Planned Parenthood v. Casey, the Court balanced privacy interests of a woman's access to abortion services against the state's interest in the life of an unborn child. (93) In one section of Citizens United v. Federal Election Commission, the Court upheld disclosure rules, striking the balance between privacy interests of political donors and the public's "interest in knowing who is speaking about a candidate shortly before an election." (94) More recently in Sorrell v. IMS Health Inc., the Court struck a balance between the interest of doctors in the privacy of medical prescription information and the commercial speech rights of pharmaceutical companies to convey that information. (95) As a result, the Court has not only recognized that privacy is not an absolute, (96) it has addressed one of the many tensions between privacy and free speech. Some conceptions of privacy, after all, value the ability of one person to stop others from speaking certain things about them, providing a tension with speech.
III. Enter The Internet
Most observers seem to conclude that the internet has increased speech diversity while putting privacy at risk in different ways.
A. The Internet Disrupts Press, Increases Diversity
The internet dramatically transformed the conventional triad of media: print, television, and radio. These incumbent news mediums are bound by limitations of page space, broadcasting minutes, and channel capacity. (97) They are also constrained by enormous input costs required to print a daily paper or broadcast a nightly news program. (98) Since the advent of online news distribution, print news revenue has diminished, both because of decreased readership and less advertising revenue. (99) Print advertising revenue declined from $48.7 billion in 2000 to $22.8 billion in 2010--cut in half in one decade. (100) This tailspin forced many papers, including The Philadelphia Inquirer and Minneapolis Star Tribune, to declare bankruptcy because they could not afford to repay their loans. (101)
Web properties have seen explosive growth in the market. (102) Online news websites--whether affiliated with a traditional outlet or independent--do not have those aforementioned limitations. (103) They have essentially "newsprint" space and video capacity. (104) They also have much lower costs for distribution, even if they have some similar costs of newsgathering. (105) Such news sites have developed considerably in the web era. (106) Some technologies reduce these distribution costs even further, including free or low-cost publishing technology and online platforms. (107) Such platforms, like WordPress.com, Blogger, and Tumblr, have empowered millions of Americans to become individual publishing houses. (108) WordPress.com, for example, hosts websites for a number of major news organizations like CNN and NBC Sports in addition to over seventy million blogs. (109) These sites serve mainstream and niche audiences, and provide in-depth reporting, greater diversity of views, and promote broader civic engagement in debate through the ease of commenting, all at a much lower cost and quicker pace as compared to traditional news mediums. (110)
This technological sea change has had tangible effects on the consumption of news. In 2010, "more Americans were getting their news online than from traditional printed newspapers," and young people were using the internet more than both newspapers and television. (111) To use WordPress.com as an example again, sites on their platform have over 385 million people viewing more than 3.8 billion pages each month. (112) Thus, the internet has become a core component of our everyday interaction with news and commentary, and a major platform for news outlets from media giants to lone bloggers.
The diversity offered by these technologies served as a core impetus of the fight over network neutrality, rules which the FCC ordered into effect in December 2010Y3 The network neutrality rules require internet providers to treat all traffic traveling over their networks equally, and not discriminate against particular types or sources of traffic, except for limited purposes. (114) Part of the drive for these rules was Congress's recognition, in section 230 of the 1996 Communications Decency Act, of the internet's capacity to provide "a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." (115) The potential for internet providers to threaten this online environment, as demonstrated by Comcast's throttling of customers' peer-to-peer traffic in 2007, spurred the FCC to act to preserve the openness of the internet and thereby help to ensure online diversity. (116) The FCC is now defending the rules before the D.C. Circuit in a case brought by Verizon, who argues the FCC has no authority to enact the rules and says the rules will hurt the communications industry. (117) Nevertheless, network neutrality enjoys support from an array of groups, including Facebook and Yahoo!, the ACLU, the Christian Coalition for America, as well as the American Library Association, (118)