Microsoft and Google say they want privacy regulation for Internet advertisers

The official story is that Microsoft and Google both genuflected to government regulators today testifying that they want laws to protect the privacy of Web users from Internet advertisers. Yes, taken on face value, this means that Microsoft is asking for government regulation in its hot up-and-coming online ad business. The unofficial story, according to some blog posts, is what they really want is for the government to regulate the other guys.

Specifically, at a Senate Commerce Committee hearing on online advertising, representatives of Microsoft and Google each said that meaningful privacy rules should be created. Consumers should be clearly notified about what data is being gathered, they should be given options as to how that information is being used and something should be done to secure the data, so hackers can't swipe an advertising company's database and have an identity theft field day, reports the AP.

The Commerce Committee meetings were designed to address mounting concerns over the data stores of ad companies, used to send targeted ads to visitors. But underneath the statements by the largest online ad company and its major rival is more market posturing. According to Stephanie Clifford's Bits blog in the New York Times, next week, Microsoft’s general counsel, Brad Smith, will be testifying at the hearing into he Google-Yahoo ad sharing deal. Clifford talked to the Microsoft rep who spoke at today's hearing, Mike Hintze, the associate general counsel for Microsoft, about what Smith will say next week. The message will be that when there's one big player then privacy becomes scary because that player has a bigger picture of people's online activity.

This would apply to Google of course, particularly if aligned with Yahoo, but what would Microsoft be saying if/when regulators are investigating an acquisition of Yahoo by Microsoft? Unlike Google, Microsoft also makes the browser that supplies most of the information about Web surfing to the advertising agency. The list of ways and means that Web sites and advertisers collect data from the browser has grown substantially over the years and is already beyond the control of what any average consumer could restrict. (Take a look.) Meaningful privacy protection would also need to snip this trend in the bud.

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