Privacy, Selfishness, and the Internet Commons: Time to Stop Opting Out

Robert D. Atkinson December 6, 2021
December 6, 2021

In his 1991 classic book The Rise of Selfishness in America, James Lincoln Collier wrote that America had evolved into a society focused almost exclusively on rights and not responsibilities, noting: “the right of everybody and anybody to take whatever they can get without any responsibility for putting something back in the pot.” 

This malady has only worsened in the last 30 years, and we see it playing out in the debate over Internet privacy. Everyone wants free Internet applications, but no one wants to contribute their data to make them work. Only suckers opt in to allow their data to be collected, they say. Or companies trick people into it. Either way, it’s bad, the thinking goes: People should defend their privacy rights against craven corporate interests. And they shouldn’t have to pay for things they now enjoying for free, even if they withhold their data.

That is both supremely selfish and bizarrely paranoid: First, if we want the free Internet to survive so that anyone who gets online, no matter their income, has access to information, news, and communication tools unimaginable a few decades ago, then Americans need to stop thinking only of what they perceive to be their self-interests and start taking responsibility for our common interests. If we all opt out of data collection and clamor for laws limiting the data companies can collect and use, then the free, ad-supported Internet ecosystem—including free online courses, free games, free software, free communications, and so much more—will atrophy and many of those things will no longer be free. 

Second, what exactly is the harm in allowing companies to tailor ad experiences toward users who are most likely to be interested in them instead of bombarding their entire audience with come-ons for products most of them won’t care about? Well-tailored ads provide greater value for everyone: Consumers are more likely to find things they want, advertisers generate more sales from their marketing dollar, and the whole economy benefits. Fearmongers will argue the ads aren’t the problem; it’s whatever else companies may do with your data. But most companies do not share personal data with advertisers; they use algorithms to serve ads to the type of people advertisers are trying to reach. Besides, we can pass a national privacy law that does not mandate opt-in or contain other onerous provisions that would torpedo the entire ad-based Internet economy.

Make no mistake: Free Internet services, whether from big global tech giants or little mom-and-pop app developers, depend on advertising revenue to stay in business, and that advertising revenue in turn depends on personalizing ads. To understand the economy-wide benefits that personalized ads provide versus random, scatter-shot ads, consider that The Wall Street Journal reported one small company that sells loose-leaf tea used to pay $27 in advertising to acquire a new customer, but now, with a large share of users not opting to allow their data to be collected, it pays as much as 10 times that amount, because its ads are no longer targeted to people who are likely to buy tea. 

And governments are making this even worse. Europe’s sweeping privacy law, the General Data Protection Regulation (GDPR), requires consumers to opt into data collection. Many lawmakers in Congress want a national privacy bill to include a similar opt-in provision. Echoing the same sentiment, Federal Trade Commission Chair Lina Khan recently wrote that there is, “a growing recognition that the ‘notice-and-consent’ framework has serious shortcomings further highlights the need for us to consider a new paradigm, which could be implemented through privacy legislation from Congress.” She went on to propose “substantive limits” on data collection and limitations on “behavioral advertising.” 

But the prevailing view that the only losers in a new opt-in system would be large, profitable Internet companies is wrong. The damage would be widespread, particularly for the small businesses that would have to pay more for ads. Many will simply switch channels—using email, direct mail, or other means, which will raise their costs—or they will cut back on advertising, which will lower their sales. Either way, in a world without targeted ads, they will generate less revenue. The same will be true on the other side of the advertising equation: Hundreds of thousands of companies now providing free services and applications on the Internet through ad-supported business models will generate less ad revenue and thus either spend less on improving their products, start inundating users with annoying popup ads that are less relevant, or begin to charge for their services. This might be an okay outcome for middle- and upper-middle-class Americans who would be willing to pay for video-chat services or online games, but for most Americans it would represent an economic hardship.

Of course, rights-focused Internet advocates deny this. They say, wrongly, that we can have our cake and eat it too: Just pass a law, as Europe did, that forces companies to provide the same services to everyone, regardless of whether they opt in or out of data collection. But ultimately if selfishness prevails over a spirit of Internet citizenship, we will either have lower-quality services or everyone will be forced to pay. 

Harry Truman once stated, “Selfishness and greed, individual or national, cause most of our troubles.” He was right then and is right now. Unless Internet policy balances self-interest with collective responsibility—and recognizes that elevating privacy rights above all else undermines people’s individual and collective economic interests—the Internet ecosystem will be worse all around.

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Privacy, Selfishness, and the Internet Commons: Time to Stop Opting Out