Steve spoke with the BBC on privacy as it is seen from the US.

http://news.bbc.co.uk/2/hi/programmes/click_online/9718866.stm

In order to get what they want, they need people to be afraid, but gulf between their Chicken-Little claims and the actual experiences of most Internet users grows wider by the day.

Their latest effort to salvage their ever-diminishing credibility comes in response to a seemingly innocuous Consumer Reports survey on the Facebook habits of American consumers.

While the survey contains some methodological problems and vague, leading questions, its general findings were pretty straightforward. The main takeaway seems to be that Americans use social networking tools to share information with one another.

If anything, the survey findings are mostly of the “water is wet” variety, but in the hands of professional privacy scolds like Jeff Chester and James Steyer, they become evidence of a vast, evil conspiracy that must be stopped. In an article about the findings on the Consumer Reports website Chester and Steyer turn the rhetoric dial to 11 in hopes of transforming a ho-hum poll into a smoking gun.

What’s interesting is the increasing level of cognitive dissonance between what these privacy zealots say, and what Internet users actually experience.

What’s interesting is the increasing level of cognitive dissonance between what these privacy zealots say, and what Internet users actually experience.

Hundreds of millions of people vote with their feet every day by sharing information on Facebook and thousands of other different online forums.  People like the personalized and context-sensitive information and services that the Internet provides, and by and large have not experienced the host of holy horrors that Internet privacy extremists have been fortelling for over a decade.

Chester, Steyer and other professional privacy zealots would have you believe that those people are just too ignorant to understand what information sharing means.  But I am willing to bet that the average Facebook user is far savvier than those hand-wringing nannies would ever give them credit for.

Frank Herbert, the author of the seminal sci-fi masterpiece Dune once said: “the people I distrust most are those who want to improve our lives but have only one course of action.”

For the privacy zealots, that course of action couldn’t be clearer: scare people enough and maybe you can finally get the government to impose the direct control over the Internet you’ve always wanted.

The bad news for them – and the good news for the Internet – is that people don’t scare quite so easily.

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Committee Chair Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) did a good job of highlighting the insane complexity and uncertainty of current state and federal tax systems.  And Sen. Hatch also quoted a favorite slogan of his, reminding tax reformers to follow the Hippocratic principle, “First, do no harm”.

Internet sales tax proponents have plenty of their own slogans, too, as in “Fairness!” and “Level the Playing Field!”   But their solutions would harm millions of businesses who are using the internet to reach customers around the country, as they struggle to compete with the big-box chains that dominate local retail.  So much for the “fairness” slogan coming from billion-dollar retailers like Walmart and Target.

The Senators also pointed out the duty of Congress to require simple national frameworks for state taxes — before Congress sweeps aside judicial and constitutional restraints on states’ power to export their tax burdens.  Amen to that.

Streamlined Sales Tax Project has become just a slogan, not the simplified standard its backers claim.

But as I said in a statement for today’s hearing, state tax collectors have for a decade been struggling to deliver on their promise of a simple online tax regime.  Thing is, their Streamlined Sales Tax Project has become just a slogan, not the simplified standard its backers claim.

The truth is that potential state revenues and benefits for small retailers are grossly overstated. According to a study by economists Robert Litan and Jeffrey Eisenach, uncollected sales tax on e-commerce in 2012 is only 1/3 of one percent of total state and local tax revenue. (link to study)

With new internet taxes representing such a small impact on the very real revenue shortfalls facing states, one would think that advocates on both sides would see that it’s more important to get this issue right for generations of future online sellers and consumers, than it is to rush through a flawed solution rooted in a false sense of urgency.

But that may be too logical for Washington.

Internet tax proponents can see the finish line, and they’re not about to slow down for such trivial matters as fairness and effectiveness. And that’s a shame, because this is not an insoluble problem.

We had the opportunity to submit testimony for today’s hearing, where we propose a set of straightforward “simplification requirements” that would reduce the significant collection burdens that the current proposals pose to Internet sellers, and create something approaching a fair playing field.

Some of these requirements are slam-dunk simple, like requiring each state to have a single rate for remote sales, a single sourcing rule, and a single audit for all states.  Other requirements, like vendor compensation and legal means to challenge states that stray from simplification standards, may take a little more thought. Taken together however, these proposals lay out a roadmap for real simplification that protects online sellers, and the future of e-commerce.

For a Congress in search of serious solutions to lots of serious problems, we hope this can become a real start.

Sure, there were risks to with my decision – whining kids, car trouble, aggressive drivers – but it was worth it.

As I was relaxing after the drive I opened Facebook – an app I decided to put on my tablet – and was surprised to see an article recommended by WSJ Social, an app that I also chose to download from the Wall Street Journal.

The Journal article tells me what happens if I install an app and agree to give it access to the info it requests:  (ready?)  The app can then access that info about me and my Facebook friends.

Just like my car trip today, I have some concern about apps knowing my age, location, education, and interests.    For starters, these apps will be able to tailor ads to my interests.  They might also know the types of things I like to do on Facebook and about the friends I’ve selected there.   Even the Journal acknowledges how obvious this should be:

It is no surprise, of course, that Facebook can gain deep knowledge of people’s lives. It is, after all, a social network where users voluntarily share their names, closest friendships, snapshots, sexual preferences (“interested in men,” “interested in women”), schools attended and countless other details, including moment-to-moment thoughts in the form of “status updates.”

I think it’s that aspect of personal choice that the Wall Street Journal article seems to gloss over.

I knew all these things because Facebook virtually beats me over the head with choices and reminders to update my privacy settings to manage what and with whom I am sharing.  Sure, they want me to share, but Facebook also lets me decide how I share, and lets me change my mind anytime about apps on my page.

I think it’s that aspect of personal choice that the Wall Street Journal article seems to gloss over, even though they acknowledge it here:

Facebook is considered to have one of the most advanced privacy models for its apps because it lists nearly every type of data sought—and provides users with the ability to reject apps’ requests for some types of data.

The Journal article reminded me of another recent report that promised fire but delivered only smoke.  Last August, Ireland’s Data Protection Commissioner made headlines by airing a laundry list of potential Facebook privacy violations, including the creation of “shadow profiles” and the collection of info about non-Facebook users.

But when Ireland’s commission released its findings months later, it declared, “the audit has found a positive approach and commitment on the part of Facebook Ireland to respecting the privacy rights of its users.”

In other words, the facts did not match-up with the headlines.  I expect we’ll see the same in Saturday morning’s Wall Street Journal.

After all, a story not worth running on Friday is probably not worth reading on Saturday.

The Colorado Use Tax Reporting Regime was enacted in February 2010 and promptly earned a top spot on the iAWFUL list.  The bill would have required state retailers to mail both consumers and tax enforcers a list of online purchases made in the calendar year.

Beyond the onerous and expensive compliance costs associated with this bill, the creep factor was shockingly high.  Even without considering the eventual mail mix-ups where Mr. Smith was sent Mrs. Doe’s online shopping list – and other personally identifiable information – the idea of government officials caring for a growing mountain of personal and potentially embarrassing information was a bridge too far for the judges.

We couldn’t agree more and are happy to see Colorado’s tax experiment sent back to the wilderness where it belongs.

Related articles

• Colorado Reporting Law on iAWFUL (netchoice.org)
• Colorado Judge Rules Against Online Sales Tax (denver.cbslocal.com)

For example, we asked the EU representatives if they would respect the outcome of our multi-stakeholder process.  Jacob Kohnstamm of the Dutch Data Protection Authority said that even if the stakeholders agreed that the default for interest-based advertising is opt-out, the EU would not accept it.  And Paul Nemitz of the European Commission would dismiss those results since a multi-stakeholder process is not necessarily a product of the people.

Even if the stakeholders agreed that the default for interest-based advertising is opt-out, the EU would not accept it.

This reaction was especially surprising given the US administration’s recent strides to appease EU privacy zealots by creating a Consumer Privacy Bill of Rights and a multi-stakeholder approach to implement it.

Such a result is especially disconcerting given that the EU has seen a 65% drop in the effectiveness of online advertising.

It’s fine to fence in countries that don’t innovate and create at the rate or with the skill of the US.  But we should not allow the EU to create these artificial trade barriers.

Rather than waiting for the EU privacy zealots to come for our businesses and their $680 billion in revenue, we should take up the recommendations of Department of Commerce General Counsel, Cameron Kerry, and realize that the US and EU may not agree on privacy.

Related articles

• Privacy Regulators: US and EU Will Take Different Approaches (pcworld.com)
• The Data Commissioner Who Cried Wolf (netchoice.org)

But all this partying has got some neighbors on the block grumbling.  Traditional businesses that are comfortable with byzantine laws that protect the status quo are increasingly flexing their muscle to keep new entrants out of the market.

Our March 2012 iAWFUL list finds that, instead of encouraging innovation, many market incumbents are using legacy laws created before the Internet’s arrival to slow down and eliminate innovation and competition.  This practice is the top threat to online commerce this year.

Start-ups like Uber, Airbnb, and TrueCar  – websites that connect consumers directly to service providers — are  being stymied by long-standing taxi commission rules, hotel regulations, and dealer franchise laws.

The good news is that in many cases  laws don’t need to be changed to protect innovative business models and online consumers. NetChoice is urging local, state, and federal regulators just to send a clear message that these laws should not be misused to block consumer-empowering Internet tools.

Coming in at number two on this year’s iAWFUL list is an effort being pursued in Congress and in a handful of state legislatures, to impose heavy-handed rules on Internet and mobile applications that use geo-location technology. The law would require users to click through a pop-up every time they used a location-enabled app – even if the app in question is specifically advertised as a location tool (such as Foursquare).

Even more disturbing are state proposals to outlaw the practice of granting adults special offers, benefits or coupons for providing their location to apps. While getting the privacy question right is beneficial for both developers and consumers, the precedent of state legislators specifically mandating feature sets for new online products is a chilling thought.

Rounding out the “top” three on the list is the ongoing federal effort to force online retailers to collect sales taxes for nearly 10,000 jurisdictions, regardless of whether they have physical presence in a state. Despite pleas from small businesses, which stand to lose the most from these efforts, the bills in the House and Senate provide little meaningful relief for small sellers. To make things even more awful, these new federal laws would give rule-making powers to a cartel of unelected tax administrators.

Rather than try to work with small e-commerce sellers, the advocates of so-called “streamlined” sales tax — backed by big box retail chains – are pushing for the most aggressive (and regressive) version of the bill.

From legacy laws threatening innovative products to legislators trying their own hand at app development, the 2012 iAWFUL list outlines a hefty work list for the year ahead.

The entire iAWFUL list is here.  It details all the ways that varied interests are trying to shut down the online party.  NetChoice will do its part to keep the music cranked up.

Speaking at today’s opening ceremony, Costa Rican President Laura Chinchilla described how, back in 1948, her country became the first to willingly go without any kind of armed forces for national defense. In that respect, Costa Rica is a lot like ICANN: alone in a hostile world with only its constituents and allies for protection.

Costa Rica has proven that this nonviolent approach can work, but only if you keep your own house in order. If ICANN takes nothing else away from this week’s meeting, we can at least hope it takes a page from its host nation’s playbook.

Everyone here at ICANN 43 has heard the mounting calls by governments and the United Nations to assert more power over the Internet, and by extension, ICANN itself.

Since ICANN doesn’t have a standing army (or maybe THAT’S what all the new gTLD fees are for?) to repel these challenges to its authority, it needs to be creative about protecting itself from growing threats.

Part of ICANN’s defensive strategy seems to have been “the best defense is a good offense.” Its aggressive new gTLD program promises to dramatically increase the global reach of the Internet, thereby growing the community of stakeholders committed to the ICANN model.

ICANN has never been more in the public eye, and that increased scrutiny means increased pressure to get things right.

It’s a bold strategy that carries some big risks. Even as ICANN increases its global footprint with new gTLDs, it increases its exposure to external threats. ICANN has never been more in the public eye, and that increased scrutiny means increased pressure to get things right.

ICANN’s growing global audience now expects the organization to meet the promises made for its ambitious TLD expansion plan. And a powerful army of detractors is poised to pounce on the slightest slip as evidence of ICANN’s inadequacy.

Meanwhile, governments that have always been uneasy about ICANN’s bottom-up, multi-stakeholder model are anxious about fraud, abuse, and challenges to law enforcement that could be exacerbated in new gTLDs. Still, many of the issues important to governments remain unresolved.

It’s against that backdrop that I’ve been thinking about the U.S. Commerce Department’s declaration that ICANN isn’t quite ready for a renewal of the Internet Assigned Numbers Authority (IANA) contract. Maybe Commerce was showing its “tough love” for ICANN, signaling the need for more safeguards against controversial new TLDs that could alienate the governments now defending ICANN.

ICANN can either heed that message, or else start assembling that army…

Originally posted in CircleID

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Talk about raining on the parade!

We get that Senator Levin has a thing against corporations getting favorable treatment under the tax laws. Unless of course the tax benefits specifically help his state’s ailing auto industry.

In that case, Senator Levin says special tax treatment is…just…fine.

Today’s speech was a platform for the Senator’s legislation that would forbid companies from booking the cost of employee stock grants differently than the cost they deduct for income tax purposes following an IPO.

It’s sad to see our Senate making it a priority to maximize the government’s take from one of the only functioning economic engines left in the country.  Never mind that Facebook owner-employees – and the myriad spin-off ventures spawned by this 8 year old enterprise – are set to drop billions of dollars into federal and state tax coffers.

There is no doubt that our tax system is confusing and contorted, but this practice of picking winners in one industry and choosing losers in another is exactly what got us into this mess.  Instead of piecemeal changes that target the golden goose, Senator Levin should focus on fundamental tax reform that will benefit all businesses.

Most everyone hefted their shiny new rights, agreed they were nice, and talked about the need for swift adoption.  But when the party was done, everyone filed out, turning a blind eye to the post-party cleanup and a sink full of dirty dishes.

In this case, the dirty dishes aren’t baked-on casserole pans.  What’s left in the sink is the messy “multi-stakeholder” process that will decide the details about how to implement and enforce these new privacy rights.

We enjoyed the party, too.  And we can get behind the Administration’s goals to give consumers more transparency, control, and confidence about how their online data is used and secured.  All these ideas are good ways to foster consumer trust while also allowing for companies to deliver new, free services that are paid for with relevant online ads.

It’s also good to see the Administration’s emphasis on self-regulation and compliance.  We need to remember, however, that data we’re talking about is not sensitive information like medical or financial records, but marketing data that have been collected by offline businesses for decades.

For example, if you buy camping gear, you probably receive camping catalogues.  If you’re expecting a baby you can anticipate free trial offers to Parenting magazine.  Keeping the subject matter of these privacy rights in mind is critically important as we move forward.

Now, back to those dirty dishes in the sink.

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