What Price Privacy? By Al Sikes

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It was the beginning, 1994. I was in Dallas for a meeting of magazine editors and publishers and met with Jim Clark who was raising capital for a company called Netscape.

Clark had recruited the technology group headed by Marc Andreessen at the University of Illinois. Andreessen and colleagues had invented the first web browser, and Clark was eager to have “content companies” publish on what was then referred to as the World Wide Web.

My job as President of New Media for the Hearst Corporation aligned with what Clark was doing. I was working on digital expressions of what Hearst did so well in the traditional media world.

Hearst invested in Netscape, achieved a very high return on that investment and became a leading “traditional media” company offering digital content.

Netscape had a short-lived run before being bought by AOL. Netscape depended on users purchasing the right to use its browser. Microsoft launched its own browser and, feeling threatened by Netscape, gave it away. Free won, Microsoft blew up Netscape’s business model.

1994 foretold the future of the Internet. In one sense, the unfolding realities in 1994 paralleled George Orwell’s novel 1984. But the developments of 1994 pointed to dominance by a business oligarchy, while Orwell pointed toward an all-pervasive controlling government.

In 1994 newspapers and magazines sold ink on paper for dollars. Today, Facebook and Google sell information, entertainment and social connection for personal information that they convert to targeted advertising inventory.

If I were to write a book, looking back, the title might well be The Seduction of Free. Free search, social connectivity, customer reviews, shipping.

The founders of Google, Facebook, and Amazon, saw the future and with copious amounts of capital delivered it. Each did what it did very well. Now the seduction is over and the morning after is not without regrets.

Rather than speculate about or repeat the lessons of others, my source will be me. One slice of life we all share is health concerns. I have researched cataracts, lower back pain, knee replacement and orthotics over the last few years. Google has a more complete profile of my health concerns than my doctors.

In this Faustian bargain, Google and its peer companies deliver. To use a marketing term: we find ourselves in a sticky relationship. Businesses love sticky relationships–repeat customers are the best. How many of you are leaving your Facebook friends?

Pre-1994 I was in the regulation business (so to speak) as Chairman of the Federal Communications Commission. This experience compels me to be wary about regulating Google, Facebook, and Amazon. On the other hand, we should understand what is being asked of us and how the information is used. And we should not be deceived or beaten down by pages of small font legalese.

Each company has brilliant designers of customer user interfaces. Put them to work on an interface that reveals the offer to us and presents options. The number of words used should not exceed one hundred and must be in at least 14 point type.

Also, each company has brilliant chief financial officers. Put them to work on assessing the market value of their unfettered use of our information. Convert this market value into an offer that allows each prospective user to make a choice. The choice: what price privacy—information or dollars.

And finally, the Congress should in one hundred words or less tell the two antitrust agencies that they would like to see a proposal to update our unfair competition laws. Facebook, Amazon, and Google (now Alphabet) began when venture capital was flowing, raising money in public markets was relatively easy and when the steady erosion of privacy was opaque. Scale and network effects now enjoyed by the big three give them an almost unassailable dominance. Dominance inevitably leads to excess.

Al Sikes is the former Chair of the Federal Communications Commission under George H.W. Bush. Al recently published Culture Leads Leaders Follow published by Koehler Books. 

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