February 23, 2010

As I suggested last year, good product reviewers go beyond tabulating features to teach consumers how to reach a sound judgment. In that respect, David Pogue missed an opportunity in his covering Google Buzz (*). While he correctly identified privacy, or the lack thereof, as a significant feature of Buzz, he colored his analysis by playfully warning "privacy fanatic[s]" and "the paranoia-inclined" to avoid the new service.

Consider what difference it would have made if David Pogue had given consumers a more thoughful explanation of what privacy entails. Especially since he made sure his readers understood that, by nature, Google Buzz is a "recommendation system [which] sort[s] through the tidal wave of conversation by automatically promoting or hiding messages according to what it thinks [...] useful".

As being the universal recommender is the core of Google's diabolo strategy, David Pogue had its dilemma nailed down pat when he warned Buzz ignores consumers' real priorities. The more useful Google is to become, the more it needs to put "its paws on [...] the world's personal information".

Why not playfully suggest Google lets each user customize its Buzz recommendations and shares the resulting order with his or her correspondents? Today my true love dropped my Buzz rank from 1st to 3rd. Did her boss and her credit card company blackmailed their way to the top of her list?

Seriously though, if data rights are based on reason rather than psychosis, what do I stand for? How about No Exploitation without Representation?

Take the dispute between Apple and newspapers and magazines apropos the iPad. According to Kenneth Li, "ownership of subscriber information and pricing have emerged as key issues" (**). "Apple's policy would separate [the publishers] from their most valuable asset", i.e. consumer data. Am I paranoid if I suddenly feel like a helpless XVIIIth century Pole waiting for Austria, Prussia and Russia to decide who would rule over me (1)?

My suppliers are definitely entitled to be paid for their services. But isn't it a bit much they come to consider the personal data entrusted to them during such transactions as their own asset? Perhaps my individual stake is so small, I should not care. But evidently companies find it worth a fight when considering the aggregate of what ought to be ours to control. Isn't the right to vote at the origin of the American and French democracies?

I am wont to compare today's companies to the lords of the Middle Ages. For major corporations, the XVIIIth century may well provide a better model. Compared to earlier and later times, civilian populations caught in the wars among European powers suffered more from wholesale alienation than from bodily violence. Besides, hasn't Steve Jobs the flair it took to rule the court at Versailles? Plus Vodafone would make a credible Prussia.

Andrew Parker and Paul Taylor let "Vittorio Colao, Vodafone chief executive" speak for himself (***). First he urges action against "Google's dominance of the internet search advertising market". A bit belatedly, but true nonetheless. More boldly though, Mr Colao managed to speak at the same time for and against "Net Neutrality". For, when he wants access to the networks of Telefonica and Deutsche Telekom, and against, when he wants to limit access by content owners to his own network. Frederic II would recognize a brother in Mr Colao, logic impaired for reason of state.

In a world of selfish economic agents, money and power are the accepted currencies. No wonder then that, together with consumer data, pricing comes to be the second issue between Apple and the publishers. Doesn't pricing combine both power and money?

Brad Stone put his finger on the pulse when he asked "where's the price?" (****). It appears that, wary of the Internet's tendency to relentlessly drive down prices, major brands and manufacturers - and now book publishers - are [...] [trying] to control how their products are presented and priced online". One method, legal in the United States, is to force the electronic retailer to hide the price until the customer gets to the cash register.

Removing price labels obviously makes it difficult for comparison engines to work, a rather extreme case of obfuscation, a topic well studied by Glenn and Sarah Fisher Ellison. The next step of course is to customize the price according to the consumer's profile, à la Alaska Airlines.

Now I would be the last one to criticize a trend away from price markets to value markets, where price is but one negotiable factor among many. For a good example, turn to the London real estate high end market so well described by "The Secret Agent" (*****). While price still matters there, no transaction will occur unless "it ticks so many of the boxes that people wish for".

The Secret Agent goes on to describe the "two quite different methodologies" which come into play. "Searching" allows one "to be active, to forage and seek out". He calls the other "selling". I would rather say "waiting on alert". Even though this happens to be the general practice, why indeed restrict to sellers the art of letting be known one is on the lookout for Opportunity to come knocking? He should rebrand himself as a Search Agent.

Being active, searching seeks choice and wants to compare. Leaving high end markets where agents are still human, matching technologies do exist to automate both searching and waiting on alert, letting sellers to hide and customize their prices, yet enabling buyers to make comparisons (2).

But how can one negotiate on such a market if a party has all the information, if for instance the seller hides the price till the last minute but knows all about the buyer's profile in advance? Fairness demands privacy.

To the consumer, which of Apple or the New York Times ends up the winner is important. More relevant still the fact recommendations by Google are two-sided. While it helps us to search and compare if possible, it also rents out our profile to those on the alert for our purchases.

What does David Pogue think of those whose recommendations are paid by the manufacturers of the recommended products? Beneath contempt! But what about a product recommender who betrays the confidence of those who follow its recommendations by selling their personal information to the highest bidder? Didn't Dante destine them for the very bottom of his Hell? Yet by keeping its advertising engine from public scrutiny while giving short shrift to consumer privacy concerns, Google has set itself free to do evil at will.

Personalized advertising is the future. But let us not blindly entrust our privacy to King Google. No exploitation without representation (3)!

Philippe Coueignoux

• (*) .......... Buzzing, Tweeting And Carping, by David Pogue (New York Times) - February 18, 2010
• (**) ........ Publishers warn of hurdles to iPad deal, by Kenneth Li (Financial Times) - February 6, 2010
• (***) ..... Google ascendancy vexes Vodafone, by Andrew Parker and Paul Taylor (Financial Times) - February 16, 2010
• (****) ... The Fight Over Who Can Determine Prices at the Online Mall, by Brad Stone (New York Times) - February 8, 2010
• (*****) . The pleasure principle, by The Secret Agent (Financial Times) - February 13, 2010
• (1) see the Partitions of Poland in the wikipedia
• (2) see the tEC Fair Play matching service proposed by ePrio
• (3) see Comments relative to the FTC November '07 Workshop on Ehavioral Advertising: Tracking, Targeting, Technology, November 2007