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In a huge victory for privacy advocates, the Federal Communications Commission (FCC) ruled that broadband-internet providers such as AT&T and Comcast will no longer be able to collect and distribute customer data without getting their consent.
The new sanctions, which were first introduced in March, require fixed- and mobile-broadband providers to obtain permission from subscribers to use data related to their web browsing history, app usage, geolocation information and financial information, among others.
As of now, these firms can track user behavior and personal information unless consumers actively opt out. The rules are set to go into effect by the end of next year, and will apply only to broadband providers and telco carries.
Unsurprisingly, the cable industry voiced concern, largely because it gives digital companies such as Google and Facebook, who are not subject to the limitations, an unfair advantage. Both Google and Facebook collect vast amounts of consumer data, which they use to distribute and sell to brands and marketers. Since Google and Facebook are governed by the Federal Trade Commission (FTC) and not the FCC, they are exempt from the new rules.
The FCC's decision could have major implications for AT&T’s pending takeover of Time Warner. AT&T recently agreed to purchase Time Warner for $85.4 billion with the intention of obtaining and merging its troves of consumer data – such as browsing history, viewing behavior, and app usage – with Time Warner’s media properties such as HBO, Turner, and Warner Bros.
This would enable AT&T to boost its audience-targeting capabilities while reaching customers across screens. The new rule could not only make it harder for the two companies to merge their data, but also any consumer data they obtain in the future.
At first glance, it seems clear that the new rules would benefit consumers worried about their online privacy, but could actually have a reserve effect. Indeed, among US consumers, 45% stated that they are more worried about their online privacy than one year ago, according to a survey conducted by the National Cyber Security Alliance. However, the rule could also negatively impact consumers.
Instead of being fed individualized content and product recommendations based on browsing history, users could now be overwhelmed with the same ad volume, but with less relevant content, thus further increasing their frustration and negative sentiment around advertising.
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