June 22, 2021

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What’s cooking with Gannett, Apollo and ConnectID; would Moran outlaw RTB? Section 230 ideas

What’s cooking with Gannett, Apollo and ConnectID; would Moran outlaw RTB? Section 230 ideas

What’s cooking with Gannett, Apollo and ConnectID; would Moran outlaw RTB? Section 230 ideas

Privacy Beat

Your weekly privacy news update.

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Apollo acquisition of Verizon’s Yahoo/AOL — and its creditor relationship with Gannett — prompted speculation about changes in ad-tech identity alliances

The race to see what will emerge as a standard for managing web identity and privacy for advertisers and publishers took a major twist this week.

The twist arose as Verizon Media, the publishing and ad-tech arm of the giant wireless and landline telco, was sold for $5 billion to private-equity firm Apollo Global Management Inc.  Apollo will call its new business Yahoo, and it will include AOL, TechCrunch — and, significantly, something called “ConnectID” with 900 million “consumer relationships.”  Apollo also has investments in Career Builder.

ConnectID’s a system for gathering, encrypting and sharing identifiers for individuals so that they can be found across the web and ads targeted to them.  It is used by partner ad-tech companies such as CafeMedia which explains its use.

Here’s why the ownership changes turns out to be intriguing: Apollo’s Apollo Capital Management L.P. is the biggest creditor ($1.0 billion at about 7.1% interest) and also a stockholder of cash-conserving Gannett Co. Inc. Gannett is by far the nation’s largest print newspaper publisher, with 261 dailies in 46 states and Guam and 125 million monthly “unique [digital] users.” What if Gannett’s print-and-digital users were combined with Verizon content sites?

Last week, DigiDay’s Max Willens quoted a Gannett executive as saying the company was looking at both ConnectID and another service to be fielded by the Locall Media Consortium called “NewsPassID”.   LMC is a buyer consortium of most U.S. newspaper publishers and Gannett is by far its biggest member participant.  So the question on the table: Will Gannett choose to use an identify service owned by its largest creditor, or a service embraced by most of the rest of the U.S. legacy news industry? Or, as Willens’ headline put it in his DigiDay followup this week, Could Apollo deal for Verizon-Yahoo elevate ConnectID’s role in ad tech?

It may not matter. For one thing, there are dozens of other alliances and efforts within the digital-advertising industry to try and address privacy concerns about targeted advertising as well as the loss of the third-party cookie as a technical resource. One of them is Unified ID 2.0, engineered by ad-tech company The Trade Desk Inc. but ostensibly turned over to industry consortiums PreBid.org, Inc., and PRAM, to run.  Google is working on other alternatives, and it is not clear which other browser makers such as Apple, Mozilla and Microsoft, will support new identity-sharing collaboratorations. So far, Google says it won’t, generally.

Under Verizon’s ownership, Verizon Media was ultimately not always able to access for ad-targeting the profiles of Verizon mobile-phone users as a matter of corporate policy.  It was tarnished by a U.S. Federal Trade Commission (FTC) inquiry into use of mobile-phone identifiers without end-user explicit permission.  Verizon the telco is retaining a 10% equity stake in the “new” Yahoo. Will Yahoo be seen as a trustworthy originator of ConnectID by web browser makers and privacy advocates?

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Would GOP senator’s privacy bill outlaw “real-time bidding”?  Check the language

Congress continues to struggle to create a passable federal privacy act, and now there are plans for roundtable discussion-type hearings to seek consensus (link above).

The GOP has generally adopted an advertising and tech industry line in the sand — only the U.S Federal Trade Commission  (FTC) or state attorneys general can sue to enforce data privacy (not individual citizens), and all state laws in the digital privacy area should be preempted.

In a new wrinkle, three provisions of the “Consumer Data Privacy and Security Act,” as introduced this week by U.S. Sen. Jerry Moran, R-Kan., would appear to put the advertising-technology practice of “real time bidding” (RTB) in legal jeopardy without extensive opts-in by consumers to many parties. Moran’s website includes links to a bill overview, a section-by-section analysis and full text.

The three provisions appear to suggest that only the website or network placing the ads can acquire or use personal data without the user’s knowledge.  Others in the RTB chain would have to either obtain their own permission. Or the first party — with whom they have a contract — would have to have disclosed and obtained consent for their involvement.

  • First, the bill appears to require that a consumer “opt-in” to the collection of personal data for purposes other than for internal operations to complete a transaction the user has initiated — such as buying something online, billing, shipping, diagnostics, accounting or network management.

  • Second, consent for such internal operational or short-term transient purposes otherwise not requiring explicit consent cannot apply to third-party data users, and cannot be “used to build a persistent profile of the individual.”

  • Finally,  “operational purposes” not requiring user permission does not apply to personal data collected for advertising or marketing purposes unless it is collected “directly” by a first party or a third-party that has a contract with the first party.

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Specific ideas about Section 230 and “middleware” to curate content floated by ex-WSJ pub and detailed ‘Wired’ article

Specific ideas about language change to Section 230 and “middleware” to curate content floated by ex-WSJ publisher and by a detailed Wired article.

A reader will recall that Section 230 is the part of the Communications Decency Act of 1996 which has shielded tech platforms, including ISPs and blogs, from legal liability if they post potentially defamatory materials.  Presidents Biden and Trump both called for its repeal during the 2020 campaign — and their partisans have continued.

There appeared in the last week or so two thoughtful takes on the debate.

The first is an insightful piece posted at Politico.com and written by a former Wall Street Journal publisher, L. Gordon Crovitz. He helped start a business called NewsGuard, which uses human editors to assess the editorial integrity and trustworthiness of sources appearing on Google News, on Facebook, Bing.com and elsewhere.

In his piece, Crovitz proposes the term “middleware” to describe his company’s work, which is funded by user subscriptions and by license fees which have been paid by Microsoft, and others (maybe including Google at one point).  He says changes in Section 230 could somehow create incentives for Facebook, Twitter, YouTube and others to feature and encourage their users to rely upon such “middleware” content curators to “verify the importance and accuracy of all kinds of information presented on social media and by search engines . . . . “

Crovitz has no specific suggestions for Section 230 language tweaks.  But a comprehensive, magazine-length look at the legal provenance of Section 230 at Wired.com by staff writer Gilad Edelman does.  In his piece, “Everything You’ve Heard About Section 230 is Wrong,” Edelman seems to favor a suggestion by legal scholar Danielle Citron, which would make Section 230 legal immunity contingent on a platform “taking reasonable steps to address unlawful uses of its service that clearly create serious harm to others.”

Edelman does a thorough job of reporting objections to this and other change-230 ideas but the overall drift at start and finish of his piece is this:  Why can a traditional publisher be sued for printing defamatory material it didn’t write (but did print) but Facebook can’t be sued for posting defamatory material it didn’t write (but did post)? “A lot of the wildest conspiracy theories that infect American politics are straightforwardly defamatory,” says Edelman, and the status quote is allowing various forms of discrimination, stalking and harassment to persist online.

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Twitter poised to experiment with network news subscription; Colorado melds ownership forms and ‘paywalls’ should be ‘hard’

Three developments this week point to continued experimentation in efforts to fund journalism on the web. First:

Look to Twitter in a few months to offer more publishers the chance to test charging for content, but will the offer to similar to Scroll’s, which signed up users, charged the $5 a month and then divided the money among participating publishers in some way.  Could Twitter experiment as well with having the underlying publisher bill their users as an add-on to existing local subscriptions? Or exchange fixed prices for stories? Twitter has 200 million user accouts — more than any one traditional publisher — but the don’t pay for anything.

In a second development, a consortium of mostly public and nonprofit media organizations in Colorado, lead by the Colorado Sun, has partnered with the new National Trust for Local News to purchase 24 weekly print papers from their retiring co-publisher couple and will run them as a B-corp. The question: How will this meld with what has been a mostly digital experiment?

Finally, one of the domination tech companies that provides online  “paywall” services to publishers released research it said shows that getting subscribers is easier if you don’t give people any free content first.  That runs contrary to two decades in which news publishers assumed it would be easier to sell online advertising than to get people to pay for content.

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First-party relationships and cohorts — why publishers can succeed in new privacy world

“With Google sunsetting the lifeblood of digital marketing — third-party cookies — and no longer supporting identifiers in the bidstream in its own ecosystem, advertisers face a fragmented market to find solutions to their targeting woes. Yet this same change puts publishers in a unique position to create value for brands. Instead of seeing data leak out of their organizations – essentially allowing their valued readers and viewers to be tracked around other sites – publishers will become walled gardens with highly defined audiences available for advertisers to target. This approach protects user privacy. Any business that ignores privacy will not be sustainable . . .

“The best way for publishers and marketers to future-proof their businesses is to establish deep, direct relationships, as they both have access to consented first-party data on their audiences and consumers. Using this data, marketers will be able to plan and reach their audiences via publisher cohorts without relying on a cross-domain identifier.

“Google’s Federated Learning of Cohorts (FLoC) replicates the cross-domain tracking that happens today — and decouples publisher data from inventory — whereas publisher cohorts don’t aggregate data across domains. In addition, publishers can place users in more than one cohort, unlike FLoC. Because of the understanding of their audiences, publishers can provide a more descriptive representation of the user.

“Publishers will be the only part of the ecosystem to own identity. They will be the only ones who can create cohorts across all platforms and buying tools. Once regulation kicks in, this advantage will be further cemented. Therefore, working directly with publishers will be the only clean, safe and compliant route for advertisers to use their first-party data . . . .

“Publishers are becoming guardians of data on the open web. In this new ecosystem, the balance of power will be fairer. Publishers will not be expected to allow valuable user data to leak. Ad tech companies will assume a supporting role, allowing a more direct relationship between buyers and sellers to flourish.”

ABOUT PRIVACY BEAT

Privacy Beat is a weekly email update from the Information Trust Exchange Governing Association in service to its mission. Links and brief reports are compiled, summarized or analyzed by Bill Densmore and Eva Tucker.  Submit links and ideas for coverage to newsletter@itega.org.

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