Retailers might soon have access to lot more consumer information that will enable them to dynamically price items and market to consumers based on the websites and apps consumers visit and where they connect online.
That’s because President Donald Trump is expected to sign a bill that passed in the House of Representatives on Tuesday and in the Senate last week that lets internet service providers (ISPs) sell consumers’ internet history and other sensitive information, such as their location, financial information, health information and the content of their online communications.
The legislation rolls back Federal Communications Commission (FCC) rules adopted in October that would have required ISPs to get consumers’ permission before sharing users’ sensitive data. Under the rules, ISPs would have been allowed to use and share non-sensitive information, such as a consumer’s email address, unless the customer opted out.
The legislation positions ISPs to become competitors to data brokers and ad networks.
The legislation positions ISPs to become competitors to data brokers and ad networks, says Susan Grant, director of consumer protection and privacy at the advocacy group Consumer Federation of America. “They will be offering services that are, in many ways, the same as other companies that collect, analyze and sell consumers’ data,” she says. But ISPs differ from those other services because they see “every move someone makes online, including the websites they visit, what we do there, the apps we use and the locations from which we connect.”
In providing retailers and other marketers access to this information, ISPs could make it easier for merchants to adjust product pricing based on a host of factors, such as whether a consumer has shopped around for an item or on his apparent income level, she says.
The information gathered from the searches consumers make online or the websites and apps consumers visit could also enable a drugstore retailer, for instance, to push over-the-counter drugs that might have questionable benefits or enable a landlord to determine if someone is a credit risk, says John Simpson, privacy director at the advocacy group Consumer Watchdog.
“The problem is that I don’t think people will know where the information is coming from,” he says.
Conversely, Emmett O’Keefe, the Data and Marketing Association’s senior vice president of advocacy, says the FCC’s rules would have “unnecessarily burden[ed] the booming digital economy.
“If these rules were to be enacted, they would disrupt the framework that has allowed the marketing ecosystem to responsibly use data to develop vital services that consumers now rely upon while also injecting dynamic innovation and growth into the U.S. economy,” he says. “This framework is backed up by strong industry self-regulation, enforced by DMA and other partners, and continues to protect consumer privacy.”
Read what the Data and Marketing Assocation says about the bill
In pushing for the bill in Congress, ISPs argued that internet marketing giants like Google and Facebook Inc. had an unfair business advantage in that they gather consumers’ data and enable retailers and other marketers to use that information to target consumers with ads.
But that argument “never held water,” says Fatemeh Khatibloo, Forrester Research Inc. principal analyst. “The ‘giants’ don’t’ really see the nitty-gritty of our web-browsing habits and they don’t have access to our physical location data so long as we turn off location tracking. Mobile providers will always know exactly where we are because they know the cell towers our devices are using.”
Overturning the FCC rules is a fundamental teardown of consumers’ rights and, frankly, a competitive marketplace.
Moreover, Google and Facebook offer free services while consumers pay ISPs and mobile carriers for their services, she says. “That makes us their customers, not just their users. And, in most cases, consumers already have very little choice in ISPs and mobile carriers. Overturning the FCC rules is a fundamental teardown of consumers’ rights and, frankly, a competitive marketplace,” Khatibloo says.
Internet Retailer reached out to dozens of retailers to inquire whether they plan to pay for access to ISPs’ data. Only The Home Depot Inc., No. 7 in the Internet Retailer 2016 Top 500 Guide, would comment: “We haven’t assessed it yet or determined what our customers would want, so we haven’t made any decisions,” says a Home Depot spokesman.Favorite