IP: Self-Indulgence in the Internet Industry

[Dave Farber <farber () cis upenn edu>]

[ This will most likely get me screams from the NYT but I do consider it 
fair use  and important that IP readers get to read this one. I know the 
players in both groups and I believe  that the PFIR believes they can be 
grassroots and talk for those folks. The challenge I see is to avoid it 
being co-opted by one of a set of existing players who would like to also 
claim they represent the grass roots. If PFIR can stand above the mob and 
remain pure it can do good. Past history of the net suggests that they will 
have to be very careful and very suspicious. I do wish them luck and the 
best. Dave]

November 22, 1999

DIGITAL COMMERCE

Self-Indulgence in the Internet Industry

By DENISE CARUSO

Finally, the Internet's growing lack of credibility among consumers 
is  becoming a cause célèbre.

Just last week, two organizations -- one grass-roots, the other 
representing industry -- announced their intentions to bring some balance
and intellectual rigor to a debate that has been almost completely lopsided
toward unfettered growth at any cost.

One of the groups, People for Internet Responsibility
(<http://www.pfir.org/), is a global, nonpartisan resource network. It says
its mission is to make the voice of consumers and citizens heard at a level
equal to that of the corporations and governments that have vested
interests in how the Internet is run.

The second, an industry organization called the Internet Policy Institute
(<http://www.internetpolicyinst.org/), says it wants to provide an antidote
to the "noise, hype, rumors, marketing, IPOs and the hopes of starry-eyed
start-ups" on the Internet by providing the first independent, objective
analysis and research about the global network's development and use.

Granted, several of the institute's backers have made billions in that
starry-eyed Internet economy, which raises the specter of a fox with a
mouthful of feathers guarding the henhouse. Nevertheless, it contends that
it will not lobby "or otherwise actively advocate or represent the
interests" of Internet companies.

As it should be, of course. But then, I'm not objective about the subject.
Aside from writing this column, I have also been on the public-speaking
circuit for nearly five years, keening about the sorry state of credibility
online and championing a code of conduct for publishing.

And after having spent much of the last year doing research and
interviewing Internet companies about disclosure and credibility practices,
I wonder how much change any industry-based organization can effect without
real, outside pressure from either consumers or the law.

Based on conversations with nearly 40 Internet publishers, vendors and
researchers, it seems that the revenue-starved Internet economy is far more
willing to risk consumer wrath and rejection than to voluntarily adopt a
meaningful code of conduct or to reveal too much about how it conducts its
business.

Although the initial focus was online journalism -- "Freedom of the press
belongs to those who own one," said A.J. Liebling, and pretty much anyone
with a computer and an Internet account fits that bill -- it became clear
almost immediately that any standards code would have to extend more
broadly. Portals, search engines, commerce sites, independent artists,
universities and researchers had all become "publishers."

And while most journalists understand that with publishing comes
accountability, the "accountability" quotient was almost completely absent
on the Web at large, in almost every area, from consumer privacy to
customer service to disclosure of conflicts of interest.

Unlike print and broadcast media, for example, most Web sites feel no
particular need to distinguish between what information is paid for by
sponsors and what is not. In fact, next to labeled advertising, the sale or
barter of a hypertext link on a Web page is probably the most fundamental
value exchange for those conducting business on the Internet.

When a commercial link is in or near a news story, credibility advocates --
rightly aghast -- call the practice "transaction journalism." But the
concept might better be called transaction publishing, because it applies
virtually across the Web.

Transaction publishing is neither fundamentally good nor evil. In fact, the
ability to directly link pieces of information, whether transactions or
content, is the defining feature of the Web. But precisely because the link
is so powerful a metaphor, it is particularly incumbent upon online
publishers to give users full disclosure -- as much context as possible to
judge the substance, value and credibility of the links they explore.

This seems self-evident. Yet almost nowhere on the Web can users easily
find even the most basic contextual information, like a company's physical
location or telephone number. Or who or what company owns and runs the Web
site. Or what business(es) it is in and how it makes money -- a fact that
is not always obvious for Internet businesses like portals, which derive
revenue every which way they can.

Most commercial sites offer news and a search engine, but often do not
provide the source of the news -- nor do they volunteer whether specific
key words or links are sold and, if so, to whom. And despite widespread
privacy concerns, they are rarely upfront about what personal information
they collect and what they do with it.

It is evident from consumers' concerned reactions to paid product
endorsements on Amazon.com and DrKoop.com and to the more recent revelation
that RealNetworks was secretly vacuuming up users' personal data without
permission, that this wholesale disregard for the truth is generating
confusion and alarm.

But amazingly, the specter of the online marketplace collapsing as
consumers sprint for the doors is not a sufficient impetus for companies to
clean up their acts.

"There is an ideal confusion in the mind of the consumer today," said the
chief executive of one Internet company, who was granted anonymity -- as
were all the interview subjects -- in exchange for candor. "It's good if
the consumer doesn't know whether he's buying the watch from Casio's site
or from us."

Then there was the marketing executive who spoke of a project in which a
prominent business publication worked closely with marketing executives for
his client, a big technology vendor, to design a Web page. The idea was to
make the links, which led directly to the advertiser's site, exactly match
the magazine's editorial style.

"I was horrified," he said. "No one seemed to understand that once a
consumer clicked on that link and found out that it took them directly to
an ad, their credibility was shot and they'd never get it back."

The many interview subjects who did support strong disclosure standards for
the Internet tended to be lawyers, researchers and others who were
concerned with long-term effects on the credibility of the Internet as a
medium.

The rest are apparently banking on the "ride this horse till it drops"
strategy. And considering the amount of activity that their bad behavior is
generating, they may not have long to wait. The burning question is, What
is going to bring them down? And who will they take with them?


Copyright 1999 The New York Times Company