By now everyone is probably aware of the “tracking” of certain cellphones (Sprint, iPhone, T-Mobile, AT&T perhaps others) by a company called Carrier IQ. There are lots of discussions available; a good summary is on one of my favorite websites, Lifehacker; also here from CNET. Apparently the program gathers lots of anonymous data mainly for the purpose of helping carriers improve their service. Nonetheless, there are lawsuits and calls for the FTC to investigate.
Aside from the fact that the data is used only to improve service, it is also useful to ask just what people are afraid of. Clearly the phone companies already have access to SMS messages if they want it since these go through the phone system anyway. Moreover, of course, no person would see the data even if it were somehow collected. The fear is perhaps that “… marketers can use that data to sell you more stuff or send targeted ads…” (from the Lifehacker site) but even if so, so what? If apps are using data to try to sell you stuff that they think that you want, what is the harm? If you do want it, then the app has done you a service. If you don’t want it, then you don’t buy it. Ads tailored to your behavior are likely to be more useful than ads randomly assigned.
The Lifehacker story does use phrases like “freak people out” and “scary” and “creepy.” But except for the possibility of being sold stuff, the story never explains what is harmful about the behavior. As I have said before, I think the basic problem is that people cannot understand the notion that something is known but no person knows it. If some server somewhere knows where your phone has been, so what?
The end result of this episode will probably be somewhat worse phone service.
(Cross posted from the Truth on the Market blog)
Paul Rubin is senior fellow at the Technology Policy Institute. Dr. Rubin has written or edited seven books, and published over one hundred articles and chapters on economics, law, and regulation in journals including the American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics, the Journal of Legal Studies, the Journal of Law and Economics, and the Yale Journal on Regulation. He has contributed to the Wall Street Journal, the New York Times and other newspapers and magazines.
Dr. Rubin is also Dobbs Professor of Economics and Law at Emory University in Atlanta and editor in chief of Managerial and Decision Economics. He previously served as senior staff economist at President Reagan's Council of Economic Advisers, chief economist at the U.S. Consumer Product Safety Commission, director of advertising economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin is a graduate of the University of Cincinnati and holds a PhD from Purdue University.
