In 1993, Peter Steiner published his famous New Yorker cartoon of two dogs chatting in front of a computer as one posted something to some pre-social networking chat room and said: "On the Internet, nobody knows you're a dog." Today, they know whether you're a big dog, or just a dog, or for that matter, your entire pedigree, and they are using it to determine what kinds of content and what kinds of offers to serve to you at what price.
In his new book, The Daily You, University of Pennsylvania Professor Joe Turow explains that: "Marketers are increasingly using databases to determine whether to consider particular Americans to be targets or waste.[...] The targets receive different messages and possibly discounts depending on those profiles." Here's a short interview with Professor Turow on NPR's Fresh Air.
In today's Wall Street Journal, reporter Dana Mattioli writes that "On Orbitz, Mac Users Steered to Pricier Hotels." From the story:
"The Orbitz effort, which is in its early stages, demonstrates how tracking people's online activities can use even seemingly innocuous information—in this case, the fact that customers are visiting Orbitz.com from a Mac—to start predicting their tastes and spending habits."
Orbitz is pushing back hard on the idea that it is using price discrimination techniques or "dynamic pricing" to steer Mac users to higher-priced hotels than Windows users are offered. It claims in this ABC News followup that:
"[T]he notion that the company would charge more for the same hotel based on a computer model is "nonsense." [...] "Just as Mac users are willing to pay more for higher-end computers, at Orbitz we've seen that Mac users are 40 percent more likely to book four- or five-star hotels ... compared to PC users, and that's just one of many factors that determine which hotels to recommend a given customer as part of our efforts to show customers the most relevant hotels possible."
In my view, Turow is right and the Orbitz flack is spinning. It's nonsense to think that companies are not trying to predict which consumers to charge more or offer different choices to. If companies are using profiles, secret databases and vast troves of information from numerous sources -- almost the least of which is your Mac or Windows IP address -- to make decisions about what products to offer you at what prices, then you should have more rights to know about, look at and control the sale and sharing of information and profiles that make you a "target or waste" or a big dog or just a dog. Some of those rights, including a full "do not track or collect my information" right (as opposed to a limted "do not target me" right), are discussed in this new FTC privacy report. As I explain in a recent blog, Jeff Chester of the Center for Digital Democracy and I will have more discussion of these issues in a forthcoming paper.