Ryan Calo Talks about Digital Market Manipulation

By TAP Staff Blogger

Posted on October 9, 2013


What are the concerns of companies having access to more personal data about their customers? Businesses with knowledge of what interests their consumers allow them to offer ads for items of most relevance to people. Most of us have become accustom to targeted ads that follow us around the web, linked to our browsing history. Is this something to be concerned about? If Lands End knows I live in the Pacific Northwest, have children, and like the color red, it could be quite convenient come September to be shown their sale on children’s fire-engine red slickers and rain boots while I’m reading my favorite online parent magazine. Isn’t this helpful rather than harmful?

Law professor Ryan Calo explores the potential damages of digital-ad targeting in his recently released paper called, “Digital Market Manipulation (forthcoming from George Washington Law Review).” Professor Calo argues it is the convergence of systematization and personalization, enabled by the scale of digital technology, that makes us exceptionally vulnerable.

Professor Calo was interviewed recently on KUOW’s “The Record.” He was asked to explain why people should care if companies use data for advertising. Below are a few excerpts.

I’m seeing some trends that are moving away from just using personal data to deliver you something that you want; to make sure that the ad that you see online, for instance, matches your interests. I’m seeing the possibility going forward of using data about you to really persuade you in a unique way or maybe even use that data in a way that disadvantages you.

The harm is really a privacy harm. The idea is that you would shed information about yourself online for a variety of purposes and not realize that one of the purposes that it might be used would be to disadvantage you say, as against price. In other words, here you are browsing on the Internet with a particular browser or a particular laptop, and it turns out that maybe you see a higher price or a different deal or because you’re using a Mac or you’re using Firefox. And you didn’t anticipate that that would be a repercussion. The consumer of the future, I’m worried, will always have to be on guard against a company – not all companies – but unscrupulous companies taking advantage of them.

Why do companies closely study consumers? Part of the reason is they do it is because they want to improve their services and they want to make sure you’re having a delightful experience. I wouldn’t minimize that. I think that’s a wonderful use. But sometimes they like to try to figure out exactly how long they should make those obnoxious commercials before a movie that you paid for. And maybe they’ll experiment on consumers in order to figure out what the maximum amount of time will be before people complain. It’s that kind of study and experimentation that I’m bothered by.

I want to make sure that the incentives of large corporations, with lots of data about us, are aligned with our own incentives.

Listen to the full podcast: Why Should We Care if Companies Use Data for Advertising?

Professor Calo’s work on examining digital market manipulation has been written about recently in The Atlantic (“What Does It Really Matter If Companies Are Tracking Us Online?”), GeekWire (“When Companies Know Too Much: UW Researcher Explains Digital Market Manipulation”), and the MIT Sloan Management Review (“Is Digital Advertising a New Form of Market Manipulation?”).

Ryan Calo is Assistant Professor of Law with the University of Washington School of Law, and the co-founder of the Tech Policy Lab. He specializes in the areas of cyberlaw and robotics.