Privacy Advisor

Cookies' Days Are Numbered, but Not Without a Fight

October 22, 2013

By David Tashroudian

The cookies days are numbered, but it is not going down without a fight. Last week, a federal court in Delaware dismissed an action alleging untoward cookie practices by Google and its advertising partners. Although the court’s order is a reprieve for third-party cookies, their extinction remains inevitable.

But much of the Internet advertising ecosystem relies on cookie-based behavioral targeting, so what’s next? Speculation about Google and Microsoft creating their own ID protocol has surfaced recently; Apple already has its own in the mobile space. These ID protocols will replace cookies and eliminate some attendant privacy concerns by concentrating data collection with a few large companies. They also create other unique challenges to information privacy.

Google Defeats Suit Alleging Surreptitious Placement of Cookies

According to the complaint filed against Google in In re: Google, Inc. Cookie Placement Consumer Privacy Litigation, Google allowed advertisers to place third-party cookies on a user’s computer by circumventing Apple’s Safari browser’s default blocker and by deceiving Microsoft’s Internet Explorer. In addition, the complaint avers Google transmitted personally identifiable information to third-party advertisers in connection with targeted ad delivery. Plaintiffs alleged such practices caused injury and violated various state and federal statutes.

The court was unconvinced. As a threshold matter, the court found the plaintiffs lacked Article III standing to assert their claims. Despite the plaintiffs putting forth evidence that personally identifiable information has value, the plaintiffs could not allege Google’s actions diminished the monetary value of the information. In other words, there was no injury.

Injury aside, the plaintiffs could not seek relief under the statutes. Notably, the court found the personally identifiable information at issue was not subject to the Wiretap Act or, by extension, the California Invasion of Privacy Act.

The decision highlights the controversy surrounding cookie use. As users and browsers shun cookies, advertisers develop innovative and borderline deceitful ways to place their cookies without detection. Deception undermines public confidence and incites calls for reform. Prospective replacements for cookies, however, aim to consolidate information with a few big players, leaving consumers with new threats to their privacy.

Google, Microsoft and Apple Create Proprietary ID Tracking Systems

Google and Microsoft are ready to develop their own tracking system to replace cookies. Recent news suggests that Google and Microsoft are developing a proprietary advertisement ID protocol that would assign users a unique and persistent identifier. Apple is already there.

In September, USA Today reported on Google AdID. Google AdID is a tracking technology aimed at replacing cookies and would perform the same persistent tracking function as cookies but would concentrate data collection with Google.

Under the current regime, a user’s browser could have numerous third-party cookies it shares information with. The flow of information to so many different companies exposes user privacy to multiple individual risks. AdID seeks to be eliminate that risk by being the only point of collection. The theory goes that information will be more secure because there are fewer controllers. Similarly, concentrating information with Google as the controller increases efficiencies because the company can link browsing information with a specific Google account to provide incredibly relevant advertisement.

A few weeks after the news about AdID surfaced, AdvertisingAge reported that Microsoft was similarly developing a cookie replacement technology. Microsoft’s technology leverages the company’s desktop, mobile and in-home presence to gather information over several platforms. The company will undoubtedly incorporate its technology into the soon-to-be released Xbox One gaming console to track TV usage. And if users employ the extensive media center technology built into the console, like watching live TV and streaming Netflix and Hulu, Microsoft will have unprecedented access to TV viewing habits, which will allow the company to dominate that advertising arena.

Microsoft and Google are following in the footsteps of Apple, which has already created a persistent identifier that functions much like the dying cookie. With the release of its mobile operating system iOS6, Apple introduced IdentifierForAdvertising (IDFA). The IDFA protocol is the point-of-collection for personally-identifiable information on iOS6 and iOS7 devices and is used to track a user across mobile apps. Ostensibly, user information is more secure because it is concentrated with Apple instead of being dispersed among multiple applications that collect such data.

Dangers of Concentrating Personally Identifiable Information

Concentrating the collection of personally identifiable information in the hands of a few is dangerous. First and foremost, despite Google, Microsoft and Apple being Internet juggernauts, they are not Fort Knox. Meaning that however unlikely it is for the information held by these companies to be compromised, the threat is there. And if all user information is stored with a few companies, the bigger target those companies become for sophisticated hackers.

Another concern involves the amount of control over personal information consumers are willing to acquiesce to Microsoft, Google and Apple. Given the recent revelation that tech companies have been providing the NSA with hoards of consumer data, consumers should be hesitant to trust anyone.

Finally, allowing only a handful of companies to collect information effectively destroys competition. Competition drives change. Consumers who were unhappy about the information-collection practices of advertisers using third-party cookies expressed their dismay and the market provided a replacement. If, however, there is no space for a competing product because a few firms enjoy the entirety of the market share, there will be no innovation. So if these new technologies fail to address the shortfall of cookies in full and instead are riddled with their own problems, there will be no catalyst for change and consumers will suffer as a result.

Conclusion

Cookies will go extinct, and something else will take the technology’s place. What that technology will specifically look like is not clear. What is clear is that the replacement will likely concentrate huge amounts of data with a few controllers and be able to track a user across platforms—including desktop, mobile and in the home. The benefits of this new technology though may not outweigh the risks.

David Tashroudian is an attorney in Los Angeles, CA, practicing intellectual property litigation and privacy counseling.