The "Security" Part

When reading the Majority and Minority Staff Report from the Permanent Subcommittee on Investigations ("The Subcommittee") regarding the "Hidden Hazards to Consumer Security and Data Privacy" was published yesterday, I was immediately struck by several thoughts, which I am pretty sure were the direct opposite of what the Subcommittee intended to convey. In no particular order:

  • There are very real security risks to end-users online, most of which have to do with websites, but that third party advertising is NOT a material virus or malware risk (the overwhelming, vast majority of security risks on the web arise from insecure coding on websites themselves, outright malicious websites, and malicious email and phishing scams—not ad exchanges and ad networks).
  • It was difficult, and perhaps impossible, for the Subcommittee to find any more than two or three examples of malware delivered through advertising that occurred in the past 2 years—which is really astounding given the thousands of entities that operate in this space and the billions of ads served.  Three of the six examples they gave were 4 years old or older.
  • There is more than a little irony at play since one of the reasons browser software vulnerabilities go unfixed is because the NSA refuses to disclose zero-day vulnerabilities so that it is able to—you guessed it—exploit browser software.
  • That what the Subcommittee was actually concerned about was privacy: the collection and sharing of information by third parties in the advertising arena, including but not limited to data brokers.

The Privacy Part

Although the Subcommittee's discussion of security concerns in advertising was full of sound and fury and signified really nothing, the detailed description of the advertising ecosystem, with its networks, exchanges, on-demand platforms, and data brokers, was more lucid, and was clearly based on considerable background work and research.  

The real upshot—or perhaps shot across the bow—from the Report is the following:

  • The Subcommittee is gunning for website operators that rely heavily on third party advertising, as well as the advertising ecosystem itself. 
  • There is a perceived inverse relationship between the number of third party server calls/network connections that are triggered when visiting a website and the quantum of privacy enjoyed by the end-user.
  • Congress is itching to change or augment the existing self-regulatory structure for advertising.
  • The concerns over personal data matching by third parties and data brokers is growing more, not less intense over time.
  • Legislation and/or regulation on data collection, advertising, and data broker issues, although not specifically called for by the Subcommittee, is clearly what they want

The bottom line is that the current online advertising model is under attack and going to see increasing scrutiny from Congress, regulators, and the media for the foreseeable future.