FTC Looks To Update Privacy, Ad Policies For Mobile, Social Era
To be honest, I question the effectiveness of the approach.
First, it fails to realise that people just don't read terms and conditions, statements or agreements. It does not matter how long they are, or whether they are drafted in plain English. Research shows only 7% of Britons read online terms and conditions. As I pointed out in a previous post, gamers have given away their souls, and 3,000 others missed the chance to get US$1,000 from an end user license agreement. Making them shorter will not make a difference. Just think about it, how many of us usually just scroll down to the bottom of the end user agreement, tick the check-box, and click "I agree" without reading the end user agreement. Will the majority of users read a plain English version (did you read Paypal's plain english agreement?) or a shorter version (Blogger's mobile app license agreement is quite short)? I have my doubts.
Second, not many people read nutrition guides either, and even if they read them, they don't read much of it. A study showed that only 26% of people say that they always look at nutrition labels. The study also showed that only 9% of a study group looked at the calorie count on a nutrition label, and only 1% looked at each of the other components. Clearly, the nutrition label is not a good analogy.
Third, when people want something, they will just get it, and terms and conditions don't really get in the way. It is not just small things (like online services or apps) but big ticket items as well (cars, houses, loans). Don't you remember Judge Richard Posner not reading the terms of his home equity loan. Sometimes, it is a function of there being no real choice. If you want the product or service, you have to agree to the terms. So, if you have no choice, you usually will not bother about reading.
My view on this is that it is partially self-correcting. Trust is something which is built up slowly through numerous good and trust engendering experiences. However, trust can be easily broken by one bad experience. Companies who are in the long haul of selling products and services (scammers and criminals are in a separate category by themselves) will soon find out that it is important to be very upfront (by whatever means) with their customers, and not to surprise them in a negative way. Think SceneTap where the CEO acknowledged that "unfortunately, I think I underestimated the controversial aspects of this technology and what the public’s reaction would be". It will take some time to build that trust again, but I am sure they have learnt the lesson.
Also, it would be more effective for customers to have the ability to customise their personal data sharing and interactions throughout the relationship with the company. I raised in a previous post the need for Android OS users to be able to change permission settings after installation of an app instead of the current situation where permission settings cannot be changed after installation. If regulation or jaw-boning is needed, then we need it there.
I have some further thoughts on how to improve transparency for consumers, and hopefully I will be able to share these with you in the near future.