June 13, 2018, 8 p.m.
Online platforms like Facebook and Google have long dominated the business of packaging personal data for purchase by third-party advertisers. But after Tuesday’s court decision to green-light the massive merger between AT&T and Time Warner, a new type of corporate behemoth may be about to give Silicon Valley a run for its money.
The Cambridge Analytica scandal revealed how Facebook and its advertising partners track user posts to build a comprehensive portfolio of an individual’s beliefs and preferences. Now some experts expect the newly approved partnership between AT&T and Time Warner to result in a similar practice, with the merged company scraping up both network data and the types of shows and movies watched by their customers to create a sensitive—and highly valuable—consumer profile.
“There has been a lot of attention on what companies like Facebook and Google have done with data,” said Michael Carrier, a professor at Rutgers Law School specializing in technology and antitrust. “And now, to the extent that you have a new company that combines the distribution network of AT&T with the content of Time Warner, that gives all sorts of opportunities to get more information on consumers’ viewing habits and to harness that information for various purposes.”
More media mega-mergers are already looming in the wake of Tuesday’s ruling, with Comcast on Wednesday bidding $65 billion for assets held by 21st Century Fox. And as cable companies continue to acquire vast swathes of the media and entertainment complex, there’s an expectation that the combined firms will work to inaugurate a new era of corporate data-tracking.
“Certainly they do see the dollar signs that are right in front of them for monetizing this information,” Carrier said. “I would imagine they would be excited to tap this new potential source of money.”
By marrying AT&T’s extensive telecommunications infrastructure with the media content on offer from Time Warner, the new company will be able to piece together an even more complete picture of its customers’ lives than Google or Facebook, some experts believe.
“I think [internet service providers] have a greater reach, in the sense that they can connect all the dots of your internet usage,” said Ernesto Falcon, legislative counsel at the Electronic Frontier Foundation. “There are different levels of information both of them gather, and I tend to think with the acquisition of content, they’re able to be more like Google and Facebook in terms of a comprehensive activity list. But they also have the advantage of knowing where you go outside of their preferential product.”
AT&T was hardly shy about its intentions for user data before its merger with Time Warner was approved. At an investor conference last year, AT&T CFO John Stevens said that the “next key for the overall vision of the company is taking those network assets, taking that premium content, taking the scale and scope, and putting it together and then combining it with the real opportunity in advertising and data analytics.”
Marc Rotenberg, president of the Electronic Privacy Information Center, said the data-privacy concerns raised by the AT&T-Time Warner merger were largely ignored by the judge who approved the deal on Tuesday. “In the internet age, merger review should require consideration of the impact on user privacy,” Rotenberg told National Journal.
Rotenberg said federal laws on privacy have failed to keep up with the reams of sensitive information cable companies and internet service providers can collect on consumers, particularly as they continue to snap up content creators.
“The 1984 Cable Act does provide good privacy safeguards for interactive digital services,” he said. “The law could be updated by Congress to address concerns arising from the AT&T-Time Warner deal.”
This isn’t the first marriage between a cable company and a content creator approved by the federal government. The Obama administration approved the acquisition of NBC Universal by Comcast in 2011, and it’s worth asking why there’s little evidence so far indicating that Comcast has exploited its access to consumers’ media preferences.
“I think for the most part they’ve been restrained,” Falcon said, arguing that the Federal Communications Commission’s old net-neutrality order also required internet providers to adhere to tougher privacy standards. That order officially expired on Monday, which Falcon believes now gives internet providers “full range” to leverage their users’ data.
“I suspect that a lot of the business planning behind how to utilize consumer information in this way is underway,” he said.
But even if they do ramp up their data collection, neither AT&T-Time Warner nor any other cable-media conglomerate are required to repeat the same mistakes as Facebook. “I think Time Warner and AT&T have a lot more experience than Facebook with sensitive information,” said Roger Entner, the founder of Recon Analytics and a top telecommunications-industry analyst.
Unlike Facebook and its fellow Silicon Valley firms—which until recently were regarded highly by most Americans—AT&T and Time Warner have taken their lumps in the past from both government regulators and the public.
“A wireless carrier or a TV company have been much longer in the crosshairs of various political interests,” Entner said, adding that he thinks they’re less likely to do something as controversial as distributing sensitive customer data to a foreign political consultancy.
Joe Kennedy, a senior fellow at the Information Technology and Innovation Foundation, said both AT&T-Time Warner and similar future merged companies should look to Facebook’s ongoing plight as a cautionary tale.
“If they’re [giving advertisers] my name and all the programs I’ve watched, that I think most people would have a problem with,” Kennedy said. “But I don’t think they’re going to do that, precisely because a lot of people would view that as stepping over a line.”
Still, given a corporate imperative to maximize profits and the lack of rules or regulations constraining their behavior, others believe newly merged firms will likely exploit their customers’ data as thoroughly as possible—even at the risk of public backlash.
“Even if there’s anxiety, there’s still money to be made,” Carrier said. “So my sense is that will drive the analysis.”
