Columnist Wesley Young covers a growing storm of events that are likely to culminate in substantial regulatory change and analyzes the impact that can have on the local search industry.

Most marketing professionals don’t give much thought to the regulatory climate. In the US, unlike Europe, privacy laws are largely industry-specific and targeted toward healthcare and financial services. Thus, marketers have largely been able to rely on lawyers to provide privacy disclosures and then go on to business as usual.

Yet there are a number of indications that a tipping point may be near, giving way to new regulations that demand significant changes in business practice. These changes can have a disproportionate impact on small and medium-sized local businesses. And varying standards across state lines means that companies with local operations in different states may have to make multiple adjustments.

Below, I take a look at the current environment and indicators that major changes are due in 2018. Then I cover seven ways changing privacy laws will impact the local search market.

Deregulation on federal level driving changes on state level

With all the news on Net Neutrality last month, you may have forgotten that earlier this year, Republicans killed federal privacy rules adopted by the FCC that would have required your Internet Service Provider to obtain permission before collecting and selling certain types of personal data (such as web browsing and app usage data). While the general perception is that such deregulation means fewer privacy laws, the practical impact may be more regulation.

Following the repeal of the FCC privacy rules, at least 21 states and the District of Columbia filed state versions of the FCC privacy rules as a direct response. Two states passed those bills into law, while others deferred the issue to 2018 or passed bills to study the issue further. And even though bills in a number of states died at the end of their 2017 legislative sessions, it is likely that many will reintroduce those in 2018.

The broader application is that deregulation on the federal level is causing states to take more action, which causes a number of problems. While state versions may all address the same topic, they are not identical. They are similar but contain differences unique to each state, such as different notice requirements, disclosures, consent or use requirements and enforcement mechanisms. Even using similar but different terms to describe the same principle creates problems regarding uniformity.

Lack of uniformity amongst states means more complexity. And more complexity results in greater uncertainty, risk, and cost.

The state reaction to the repeal of FCC privacy rules is just one example of how federal deregulation trickling down to state levels can create major headaches for business.

The mother of all data breach cases: Equifax

Major data breaches almost seem to be yesterday’s headline with the prevalence of the problem. Yet the Equifax data breach may finally push us over the edge in demands for regulatory action. Let’s review how bad the Equifax case was and still is:

  • Data thieves stole private information on over 145 million Americans from Equifax.
  • Data stolen was the most sensitive kind: personal and permanent information including names, addresses, social security numbers, dates of birth and drivers’ license numbers.
  • Equifax discovered the breach on July 29, 2017, yet didn’t announce the breach until September 2017.
  • Equifax executives sold millions of dollars of stock days after the breach was discovered and before the public announcement.
  • Equifax claimed that top executives of a company whose business is a protection of personal data didn’t know about the breach.
  • Equifax was notified in March 2017 by the Department of Homeland Security that there was a critical vulnerability in its software.
  • Equifax relied on a single employee to alert the company (he didn’t) to the risk of a data breach affecting 50 percent of all Americans.
  • Equifax sent customers needing more information about the breach to a fake phishing site.
  • That fake site clearly disclosed it was a fake in its headline and contained a tongue-firmly-in-cheek link to Rick Astley’s “Never Gonna Give You Up” music video.
  • Equifax is profiting from its screw-up: Concerned consumers are purchasing third-party credit monitoring services that frequently utilize Equifax services. So money spent due to Equifax’s problem is paid back to Equifax.

Yes, all of the above really happened. It seems it can only be a matter of time before cases like this force legislators on both sides of the aisle to take regulatory action tightening privacy and data protection laws.

Categorizing personal information to include marketing info

But it’s not just highly sensitive personal information that lawmakers are seeking to protect. While protection against breaches that cause economic harm or risk serious personal threats such as identity theft is justified, proposals are reaching beyond financial and health data.

States have introduced legislation that imposes reporting and notice requirements upon a data breach of personal information. But broad definitions of “personal data” have included what is typically considered to be marketing data, including search history and location information.

The argument against the broad regulation of consumer data is that there are different risks and expectations of privacy for credit card numbers compared to shopping history for a phone case or search history for coffee shops.

Yet broad regulation impacting all such information has been pushed through by state legislators, sometimes only being stopped by a governor’s veto.

Location data is being targeted

Location data that so many local search marketers rely on for targeted campaigns have, in turn, become a favorite target for privacy activists. The recent legislation specifically calls out geolocation information derived from mobile devices as requiring express consent before it may be collected, used or disclosed.

Several states introduced similar legislation in 2017 requiring affirmative express consent after clear and prominent disclosure as follows:

  • Notice that the geolocation information will be collected, used or disclosed.
  • Information about the specific purposes for which such information will be collected, used or disclosed.
  • Provision of links to access other disclosure information.

Failure to comply is deemed to be a violation of and subject to enforcement provisions of the state consumer protection laws. It is likely that some states will reintroduce bills that were vetoed or that died in committee, while others have carried the bill over to 2018.

Europe is redefining consent

Europe has already passed sweeping privacy regulation, titled GDPR (General Data Protection Regulation), which takes effect in May 2018. For example, the personal data subject to protection is defined as “any information relating to an identified or identifiable natural person.” That’s as broad as it gets.

The GDPR also makes major changes to rules surrounding transparency and consent before personal data can be used. Consent will be an especially complex issue for businesses to figure out, as conditions for obtaining consent are much tighter. Issues will include the form of consent, the specificity of consent and what downstream matters that consent applies to.

Some of the restrictions include prohibitions on making services contingent upon consent and on obtaining consent for multiple purposes. Consent must also be separately given, as opposed to being one clause in a lengthy terms and conditions agreement. Further, the ability to revoke that consent must be as easy to do as it was to give it.

The impact on local search

The above are all factors that seem to be culminating toward significant movement and changes in privacy regulation that will have a dramatic impact in the marketplace. Below are seven ways in which privacy will become a disruption to the local search and marketing industry:

1. The cost of marketing data will rise

Increased privacy regulation means all businesses will have to spend more resources to comply. It also raises the exposure to liability and increases the risk of public enforcement and of private lawsuits. Potentially, there could also be a decrease in the supply of marketing data if consumers respond to the notice requirements and consent requests by not giving permission to collect or use their profile information.  All of these changes would make collecting, acquiring, using or buying marketing data more expensive.

2. Targeted marketing becomes harder

If the supply of marketing data is throttled, accuracy declines. For example, if fewer people share their location, getting a sufficient volume of leads from targeted marketing will require casting a broader net.

The effectiveness of targeted marketing is further hurt by the ability to determine those target audiences. Less data regarding behaviors that predict specific purchase or online actions makes forecasting less accurate. Attribution would likewise be harder to pinpoint.

3. The competitive edge shifts back to larger companies

I’ve written recently about how having the right data is the new competitive edge over traditional economies of scale. Good data means that smaller businesses can more equally compete against larger companies.

But tougher privacy laws benefit larger businesses that have resources to adjust to mandated changes. Also, they will have better access to data as it becomes more expensive and potentially less available.

4. Google and Apple will become even more powerful

Google and Apple have great leverage over user privacy choices via their mobile operating systems. They embed many functions and apps that have a huge user base and that are critical to local search into those systems such as maps, media, and search engines. Consumers frequently treat these apps and functions as essential services and defer to Google or Apple terms for access and use.

Android and iOS also serve as a gateway to third-party apps and control how users grant app permissions or consent to the collection and use for data such as location.

5. Brands who control first-party data will hold premium ad inventory

Brands have direct contact with consumers and sufficient reach such that they are able to offer advertising solutions to third parties, especially those related to the brand’s product or service.

For example, Honeywell offers a software upgrade for its WiFi thermostats that will optimize thermostat settings. The offer to help save its customers $71 to $117 a year off of their energy bills means many opt-in. Users get customized reports with insights into energy use, comparison to similar homes and tips to help track and improve energy efficiency. Those “tips” will likely include some referrals to vendors such as insulation companies, solar energy vendors, and HVAC contractors or other marketing offers.

Brands are well-positioned to reach their customers within the confines of privacy regulations, and targeted audiences they can reach should demand premium ad spend.

6. The GDPR bleed-over effect

The GDPR will affect local businesses and marketers even if they don’t have European customers. Larger companies that already have to deal with tighter European regulation may find it difficult to segment different policies for American and European customers. As a result, they may adopt uniform privacy policies companywide.

Local businesses that rely on third-party data or do business using services of those global companies may be forced to follow stringent privacy policies as conditions of terms of use. And as discussed above, that could involve some major changes to business operations.

7. Regulatory hurdles used as a competitive barrier to entry

The other potential consequence of larger companies voluntarily adopting stricter privacy policies is that they would be less resistant to privacy regulations that mirror those internal policies. In other words, they may not oppose the legislation, or even publicly support legislation, undercutting the position of those who are against it.

Some may even push for those regulations knowing that it may give them an advantage over competitors who haven’t adopted such privacy policies. Regulation that raises the cost of doing business or requires some catch-up changes may serve as a barrier to entry for new startups or others seeking to add business outside their core service area.

Closing thoughts

Understanding the issues and potential impacts will help identify when action is needed and provide some guidance to thinking through a business strategy.

It’s also important to get involved on the issue. The breadth and details of legislative policy may seem overwhelming, but there are groups that will help keep you up to date and work on your behalf. Chambers of commerce, business associations and trade groups represent wide business interests in policy issues like privacy. So get plugged into a group that can support you and your business.

 Source: This article was published searchengineland.com By Wesley Young

Categorized in Internet Privacy

2:55 a.m. ET: Republican Donald Trump has been elected the 45th president of the United States, according to the New York Times and Associated Press, who called the election in the early hours of the morning on Wednesday. Trump’s ascendance to the White House came after a sweep of many hard fought swing states in the midwest, southeast, and rust belt, capping one of the biggest upsets in modern American political history.

At 2:50 a.m. ET, Trump took the stage at the Hilton hotel in midtown Manhattan to announce that Democratic nominee Hillary Clinton conceded defeat. In his remarks, Trump attempted to mend fences after a long and bitter presidential election. “It is time for us to come together as one united people,” Trump said. “I pledge to every citizen in the land that I will be president to all Americans,” he added, before describing an agenda he characterized as ‘America first’ while on the campaign trail.

As the votes rolled in for Trump, U.S. stock markets plunged with futures on the Dow Jones Industrial Average falling 506 points, or roughly 4%, as investors began to brace for Trump’s agenda and his anti-free trade views. Those losses were paired when Trump struck a conciliatory tone in accepting Clinton’s concession.

Fear of a Trump presidency was evident at the open of trading in Europe, where stocks in London plunged 2%, after futures indicated losses as high as 4%. The Hang Seng Index in Hong Kong tumbled 2.7%, the South Korean Kospi fell 2.5% and the Japanese Nikkei 225 was down 5.1%. Australian and New Zealand markets fell by a similar measure.

Assets that rise in value during periods of market upheaval, for instance the U.S. dollar, gold, and government bonds, surged. Gold rose $41 to $1,316 a troy ounce, or over 3.2%. Ten-year U.S. Treasury note yields fell 12 basis points to 1.73%, indicating an investor flight to the safety of government bonds. The euro fell 2%, while the Japanese yen fell 3%.

The Mexican peso, the asset that has swung most violently depending on prospects for the presidential vote, plunged. On Tuesday, as Democratic nominee Hillary Clinton showed strength in early voting, the peso rose to two-week highs. However, it tumbled over 13.07% after midnight when CNN called a string of states for Trump including Ohio, Florida, Iowa, North Carolina and Utah.

States that continue to hang in the balance include Virginia and Michigan are trending in Clinton’s direction, while Pennsylvania is moving in Trump’s favor. New Hampshire remains too close to call. But Trump has won a clear path to the presidency with 288 electoral college votes.

As voting has come in decidedly in favor of Trump, defying the expectations of almost every national poll and many state polls, it was the IBD/TIPP Tracking poll that may have won Tuesday. It predicted Trump’s victory in a final national survey on Tuesday afternoon.

Others who foresaw Trump’s outperformance in the general election, for instance DoubleLine Capital’s Jeffrey Gundlach, did not back down from their calls on Tuesday.

“I think we can all agree that Donald J. Trump has massively outperformed expectations in the past,” said Gundlach on a conference call with investors Tuesday evening. Such an outcome would “cause a downgrade of global growth expectations or maybe even a global growth scare,” Gundlach told FORBES earlier in the year.

Billionaire hedge fund manager Dan Loeb of Third Point LLC also said last week he reduced his market exposure and increased hedges ahead of the election, comparing the vote to Britain’s vote to leave the European Union in June.

“We clearly didn’t predict the outcome of Brexit, but we definitely saw that as a point in time where you had to ascribe some percentage to a scenario where there was a surprise. So we’ve done the same thing here,” he said on Nov. 4.

9:53 p.m. ET: Stock futures turned sharply negative and the Mexican Peso plunged against the U.S. dollar, reversing gains as Donald Trump expanded his lead on Hillary Clinton in the state of Florida. At 9:35 p.m. ET it was Republican nominee Trump who was in the lead by roughly 125,000 votes in Florida. The peso plunged over 7.9%, while stock futures were beginning to trade down sharply. Dow Jones Industrial Average futures fell over 489 points, or nearly 3%. Democrat leaning counties such as Broward and Miami-Dade hold most votes remaining to be counted, however over 95% of the vote is in. Fear proxies like gold and futures on the CBOE volatility index are surging as Trump gains a path to the presidency. Gold rose 2.34% after 9 p.m. ET.

CNN has called New York and Connecticut for Clinton, while Trump won three of five electoral votes in Nebraska, in addition to the states of North Dakota, South Dakota and Louisiana. States that are too close to call include North Carolina, Virginia and New Hampshire, while Trump is expanding leads in Ohio, Michigan and Wisconsin.

8:35 p.m. ET: Dow Jones Industrial Average futures pared gains as the state of Florida was up for grabs with over 90% of the vote in. As of 8:35 p.m. ET, Trump was winning Florida by roughly 83,000 votes with 48.9% of the vote versus Clinton’s 48% of the vote. Dow futures, which were up over 100 points, pared gains to 36 points. Trump has won Alabama and South Carolina, according to CNN. Clinton remains in the lead in North Carolina, Ohio and Michigan as the vote begins to come in. The U.S. dollar has begun to strengthen against the Mexican peso, rising 0.7% as Florida has tightened.

8:19 p.m. ET: Stock futures hit session highs after voting results from Florida and North Carolina showed Clinton clinging onto leads with well over half of the vote in. Clinton has won Illinois, Maryland, Delaware, Rhode Island, New Jersey, Washington D.C. and Massachusetts, while Trump has won Oklahoma, Mississippi and Tennessee, according to CNN.

7:35 p.m. ET: Trump has won Indiana, Kentucky, West Virginia, according to CNN. Clinton has won the state of Vermont, while races in North Carolina, Virginia, Georgia, South Carolina and Ohio remain too close to call, according to CNN. Early voting calls caused weakness in Australian stock markets as they opened Wednesday trading, and rising investor jitters reflected by a rally in gold and a 1.1% slump in the Mexican peso versus the U.S. dollar after it closed at two-week highs on Tuesday.

6:05 p.m. ET: Futures for the CBOE Volatility Index continued to fall in trading after the market close, while the Mexican peso continued its surge against the dollar. As of 6:05 p.m. ET, the peso was trading up 0.22% against the dollar. This trading indicates investors have maintained an expectation of a victory by Clinton over Trump.

4:00 p.m. ET: Stocks closed higher heading into U.S. presidential election results with the S&P 500 Index closing up 8 points, or 0.39%, at 2,139. The Dow Jones Industrial Average rose 0.4%, closing at 18,332 and paring some gains near the end of trading. Indications of investor fear such as the CBOE Volatility Index, gold, and the Swiss franc all fell on Tuesday, locking in a two-day risk rally ahead of the election. “The market expectation is a Clinton presidency,” said Joseph P. Quinlan, chief market strategist at U.S. Trust, at the close of trading.

The Mexican peso, the asset most correlated to investor perceptions of who will take the White House, rose 1.2% versus the dollar. Stocks rallied after futures trading opened lower on Tuesday morning and volatility was on the rise. Those fears mitigated as traders took in polling data, which showed resilience from Clinton. In a Clinton win over Trump, U.S. Trust’s Quinlan expects a rally heading into 2017. “The global economy is being run by the U.S.” Quinlan said, noting improving employment and income data. “With this big event behind us we are positioned for higher equity prices by the end of the year, and I think dramatically so,” he added.

3:30 p.m. ET: The CBOE Volatility Index, or VIX, rallied in late trading as investors sought a way to buy protection against market risk heading into the close of trading. The VIX has tumbled over the past few trading sessions, in concert with rising equity markets, as investors began to price in a win by Democratic nominee Hillary Clinton. The VIX rallied from down as much as 6% on Tuesday to slightly in the green by 3:15 p.m. ET, but equity markets held onto their gains. Confidence was bolstered when a Las Vegas judge denied a request by the Trump campaign to impound ballots from some polling stations in Clark County, Nevada.

2:28 p.m. ET: 

Markets began to sell-off in mid-afternoon trading after Republican nominee Donald Trump sued the Clark County Registrar of Voters, seeking to impound and segregate ballots from early voting on Friday, Nov. 4. Trump alleged in a suit the registrar “unlawfully”  extended voting hours by allowing voters to enter lines after an 8 p.m. deadline. The lawsuit, targeting areas of heavy reported early voting, sent the S&P 500 Index off intra-day highs to 2,139, up 0.39%, and caused fear gauges like the CBOE Volatility Index to pare early losses.

Earlier

It’s Election Day in the United States and voters are taking to polling stations across the country to decide the balance of power in the White House, in addition to races in the Senate and House of Representatives. In global markets, a bumper Monday rally on strength by Democratic nominee Hillary Clinton took of the thunder out of early Election Day trading.

(Photo by Spencer Platt/Getty Images)

U.S. equity markets opened up moderately in early trading Tuesday after gaining over 2% on Monday as traders began to price in a Clinton victory. (Read FORBES’ Election Day Live Blog)

The S&P 500 Index was up 0.38% by noontime, while the Dow Jones Industrial Average gained 0.44%, or 81-points, at 18,342. In Europe and Asia most large marked indices closed trading higher. Trading prices across assets indicated a bullish bias from traders.

Oil gained slightly in the morning trading session, rising 0.16% at 45.05 a barrel for West Texas Intermediate and gold fell slightly to 1,277 a troy ounce. Meanwhile, the yield on the 10-year U.S. Treasury rose for a second day and similar duration government bonds in Brazil and Mexico fell. Safe haven currencies like the Swiss franc fell. The CBOE Volatility Index, meanwhile, fell 3% adding to Monday losses as traders took off their hedges.

Volatility in early trading was mostly confined to Tuesday stock blowups from Valeant Pharmaceuticals, Hertz and OneMain Financial, which all used Election Day to dump significantly negative earnings and guidance on their investors.

Embattled Valeant slashed its 2016 financial outlook, provided a cagey picture into its 2017 earnings expectations, and recorded a billion dollar writedown related to a recent acquisition. The stock, a top holding of hedge funds Pershing Square and ValueAct Capital, plunged 18% to new multi-year lows below $16 a share. It has fallen nearly 85% year-to-date, battered by an accounting and price gouging scandal that’s spawned numerous criminal and regulatory probes.

The picture was even worse for OneMain and Hertz, which both saw their shares fall more than 30% in early trading. OneMain, a consumer finance company, reported third quarter earnings that shows a significant deterioration in the credit of its customers as charge-off ratios on loans surged. The stock plunged 38% in early trading, putting year-to-date declines at 60%.

Car rental giant Hertz, meanwhile, plunged over 30% after the company significantly missed third quarter earnings estimates. The company reported third quarter earnings of 49-cents, down from the $2.60 it earned a year ago, and well below the $1.58 a share analysts were expecting. Hertz also slashed its full-year earnings guidance, causing investors to fret its $15 billion debt load.

Stock blowups aside, as midday trading began markets were trending higher and signs of investor fear mitigated. The Mexican Peso and the CBOE Volatility Index have been the two most volatile gauges of investors’ election expectations in what’s seen as a binary choice. As of now, a Trump presidency is seen as causing a volatility spike and a tumble in the peso given his anti-free trade views and temperament. So far, markets are siding with Clinton. By 12:30 pm, the Mexican Peso was trading 0.84% higher versus the dollar, while the VIX was down 4.65%.

Expect trading volatility to increase later in the afternoon or overnight as election data comes in.

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Investment strategists at RBC Capital Markets have laid out a baseline for a Clinton and a Trump victory, arguing that the S&P 500 should rally 3%-to–4% upon a Clinton win and decline 10%-to–12% on a Trump victory. At current levels, RBC feels the VIX should decline to 13–14 upon a Clinton victory and rise to 20–25 if Trump prevails, while emerging markets such as Mexico and China should rally under a Clinton presidency and sell off sharply if Trump wins.

Source : forbes

Categorized in Others

When the most recent photos released by drug vendors fromdarknet marketscaptured the eye of the public, many were certain that there would be repercussions for the seemingly careless acts of defiance disguised as product advertising.

In their displays of their illegal wares, some of these online drug vendors forgot to remove or alter some crucial bit of information which could be instrumental in pointing out their exact locations based on the uploaded photos.

“Dealers Virtually Shared a Digital Map” – Harvard Seniors

EXIFis data that attaches to images taken by smartphones and digital cameras. This is especially so if the said device(s) feature in in-built GPS feature. Among the data tagged in the photos include geolocation information that is detailed enough to pinpoint exact locations based on the photographs.

Harvard seniors Michael Rose and Paul Lisker elucidate that this is basically the kind of information any discerning drug dealer from the darknet markets would want to keep hidden.

By posting pictures of their illicit goods with accurate location data, they are effectively aiding the authorities to track them down. According to Rose, the accuracy of the data points is enough to pinpoint an exact house, let alone a location.

North America and Europe Lead in the Number of Online Drug Vendors

drug-maket
Majority of darknet vendors came from US and UK

According to findings posted on Mediumby the two Harvard researchers when they plotted the locations scraped from posted photographs, they indicated that most of the darknet markets were based in Europe and North America.

The data was slightly altered to within a mile of accuracy for privacy reasons. Differently colored spots represented different online drug markets.

Lisker and Rose relied on data dug up from the Black-Market Archives, the brainchild of an independent researcher only known by the moniker Gwern. The two Harvard seniors conducted the research as part of a project on privacy and technology.

The site proved an invaluable resource as it featured data from popular darknet markets from as far back as late 2013.

Tor Does Not Always Suffice When it Comes to Online Anonymity

Using a computer script they wrote, the two Harvard seniors were able to dig up an estimated 7.5 million photographs from darknet markets. Of these, about 2,300 featured location data. However, only 229 photos were tagged from unique locations.

Michael Rose was surprised to see that some of the information came from well-established darknet markets which he had suspected would automatically strip such information to protect the anonymity of the user.

Only a small percentage of location data was the result of forgetful drug vendors, however.

One notable case was that of the recently shut down drug market, Agora. 52 of the 229 unique geotagged images came from what was one of the most popular darknet markets.

In a curious turn of events, the photographs with unique location data began to disappear from Agora’s listings in the Black-Market Archives on March 18, 2014. According to Rose, this is when darknet markets began to realize their colossal blunder.

Geotagged Photographs on Black Markets are Indicators of Carelessness

darnet-codes
darknet seller may also be misleading authorities

Rose points out that the existence of photographs with accurate information data is an indicator of failure from both the sellers and thedarknet marketsinvolved.

However, their post on Medium suggests that the inclusion of location data to the photos posted on various darknet markets could indeed be purposeful, and a way to misdirect or manipulate the authorities by pointing them in the wrong direction.

Despite all, Rose and Lisker advise the authorities not to be too enthused as finding any useful photographs is hard and therefore, it is not the most effective way to curb the sale of illicit drugs on darknet markets.

Source : darkwebnews

Categorized in Deep Web

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