Posted by Pamela Passman
Corporate Vice President & Deputy General Counsel, Global Corporate & Regulatory Affairs

In the emerging Web 3.0 world, privacy will likely become a principal feature on which consumers base decisions about which products and services to use.

Here’s why: Web 3.0 technologies will be able to understand your likes, dislikes and preferences based on your online activity, and proactively offer you information and services tailored to your interests.

For example, as the weekend approaches and on the basis of your prior activity, an application may suggest a movie based on reviews you read, and, if you want, purchase tickets for you and take steps to identify restaurants that you (or the friends in your social network) have “liked” and book a reservation, calculating the time it likely will take for you to enjoy your meal using previous data it may have about whether you eat early or late.

As the companies that provide these kinds of services gain access to more data and have the ability to know even more about us, we anticipate that the traditional division between competition law and consumer protection law (which includes privacy) may begin to erode.

As privacy becomes a principal feature on which consumers base decisions regarding search, browsing, social medial, mobile and other services, we expect to see the IT ecosystem provide a variety of approaches to privacy. Indeed, this already happens today.

In some cases, privacy might be thought of as a proxy or form of “price” (especially when the underlying product might be free to use). In other words, consumers might decide to “pay” for certain “free” or subsidized products, services or features with their privacy, which in turn can translate into dollar revenue for the product or service provider.

Earlier today, I participated in a panel discussion at the American Bar Association’s 59th Annual Antitrust Spring Meeting in Washington, D.C. about the intersection of competition and consumer privacy law in the developing Web 3.0 environment.

Competition—and competition law—may have a significant impact on the “privacy prices” consumers have to pay. However, if a company’s privacy practices are not clear, consumers will not understand the “price” they are paying. This is where consumer protection might play an intersecting role, by enhancing transparency and empowering consumers to make informed privacy choices.

In the Web 2.0 world we live in today, privacy is already an important competitive differentiator. Consumers want to know that companies delivering interactive content, social networking and tailored advertising are disclosing truthfully how they plan to use their data and are behaving responsibly in managing it. I believe that Microsoft’s longstanding commitment to privacy will serve us well as we compete for business—and vie for consumers’ trust—in a Web 3.0 world.

For more than a decade—as part of our commitment to creating a Trustworthy Computing ecosystem—we have developed and employed a variety of principles, policies and procedures to help ensure that we’re thinking about privacy at all stages of the product lifecycle – a Privacy-by-Design approach.

We employ more than 40 people who focus on privacy full-time and another 400 across the company and around the world that support privacy as part of their jobs. We share best practices with the technology industry and the privacy community, including a public version of our Privacy Guidelines for Developing Software Products and Services.

Earlier this month, we launched Internet Explorer 9, the first major Web browser to employ a do-not-track tool. This tool, called “Tracking Protection,” offers consumers a new way to identify and block many forms of undesired tracking via “Tracking Protection Lists” that enable consumers to control what third-party site content can track them when online. We began developing this tool well in advance of the Federal Trade Commission’s discussion of a do-not-track mechanism in its Proposed Privacy Framework of December 2010, and so we also support the FTC’s approach.

We support a multi-pronged approach to privacy that includes legislation, industry self-regulation, technology tools and consumer education. We look forward to continuing to provide leadership and innovation in privacy protections as we move to a Web 3.0 world.