Clouds, Cookies, Rules And Confusion

Michael Hedges March 28, 2011 Follow on Twitter

A cloud hovers over the technology horizon at this very moment. All those clever IT engineers have created such joy, not to forget opportunities for commerce, that new rules are needed to keep it all from being so overwhelming. Big changes are in store for the web, some lovely, some weird and all challenging.

Cloud computing as a concept has been around for decades. Big technology providers from IBM to Microsoft and Google to SAP see it or its several variations as the next big thing in internet technology (IT). In many respects cloud computing promises to reinvent the internet.

It also promises to reinvent the user interface, the devices that people use to access stuff (data is the technical term) and make that stuff do stuff (that would be processing). Processing as well as data would exist in the cloud, a non-linear space made up of interconnected servers. Cramming more sophisticated processors into smartphones, laptops and tablets so users can do more, more and more has likely reached a threshold. Device makers and developers have been expecting this. Cloud computing is far more efficient.

“Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the internet, extends IT's existing capabilities,” explained Eric Knorr and Galen Gruman in InfoWorld (July 19 2010). Every IT user – which is just about everybody – would, they say, pay a ‘cloud’ provider for the services they need, sort of like a using central water supply utility rather than digging and maintaining their own well. Amazon, the online retailer and maker of the Kindle tablet, is heavily invested in the cloud computing concept. Media content providers – from publishers to broadcasters and everything in between – will find cloud computing, like every other step along the digital trail, either a great opportunity or just another nightmare.

Microsoft, long a supporter of the ‘dumb’ PC idea, is throwing a lot of energy and money into the cloud. Gone will be the days of buying a license to use Microsoft software. They’ll just send a bill, figuratively speaking, for services used. The cloud is platform-neutral, too; all devices are equally accessible and billable.

Indeed, Microsoft opened in Brussels the Microsoft Center on Cloud Computing and Interoperability (March 22). The featured guest was European Commission (EC) Digital Agenda Vice President Neelie Kroes. After paying a hefty €900 million EC anti-trust fine in 2008 for abusing its dominant market position, Microsoft has lobbied the EC to enforce existing single market rules on interoperability. It was Commissioner Kroes, then head of DG Competition, who sent Microsoft the biggest bill ever from the EC in an anti-trust case. Apparently, she and Microsoft CEO Steve Ballmer remain on speaking terms.

Interoperability, of course, is essential to developing cloud services. “Interoperability is essential for the cloud to be fair, open and competitive,” said Commissioner Kroes with conviction. “Interoperability is an issue I take very, very seriously. It is going to take partnership between industry and government, and European leadership.”

Mixed into the discussions of interoperability and cloud computing are firstly, said Commissioner Kroes, “users rights, data protection and privacy.”   The 1995 EC Data Protection Directive explicitly requires data “controllers” to “process” personal information only with consent. Personal information, in the Directive’s definition, is any information that can be linked to a person, from bank accounts to IP numbers.

A review of the Data Protection Directive was set in motion last November to consider the newest of the new technologies. “Today technology allows individuals to share information about their behavior and preferences easily and make it publicly and globally available on an unprecedented scale,” said the EC Communication (November 4, 2010) outlining the scope of the review. “Social networking sites, with hundreds of millions of members spread across the globe, are perhaps the most obvious, but not the only, example of this phenomenon. Internet-based computing whereby software, shared resources and information are on remote servers (‘in the cloud’) could also pose challenges to data protection, as it may involve the loss of individuals' control over their potentially sensitive information when they store their data with programs hosted on someone else's hardware. EC DG Justice under Commissioner Viviane Reding is taking the lead on revising the Data Protection Directive and is expected to take an even harder line protecting individual rights.

Some are critical of stronger data privacy rules, including what Commissioner Reding calls “the right to be forgotten,” considering them bad for business. Speaking at a Westminster Media Forum event (March 22), Facebook’s director of European policy Richard Allen warned of “shooting the messenger.” The medium is the message?

“There is an increasing trend that where people are uncomfortable about content, they're not necessarily going to the source of that content, but they're going to those places where the content is shared or indexed and asking them to resolve the problem,” Allen warned. “I think that's extremely worrying for a whole range of reasons.”

Cookies – those genius pieces of code that remember passwords and send personalized ads to browsers – were not even invented when the Data Protection Directive was written. They are considered to be the connective tissue between the internet and e-commerce. Rupert Murdoch would not have paywalls without them. There are cookies in your PC, laptop and cellphone, probably soon in your refrigerator and certainly in your automobile.

Coming into force in May is an amendment to the EC’s Privacy and Electronic Communications Directive, passed in 2002, aimed at behavioral advertising, the ads for ski resorts that appear on any webpage you access after writing “I need a vacation” on Facebook.  The advertising people ain’t happy because the use of cookies for ad placement will require “explicit consent.” Before a browser loads or sends a cookie, a user must be shown an opt-out button.

Several countries are scrambling to interpret the ‘cookie directive’ into national laws before Commissioner Reding starts sending out nasty letters. The UK’s Department of Culture, Media and Sport wants to satisfy the EC rule with an opt-in option.  Swedish law allows cookies “so long as the user does not explicitly say no to cookies,” but that changes in July to require a user to be “consulted and approve the use.” Dutch law is similarly strict.

The effect on web users could be dramatic. “The big challenge is how to obtain permission without affecting the consumer's experience,” said UK consumer advocate Which? advisor Rob Reid to the BBC (March 25).  Strict interpretation of the ‘cookie directive,’ said IAB Belgium CEO Patrick Marck to De Staandard (March 23), “would only annoy residents in Belgium and chase surfers away from Belgian websites.”

On the other hand, there are some who would like to see a bit of a damper on the money flowing to the web people.

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