How Calls for Privacy May Upend Business for Facebook and Google

But any ambitions for new rules may run into the realities of the tech industry.

Privacy advocates and even some United States regulators have long been concerned about the ability of online services to track consumers and make inferences about their financial status, health concerns and other intimate details to show them behavior-based ads. They warned that such microtargeting could unfairly categorize or exclude certain people.

In 2010, for instance, the Federal Trade Commission proposed a new option for consumers, called Do Not Track. Two years later, the Barack Obama administration introduced a blueprint for a Consumer Privacy Bill of Rights , intended to give Americans more control over what personal details companies collected from them and how the data was used.

But the Do Not Track effort and the privacy bill were both stymied.

Industry groups successfully argued that collecting personal details posed no harm to consumers and that efforts to hinder data collection would chill innovation. Instead, the advertising industry created a program to allow consumers to opt out of having their data used for customized ads, although it does not allow people to entirely opt out of having their data collected.

“If it can be shown that the current situation is actually a market failure and not an individual-company failure, then there’s a case to be made for federal regulation” under certain circumstances, said Randall Rothenberg, chief executive of the Interactive Advertising Bureau, a trade group.

The business practices of Facebook and Google were reinforced by the fact that no privacy flap lasted longer than a news cycle or two. Nor did people flee for other services. That convinced the companies that digital privacy was a dead issue.

If the current furor dies down without meaningful change, critics worry that the problems might become even more entrenched. When the tech industry follows its natural impulses, it becomes even less transparent.

That would hamper any long-term understanding of the relationship between social media and political views, an urgent question in Germany, Myanmar, Sri Lanka, the United States and many other places.

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