Legal and Privacy Issues of Neuromarketing
Can Facebook Control How You Feel?
For one week in January 2012, data scientists skewed what almost 700,000 Facebook users saw when they logged into its service. Some people were shown content with a preponderance of happy and positive words; some were shown content analyzed as sadder than average. And when the week was over, these manipulated users were more likely to post either especially positive or negative words themselves.
This experiment was revealed as part of a new study, published in the prestigious Proceedings of the National Academy of Sciences. The study found that by manipulating the News Feeds displayed to 689,003 Facebook users users, it could affect the content which those users posted to Facebook. More negative News Feeds led to more negative status messages, as more positive News Feeds led to positive statuses. Many previous studies have used Facebook data to examine “emotional contagion,” as this one did. This study is different because, while other studies have observed Facebook user data, this one set out to manipulate it.
This experiment is almost certainly legal!
In the company’s current terms of service, Facebook users relinquish the use of their data for “data analysis, testing, and research.”
How did we react to this?
So, what is Neuromarketing?
Neuromarketing is a new field of marketing research that studies consumers' sensorimotor, cognitive, and affective response to marketing stimuli. It is the study of how people's brains respond to advertising and other brand-related messages by monitoring brainwave activity, eye-tracking and skin response. Neuromarketing researchers use brain mapping technologies to measure changes in activity in parts of the brain and biometric sensors to measure changes in the subject's physiological state like heart rate, and rate of respiration, to learn why consumers make the decisions they do, and which brain areas are responsible. Neuromarketing research is expanding rapidly in both academic and business sectors. Companies such as Google, CBS, Frito-Lay, and A & E Television amongst others have used neuromarketing research services to measure consumer thoughts on their advertisements or products.
The 'Cheetos' Case Study
In 2008, Fritio-Lay hired a neuromarketing firm to look into how consumers respond to Cheetos, their top-selling brand of cheese puffs in the United States. Using electroencephalography (EEG) technology on a group of willing subjects, the firm determined that consumers respond strongly to the fact that eating Cheetos turns their fingers orange with residual cheese dust. The EEG patterns also indicated “a sense of giddy subversion that consumers enjoy over the messiness of the product.”
With this data, Frito-Lay moved ahead with an ad campaign called “The Orange Underground,” featuring a series of 30-second TV spots in which the Cheetos mascot, Chester Cheetah, encourages consumers to commit subversive acts with Cheetos. The campaign garnered Frito-Lay a 2009 Grand Ogilvy Award from the Advertising Research Foundation.
Frito-Lay Chief Marketing Officer Ann Mukherjee says brain-imaging tests can be more accurate than focus groups. Frito-Lay brain-tested a commercial that traditional focus groups panned. The spot for Cheetos featured a woman taking revenge on someone in a Laundromat by putting the orange snack food in a dryer full of white clothes. Participants said they didn’t like the prank, probably because they didn’t want to look too mean-spirited to other focus group members. But EEG tests conducted by NeuroFocus showed brain activity that suggested women loved the ad. The snack-food marketer started airing the prank ad early last year.
Potential Legal Issues for Neuromarketing
1) Consumer Protection
As neuromarketing techniques become more sophisticated and arguably more powerful, the industry will likely face increasing resistance from regulators concerned that consumers are being misled into believing they want or need a product they have no use for, or deceived into thinking a purchase arises from their rational choice whereas in fact they are being induced to act based on stimulated subconscious impulse. To regulators, these techniques may cross the line from fair encouragement to unlawful coercion.
For ex. one European regulatory agency has already taken action against a financial services company employing neuromarketing.
2) Privacy Issues
Some of the more aggressive claims by neuromarketers about the power of their techniques to understand brain function and impact behavior have predictably raised privacy concerns among regulators and the general public. At a time of increased sensitivity to corporate monitoring of consumer behavior, thanks largely to the proliferation of Internet tracking and targeting technologies, the prospect of additional intrusions into personal thought processes has raised heightened concern.
In addition to facing scrutiny by the Federal Trade Commission, neuromarketers may soon be confronted by the burgeoning privacy plaintiffs’ bar in the U.S., which in the last year alone has filed more than 150 lawsuits.
3) Tort Issues
The use of neuromarketing techniques to induce purchase of a product which, if misused, could cause personal injury, raises important questions under the law of products liability. It is not at all difficult to imagine product liability claims being asserted, especially by or on behalf of children and other vulnerable groups, that neuromarketing wrongfully induced the claimants to use products that are unreasonably dangerous for them, or to over-consume or become dependent on unhealthy foods or beverages, by overriding their rational powers of self-control. Other tort claims may be advanced under a theory that by penetrating to internal areas of brain function, neuromarketing impermissibly “touches” a protected personal domain giving rise to liability for battery or assault.
In its ethical principles and code of conduct, the American Psychological Association (APA) defines informed consent as this:
"When psychologists conduct research or provide assessment, therapy, counseling, or consulting services in person or via electronic transmission or other forms of communication, they obtain the informed consent of the individual or individuals using language that is reasonably understandable to that person or persons except when conducting such activities without consent is mandated by law or governmental regulation or as otherwise provided in this Ethics Code."
In the Facebook case, the experiment was carried out under Facebook's extensive terms of service. Numerous organizations have criticized neuromarketing’s potentially invasive technology. Jeff Chester, the executive director of the Center for Digital Democracy, claims that neuromarketing is “having an effect on individuals that individuals are not informed about. If the advertising is now purposely designed to bypass those rational defenses . . . protecting advertising speech in the marketplace has to be questioned."
Existing Legal Protections from Neuromarketing
Institutional Review Board
An institutional review board (IRB), also known as an independent ethics committee (IEC), ethical review board (ERB) or research ethics board (REB), is a committee that has been formally designated to approve, monitor, and review biomedical and behavioral research involving humans. They often conduct some form of risk-benefit analysis in an attempt to determine whether or not research should be done.
The National Research Act 1974
Enacted by the 93rd United States Congress. It created the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research to develop guidelines for human subject research and to oversee and regulate the use of human experimentation in medicine.
The Belmont Report
Created by the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research. Its full title is the Belmont Report: Ethical Principles and Guidelines for the Protection of Human Subjects of Research, Report of the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research. The Report was issued on 30 September 1978 and published in the Federal Register on 18 April 1979.
Nuromarketing Science and Business Association (NMSBA) Code of Ethics
The NMSBA Code of Ethics for the Application of Neuroscience in Business. Adoption of this code is a condition of membership to the NMSBA. The code may be revised from time to time to ensure that it adequately reflects the highest ethical standards for the neuromarketing research industry.
It is only a matter of time before the consumer advocacies and public health communities begin to act on their increasing insecurity regarding the invasive nature of Neuromarketing. We will likely see various types of action taken to attempt to curtail and impose restrictions on neuromarketing in the near to medium term as this technique develops as a central component of standard marketing practice. These circumstances raise a number of policy choices that the industry needs to consider. These choices need to be addressed on at least three levels:
• Scope of Use.
The industry should first develop a baseline analysis of the extent to which neuromarketing is currently being used as a standard practice. Data should be gathered by country and by product category. It is clear that neuromarketing providers have moved the technology out of university settings and into the marketplace. But the industry needs to conduct a disciplined assessment of where and how this growth is occurring on a global basis.
The development of self-regulatory standards for the advertising industry in the application and scope of use of neuromarketing will likely play a critical role in reducing both legal and policy risk in this field. The industry should consider developing policies that provide for peer review of claims of efficacy, establish ethical standards for implementing neuromarketing techniques, prevent targeting of children and other vulnerable groups, and assure accountability.
The advertising industry needs to develop a strategy for interacting positively with the various stakeholders that will have an interest in the use of neuromarketing. Not to do so risks granting free license to those who are most critical of the industry to sensationalize the practice and shape the narrative in ways which might induce regulators spurred by consumer hostility to sharply curtail this promising new field.