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Today on the Verizon Policy blog Link Hoewing writes about the results of an academic research paper that looks at the effectiveness of “shaming” corporations into behaving properly. The research examines how companies respond to social pressure related to environmental causes, and shows that companies tend to improve their behavior after receiving poor rankings from independent social ratings agencies.

Hoewing uses that research to argue that self-regulation works, because it is in the best interest of the company to listen to its customers. He brings up the current issues of online privacy, where ISPs have turned to firms such as Phorm or NebuAd to profit by selling advertisements served up based on where a customer surfs:

Interestingly, a couple of years back during the debate on net neutrality, I made the argument that industry leadership through some form of oversight/self-regulatory model, coupled with competition and the extensive oversight provided by literally hundreds of thousands of sophisticated online users would help ensure effective enforcement of good practices and protect consumers.

So far that really hasn’t worked out. There are two problems with this argument for ISP self regulation. The first is that there’s little competition, meaning customers can’t vote with their feet if an ISP is abusing their privacy. Second, there’s no real transparency into who’s using such services, unless an independent agency is able to find out about it.

So, as the ISPs want to offer up their own regulations for handling your privacy online, beware of this line of thinking that says industry self-regulation will work. If carriers could be shamed into doing the right thing, AT&T wouldn’t be helping the government listen in on our phone calls.