Topical Series

Online Privacy
Is the issue of privacy in the 21st centur y overblown?
WhenFacebook announcedrecentlythat it would allowusersof itsmobile serviceto alert all their friends on the social
network to their whereabouts, it immediately triggered another bout of hand-wringing
about the implications for
peoples privacy! Social networks, location-based services on mobile phones and a host
of other innovations have greatlyincreased ourability toshare large amounts of information online! "ut atthe same time, they have increased
the risk that companies, governments and criminals may e#ploit the same information
without our knowledge!
To some, worries about $Privacy %!&' seem greatly overblown! People are indeed making
more information public
than ever before on the internet, they say! "ut that is because societal norms are changing
and it has become more acceptable to share details of ones daily life online! The rise of reality T( shows such as
$"ig "rother' is another
e#ample of this trend! )oreover, there is plenty of evidence to suggest that folk use the
detailed privacy controls provided by firms such as Facebook to limit access to their information! Several studies
have shown that teenagers, who are often criticised for plastering intimate details of their lives online, use these
controls as much as adults!
"ut is self-regulation enough* +ot according to some critics of internet firms who argue
that economic
self-interest inevitably encourages them to make more information public by default!
,ompanies such as -oogle and Facebook, they say, are engaged in a form of digital data-collection arms
race, with each trying to gather and e#ploit as much information as possible about individuals likes,
habits and tastes! The
international fuss over -oogles Street (iew service, which inadvertently collected data
from private Wi-Fi systems as part of an ambitious pro.ect to photograph streets around the world, has
highlighted the threat
to privacy that this arms race poses! /ence growing calls for more robust government
action to protect individuals online privacy! "ut are new laws and regulations really needed* Or is the
solution to step up industry-led and public efforts to educate people about the implications of $over-sharing'
on the web*
One View
Today there is no meaningful check on private-sector data collection! ,ompanies post
$privacy policies' on websites and then do as they wish with the personal information they collect! +ot
surprisingly, identity theft, security breaches and growing unease about online privacy are all on the
rise! +ew
service offerings are met with both enthusiasm about technology and worries about
personal privacy!
The pressures will only mount as competition among internet firms for advertising
dollars heats up! "usiness
practices will become more opa0ue and consumers will find it more difficult to e#ercise
meaningful control
over their personal information! The launch of Facebook Places, with its complicated and
confusing opt-out re0uirements for user location data, is not a foolproof solution!
-overnment can also play a substantial role in safeguarding privacy when it is directed
by law to do so!
Those who opposed the Patriot 1ct recognised that one of the solutions was to give
.udges, that is to say
$the government', greater authority to review warrant applications so that prosecutors
could not simply
gather digital data unchecked! 2n similar fashion, we need the government agencies
charged with consumer
protection, privacy protection and antitrust review to play a more active role on behalf of
internet users!
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,ompanies that collect personal information for one purpose and then turn
around and use it for a completely unrelatedpurpose should notget a freepass fromregulators! 1ndthe consolidationof large internet firms, particularly
in the online advertising world, should set off alarm bells for competition
authorities! +ot only does the massive profiling of users by incumbents place users in a digital fishbowl, it also
makes it more difficult for new entrants to compete!, ompetition, innovation and privacy protection could easily become allies asthe internet economy evolves!
We also need independent privacy agencies to speak up when the private
sector or the government cross into
"ig "rother territory! 3e0uiring 3F24 tags in products and identity
documents, gathering up 4+1 samples for law enforcement use and consumer products, and tracking the location of
internet users without their knowledge or consent all pose new challenges that cannot be ignored!
Some who draw a bright line between data collection by the private sector
and data collection by the
government do not understand that the private sector has become the primary
means for government to collect data on citi5ens! -overnment agencies are often the top clients of
those companies in the data broker business! 1nd what governments cannot buy they can often obtain
through legal authority and data
retention mandates! So, the reluctance to impose meaningful limits on private
sector data collection has made it far easier for governments to build elaborate databases! Of course, it
can be said that those who are
concerned about privacy can always choose not to use the internet! "ut that is
a remarkably short-sighted and unproductive view, a bit like saying that anyone who does not like air
pollution should simply stop breathing
To be sure, there are real challenges in crafting effective and meaningful
privacy rules for the internet! Policies should be technology neutral, stable, forward-looking and non-
discriminatory! Some policies will fail! Others
will work beyond e#pectation! 2nnovation with public policy, as with
technology, should be welcome!
2n the long run it will become obvious that government6that is, the legal
institutions established to
safeguard the rights of citi5ens6will need to do more to protect online
privacy! The 0uestion now is only how long it will take! 2n the meantime, Facebook users who $check
in' will be left to wonder
to whom, other than their friends, the social networking firm has decided to
reveal their location!
Another View
The internet is not for couch potatoes! 2t is an interactive medium! While
internet users en.oy its offerings, they should be obligated to participate in watching out for themselves!
-overnment efforts to provide online
privacy will almost certainly make a hash of things!
2nternet-connected devices and computers both retrieve information and send
out information! This interactivity
is why the internets usefulness and entertainment stand head and shoulders
6and chest and waist6above static media like T(, movies and 7many8 books!
The blessings of interactivity come at a cost! There is someone 7well,
something6a server8 on the other end of every mouse-click, and sometimes every keystroke! The cost of interactivity
is privacy! "ut many internet users
do not know the full price they are paying! 9naware of how internet
connections, browsers, websites, plug-ins
and various other technical tools work, lots of people do not know what
information they share when they go
online, how much of it, or how revealing it is! Obviously, this deprives them
of the opportunity to do anything about it!
There are concerns and complaints beyond control, of course! Potential unfair
uses of information posted
or released online are a $privacy' concern! People worry about the security of
their financial accounts and
reputations against identity fraud, or even about risks of theft or violence
produced by information put online!
Other $privacy' concerns include intrusive protocols and practices-spam,
pop-ups and the like6that interfere with peaceful en.oyment of the net!
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2t is understandable for people, feeling bowled over, to wish government
would take these challenges from their hands! The promises of regulation are lavish, though the results are not
so great! Witness the 1merican
governments )inerals )anagement Service, which did not prevent a recent
massive oil spill in the -ulf of )e#ico! The 1merican Securities and :#change ,ommission did not
discover "ernie )adoff s multibillion-
dollar scam despite being told of it repeatedly! Should consumers abdicate
responsibility for privacy to such institutions*
For some privacy problems, law and government are already appropriately
on the case! ;aw is rightly recognising privacy policies as enforceable contractual promises! Fraud is
already a crime, irrespective
of medium or sub.ect matter! The problem with online law enforcement is not
the need for new law or for government to $do more'! -overnment should get better at carrying out
its e#isting responsibilities!
2n the meantime, controlling identity fraud re0uires people to watch out for
themselves by monitoring their financial statements and credit reports! The financial-services and credit-
reporting industries must similarly
keep watch on their end! Waiting for government help will not do!
-overnment help will not do for protecting privacy in its stronger $control'
sense either! Privacy is a value that
varies from person to person and from conte#t to conte#t! Perfectly nice,
normal people can be highly protective of information about themselves or indifferent to what happens with data about
their web surfing! 1ny government
regulation would cut through this diversity! -overnment $e#perts' should not
dictate social rules! 3ather, interactions among membersof the internetcommunity should determine the internets social and business norms!
The limiting factor on the success of such efforts so far has been consumer
awareness and interest! 1ll ma.or browsers allow users to control online tracking, for e#ample! 72n 2nternet
:#plorer and Firefo#, go to the $Tools'
pull-down menu, select $Options', click on the $Privacy' tab and then
customise cookie settings!8 <et few web surfers take these rudimentary steps!
The social engineer takes consumer indifference as a signal that people
should be forced to prioritise privacy, but this would undercut consumer welfare as indicated by the best evidence
available= consumer behaviour!
People appear generally to prefer the interactivity and convenience of todays
web, and the free content made more abundant by ad network tracking!
1ppeals like this6to revealed consumer interest6typically fall on deaf ears
because people involved in privacy debates care more about privacy than the average person! :ach of us
believes ourselves to be typical,
and we take our own opinions as the best evidence of consumer interest! 3are
will be the reader willing to suspend personal opinion on privacy in favour of evidence!
The privacy challenges of the online environment are real and difficult! "ut
asking the government to fi# them is the couch potatos solution! 1nd it is an unsatisfactory one! -overnment
regulation will make consumers
worse off than they could be! The better alternative is to get people educated
and involved in their own privacy protection!
The Third Eye
We now live in a world where what we buy, what we tell our friends, how we
spend our leisure time, where we
walk, where we drive and more are collected, analysed and linked to
information about our gender, income, age,
occupation, ethnicity and other demographic information! ,ompanies you
have never heard of are creating
these profiles about you without your knowledge or permission! The
information is bought, sold, rented and
auctioned by entities that use it to decide what commercial messages you get,
what discount coupons you receive, and what prices you pay for products and services!
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2n the interest of attracting audiences, media firms are beginning to consider
how they can use at least some of those data to tailor the news, information and even entertainment you
receive! The companies involved
dismiss concerns about these activities as unwarranted! They say their only
goal is to reach individuals with messages most relevant to them! 1nd they note that much of the time the
people they reach are anonymous!
)any may disagree! The supposed relevance of commercials is far
outweighed by activities that are sowing the seeds of broad social discrimination in the marketplace, increasing
peoples distrust that companies with
such data will interact with us fairly, and reinforcing a sense that the
government cannot protect us when we cannot protect ourselves! )oreover, the claim of anonymity in all this is
meaningless! 2f a company can follow your behaviour in the digital environment6and that includes the
mobile phone and potentially your
television set6its claim that you are anonymous is hollow!
1dvertisers now e#pect media firms to deliver to them very particular types
of individuals6and increasingly particular individuals6with a detailed level of knowledge about them and
their behaviours that was unheard of even a few years ago! Special online advertising e#changes, owned by
-oogle, <ahoo>, )icrosoft, 2nterpublic
and other ma.or players, allow for the auction of individuals with particular
characteristics, often at the precise moment that that person loads a web page! 2n fact, through cookie-matching
activities, an advertiser can
actually buy the right to reach someone on an e#change whom the advertiser
knows from previous contacts and is now tracking around the web!
There are many great things about the new media environment! "ut when
companies track people without their knowledge, sell their data without their knowledge or permission, and then
decide whether they are, in the words
of the industry, $targets' or $waste' 7that is, not useful8, we have a social
problem! 1 recent national survey showed emphatically that 1mericans do not want this! 2f it is allowed to fester, and
when they begin to realise how it pits them against others in the ads they get, the discounts they receive, the
television-guide suggestions and news
stories they confront, and even the offers they receive in the supermarket,
they will get even more disconcerted and angry than they are now! 1 comparison with the financial services
industry is apt! /ere was an industry
engaged in a wide range of arcane practices not transparent to consumers or
regulators that had a serious negative impact on our lives! 2t would be deeply unfortunate if the advertising industry
followed the same tra.ectory!
We must move from the current marketing regime that uses information with
abandon6where peoples data are being sliced and diced to create reputations for them that they do not
know about and might not agree
with6to a regime that acts towards information with respect! That is, where
marketers recognise that people own their data, have rights to know where their data are collected and used,
and should not have to worry when they travel through the media world that their actions and backgrounds
will cause them unwanted social
discrimination regarding what they later see and hear!
9ntil recently, educating the public about data collection and giving them
options would be sufficient to deal with privacy issues related to advertising! /owever people do not have
and will not ac0uire the comple# knowledge needed to understand the increasing challenges of this
marketplace! Opt-out and opt-in privacy
regimes, while necessary, are far from sufficient! People will rarely have the
time or ability to make cost-benefit
evaluations of how sites and marketers use their data under various opt-in or
opt-out choices! One path is for
government to limit the e#tensiveness of data or clusters of data that a digital
advertiser can keep about an
individual or household! Some industry organisations resist such suggestions,
depicting scenarios of internet
doom if such regulations regarding digital platforms take hold! "ut a level
regulatory playing field in the interest
of privacy will actually have the opposite effect! 2t will increase public trust
in online actors and set the stage for
new forms of commercial competition from which industries and citi5ens
will benefit!
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