White paper - privacy in the digital age

WHITE PAPER
PRIVACY IN THE DIGITAL AGE
JULY 2008
EXECUTIVE
Citizens of modern societies live in a world of digital data, generating an informationtrail as they e-mail, shop with loyalty cards, surf the Web, make wireless calls. Inresponse, cautious consumers, watchdog groups and governing bodies are raisingalarms about the Orwellian implications. As technology gets ever more powerful andsophisticated, the issue of digital privacy is rapidly coming to the fore.
Key Questions
• What are the privacy issues that are top of mind when discussing search engines, ISPs and Web giants like AOL and Microsoft? What steps are governments taking to regulateand control their activities? • Just how concerned are consumers about their digital privacy? Does “radical transparency” equate to more lax attitudes toward privacy in general? • What new technologies are likely to raise additional privacy concerns? • How can marketers best allay privacy concerns among their customers? Key Findings
Online, we have little control over all kinds of information we might prefer the publicnot to have at their fingertips—from what our home looks like (see Google Street View)to our age (see Spock.com). The Internet also makes it easy to embarrass, shame andhurt people, and this seems to be a growing phenomenon.
In the past year, acquisitions have concentrated digital data into the hands of the Webgiants. In addition, Internet service providers have started partnering with companieslike Phorm and NebuAd in order to record and analyze customer activity. Ad targetingis hot, and the race is on to see who can nail it. To calm fears about privacyimplications and to avoid regulation, many of the big players are following voluntaryguidelines and initiating consumer education efforts.
A majority of consumers are not comfortable being tracked online, although not manytake active steps to protect their privacy. This may change as more people becomebetter informed about online privacy issues.
In the U.S., the dominant attitude is that companies should self-regulate and thatconsumers in turn should be allowed to opt out; the Federal Trade Commission recentlyproposed voluntary guidelines covering behavioral targeting. Europe is much lesslaissez-faire: The prevailing standard is generally “opt in” for consumers, and the EU hasbeen researching legislative and technological solutions for enhancing digital privacy.
As privacy becomes an increasingly high-profile issue, it will be imperative formarketers and tech giants to become more transparent and to put maximum controlinto consumers’ hands, easing the “creepy” factor and enhancing choice.
PRIVACY IN THE
DIGITAL AGE
Back in 1999—in digital-evolution terms, a couple of months after Google launched—
Sun Microsystems CEO Scott McNealy was asked whether a new Sun technology
would have privacy safeguards. “You have zero privacy anyway—get over it,” he
famously snapped back.
The Millennial generation has gotten over it and then Citizens of modern societies live in a world of digital some, embracing the ethos of radical transparency— data—many of the details of our lives (mundane and ditching the locked diary of yore for blogs or Bebo juicy alike) are contained within our text messages, profiles that document every detail of their lives. By our e-mail, our online footprints; they are hinted at in extension, many of today’s twentysomethings don’t the Web searches that Google and others archive, mind being watched by marketers (a recent Harris and listed in public records available online; every poll found that almost half of American Millennials time we use a credit card or a store loyalty card we are comfortable with being tracked online for ad- reveal where we are and who we are; a growing web targeting purposes, compared with a third of Baby of surveillance cameras captures us on digital video, Boomers). But cautious consumers, watchdog groups and our homes may be seen on Google Street View; and governing bodies are raising alarms that new radio frequency ID (RFID) tags embedded in technologies could open the digital doors to a Big everything from library books to passports can also “If George Orwell had lived in the Internet age, he could “It is virtually impossible to go through life in a have painted a grim picture of how Web monitoring Western democracy without leaving an information could be used to promote authoritarianism,” warned trail behind,” note Southampton University The New York Times’ Adam Cohen in a recent opinion professors Kieron O’Hara and Nigel Shadbolt in their column. The Economist sounded a similar note last recent book, The Spy in the Coffee Machine: (The September: “These days, data about people’s whereabouts, purchases, behaviour and personal livesare gathered, stored and shared on a scale that no Sure, the fact that all this personal data is stored, dictator of the old school ever thought possible.” sorted and possibly scrutinized by authorities andbig corporations could put us on a dark, Orwellian The most apt analogy is not Big Brother but, as New path, but there’s also a major upside to these York University journalism professor Adam L.
technologies. They can be empowering, time-saving, Penenberg writes in MediaPost, “a series of little indispensable to 21st-century life. GPS-equipped brothers—your Googles, DoubleClicks and ISPs; the mobile phones allow people to be quickly found in credit-rating agencies; social networks like MySpace emergencies; RFID tags could, for example, be and Facebook; and marketers who want to know embedded in guns to make them trackable, or in refrigerators to warn caretakers when shut-ins arelow on food; and, of course, the ability to track As technology gets more powerful and more online activity and target ads accordingly has helped sophisticated—along with the ways in which to foster a Web filled with free content.
consumers and marketers are using the toolsavailable to them—the issue of digital privacy is fast In the academic world, the field of “reality mining”— studying human behavior by analyzing patterns in PRIVACY IN THE
DIGITAL AGE
the digital record transmitted by mobile phones and data mining. One of the primary goals is behavioral other portable devices—has potential applications targeting—directing communications at people based that range from better managing traffic systems to on their consumer profile—a practice that is rising up halting the spread of lethal viruses like SARS.
the radar of both wary consumers and regulators.
“Suddenly we have the ability to know what ishappening with the mass of humanity and adapt This white paper describes the digital dossiers that society to accommodate the trends we can detect, search engines, ISPs and Web giants like AOL and and make society work better,” MIT professor Sandy Microsoft are compiling, as well as recent efforts to Pentland told BusinessWeek recently. A current MIT regulate these activities. It also explores just how project is using reality mining to explore the concerned consumers really are about their digital dynamics of individual and group behavior.
privacy and considers two evolving technologies thatare stirring new privacy fears. First, a look at how Outside of academia, a range of marketers, tech startups, our digital footprints are expanding, slowly changing Web portals and others are learning how to leverage FOLLOWING YOUR
DIGITAL FOOTPRINT
In the recent past, it’s become clear that embracing radical transparency can have
radical consequences, and not in a good way. (Earlier this year, for example, the mayor
of a small town in Oregon was voted out of office after a photo of her posing in
underwear on MySpace came to public notice.) It’s also becoming increasingly clear
that in a world of easy digital dissemination, we don’t have much control over
compromising information, as well as all kinds of stuff we’d prefer the general public
not to know, from what our home looks like to how much money we make.
Hong Kong pop star Edison Chen and his many The college gossip site Juicy Campus, which launched conquests learned this the hard way. Chen had a in 2007, has stirred up controversy across American trove of X-rated photos of himself and various well- campuses by allowing anyone to post anonymous known actresses and singers on his laptop; when he gossip about fellow students—“a dorm bathroom wall took the machine in for repair, the photos were writ large,” as The New York Times puts it. And downloaded, and in early 2008, someone started Newsweek reports that “Already dozens of Web sites rolling them out online—setting off a scandal that exist solely to help those who would shame others.” consumed China and put the careers of Chen and Among them are sites devoted to slamming former love interests (e.g., neverdateher.com) and bad neighbors(rottenneighbor.com, which incorporates Google The Web is incredibly efficient at making once-private Maps to show exactly where the offending folks live); data instantly available to the world (at least the sites such as hollabackNYC.com encourage people to plugged-in world), and while the offending material upload camera phone photos of public bad behavior.
may be quickly taken down, people have likelyalready captured and saved it. The Internet certainly Dissing exes online has become a new way to not makes it easy to embarrass, shame and hurt people— just vent but also spew venom. The New York Times and this seems to be a growing phenomenon.
points to a YouTube video made by a bitter ex-wife PRIVACY IN THE
DIGITAL AGE
who tells the viewer that she found a stash of her 2007 in the U.S. and currently covers more than 40 of husband’s Viagra and porn (the man is named and the country’s metropolitan areas. There are many seen in photos); another woman put a link on her privacy implications: Google’s cameras have captured blog to her ex-husband’s new Match.com profile people going into porn shops, for example. In the (“I’ve definitely had to adjust to giving up my U.S., it hasn’t yet stirred up much fuss, however, privacy,” the guy told the Times).
beyond a recent lawsuit in which a Pittsburgh couplesued Google for invasion of privacy.
Online shaming can also translate as digital bullying ortaunting. A Canadian teen gained online infamy after It remains to be seen how the service will be filming himself awkwardly acting out a scene from the received in countries where people may have greater movie Star Wars with an improvised light saber; he left expectations of privacy—Google has said it intends the footage in his school’s TV studio, where it was later for Street View to become worldwide. It is soon to found by students who posted it online. It become a add several Canadian and Australian cities, and has viral hit, and the boy soon went into therapy.
agreed in both cases to blur faces and license platesdue to privacy objections.
While the teen’s family settled out of court with thestudents responsible, “Online shaming can be Most of us have Googled others, and perhaps also permanent, a digital scarlet letter that is connected checked Facebook, Flickr, Amazon wish lists or to people for life,” observed law professor LinkedIn for further info. Now a new group of Daniel Solove, author of The Future of Reputation: startups is aggregating all that information; in effect, Gossip, Rumor, and Privacy on the Internet, on they are search engines tailored to the task of people search, a one-stop shop that collects theclues people leave about their lives on the Web content that others post about us is just one component of our so-called passive digital footprint;the rest is made up of data such as records of home The goal is to type a name or e-mail into the search sales, address listings, mentions in the media or bar and get back age, location, occupation and in alumni updates, to name just a few examples.
some cases a photo and a list of the socialnetworking sites to which the person belongs. (How We’re at the mercy of whatever information the do they do it? While Facebook, LinkedIn and others government or data-collection agencies decide to generally don’t share users’ e-mail addresses with post to the Web. For example, in late April the Italian outside parties, they do offer search based on e-mail tax office posted online the name, address, income address; for sites that don’t, the people-search and tax status of every citizen, a move it said would promote transparency. Not surprisingly, thisgenerated much outcry before the country’s privacy Many of these sites are still in beta, and thus far the watchdog complained and the site was taken down.
results have been hit or miss. When they work asadvertised, it can be disconcerting when searching Much of this information has always been public but for oneself. Try it on Wink (“Find a person and get generally stayed out of sight and mind in dusty info about their school, work, phone number and government archives. Says Daniel Solove in his book more”) or on RapLeaf.com, which advises on its FAQ: The Digital Person: “Our personal information in “We encourage you to look up people’s Rapleaf public records remained private because it was a reputation before transacting, hiring, or even needle in a haystack, and usually nobody would take interacting with them.” Rapleaf also purports that it the time to try to find it. This privacy is rapidly helps people to manage their privacy by allowing disappearing as access to information is increasing.” them to edit what comes up on the site whensomeone searches for their name.
By the same token, anyone with your street addresscould take the time to drive by your home if truly “We realized that we’re in a very interesting state in curious—but Google’s Street View feature makes it the market where there’s a lot of people-related almost instantly possible to check out an address in information out there; people have their bio pages an urban area. Providing 360-degree ground-level under ‘about me,’ people have their MySpace page views of a city’s streets, the service launched in May and so on,” says Jaideep Singh, CEO of Spock.com, a PRIVACY IN THE
DIGITAL AGE
people-search engine that aims to index biographical references for their clients and get them removed information the way Google indexes Web pages. Its or at least buried. It’s far from fail-safe, however: business model is based on targeted advertising, asit is with most similar sites.
ReputationDefender’s FAQ warns that it cannotguarantee its “Destroy” results, cautioning that “We In addition to these sophisticated sites, of course, work very hard for our clients, but our job is hard.” there are the many plain old people-search databases They can’t just delete information published on other intended to supplant the White Pages. In the old days, Web sites, they can only automate the process of one could just decline to be listed in the book. Today, you can petition to have personal data removed, adifficult task given the number of database sites and Even if pages are taken down, wiping the slate clean the speed with which new listings can pop up.
is almost impossible. Google maintains an archive of Naturally, there’s a whole industry in data suppression, recent content in its cache, and the Internet Archive for both individuals and companies—businesses claims to have archived 85 billion Web pages dating like ReputationDefender, RemoveYourName.com back to 1996 (searchable through its “Wayback THE DIGITAL DOSSIER
AND BEHAVIORAL
TARGETING
“Individuals tend to forget that much of what they do online is being recorded,” says
privacy and security consultant Rob Douglas in Computerworld. “This collection of
information is all done behind the scenes; it’s not visualized when individuals are
using their computers.”
As you surf, browsers save cookies on your computer— the ad delivery company Atlas) and AOL acquired user-specific pieces of information that Web servers Tacoda, which provides behavioral targeting will later access to remember your user name or what technology. In April Yahoo unveiled Amp, an ad- was in your shopping cart, for example. Cookies track publishing platform that uses technology gained what you do on a specific site and can also log what through previous acquisitions; the company noted you do elsewhere. Google and others can couple the that Amp will “provide a suite of tools that easily information they get from cookies and browsers allows precise geographic, demographic and interest- (which may point to a workplace or location, and in based targeting across a vast network.” some cases reveal your name and e-mail address)with the searches you perform.
Targeting is hot, and the race is on to see who cannail it. “Behavioral targeting” is the practice of using In the past year, acquisitions have concentrated this data collected online to target ads to the right Web digital data into the hands of the major Web players, surfers—a Boomer woman is far more likely to see which had been seeking to combine the information Botox promotions than Grand Theft Auto banners, for they collect with the data about user behavior that example. “Once personal data becomes currency,” ad networks gather. Google completed its acquisition Debra Goldman sagely predicted in a 1999 Adweek of ad sales management firm DoubleClick in March, column, “all the best privileges and perks will go to and in 2007 Microsoft bought aQuantive (which owns PRIVACY IN THE
DIGITAL AGE
Potentially, these data collections—or digital dossiers, At the same time that the major Web players are as they’re often called—could reveal your political ramping up their targeting technologies, Internet preferences, sexual preferences, underwear service providers are getting into the act as new preferences. Companies say they take pains to ensure technologies present the possibility of an additional that targeting data is not linked with personally revenue stream. A crop of companies including Phorm, identifiable information. Privacy advocates worry, NebuAd, Front Porch and Adzilla has developed however, about the implications of these data hardware that, once installed on the ISP networks, archives. For example, the government can subpoena record and analyze users’ activity—basically tracking information or the information could be lost or stolen.
every click they make. ISP-level tracking may well setoff what New York Times technology blogger Saul Users can delete their cookies or block them Hansell is calling “the mother of all privacy battles.” altogether, but since cookies were designed to makeWeb surfing easier and more seamless, going Explains NebuAd chairman and CEO Robert Dykes, without them makes it more (if not very) difficult.
former chief financial officer at Symantec: “While There are also ways to surf anonymously, with portals such as Yahoo may collect information on a software like Anonymizer Anonymous Surfing, via fraction of user surfing behavior, Web-wide sites like the-cloak.com and with the Firefox browser behavioral advertising companies are able to observe extension TrackMeNot. Declare TrackMeNot’s creators, Daniel C. Howe and Helen Nissenbaum:“Because the Web has grown into such a crucial The big question is whether the information repository of information and our search behaviors collected is personally identifiable. Phorm and others profoundly reflect who we are, what we care about, argue that it’s not—Phorm doesn’t store an IP and how we live our lives, there is reason to feel address or browsing history but rather sets a cookie they should be off-limits to arbitrary surveillance.” on a user’s browser that gets refined as dataaccumulates over time. Phorm and NebuAd both say As targeting becomes more high-profile, its practitioners they don’t keep tabs on visits to sites related to are hoping to stem such sentiments. In recent months sensitive topics (health, sex, etc.), and they don’t AOL has run an online campaign to educate consumers look at e-mails, banking sessions or social about behavioral targeting. The campaign explains networking posts. The companies are less interested cookies and targeting by way of an animated penguin in individuals than in audience segments.
who visits AnchovyGourmet.com, then later sees fish-themed ads when he visits another site. The final In fact, the companies argue that they offer greater message allows viewers to click for more info about privacy protection than existing means of behavioral online advertising and privacy choices. In mid-April, targeting. Their hardware is programmed to look only however, AOL’s Jules Polonetsky noted at a conference at behavior that will slot the user into a consumer that only about 1 percent of users had clicked through profile, and once a profile has been created, Web on a banner ad leading to the campaign.
surfing history is said to be discarded—this thenadds up to less information stored for less time than Google is taking a multimedia approach to a range of privacy issues—last fall it set up a “Google PrivacyChannel” on YouTube that offers two dozen videos “This is the holy grail for advertisers—privacy- explaining the company’s privacy policy (including friendly but targeted,” declares Marc Burgess, the French, German and Spanish versions) and everything head of technology at Phorm, a company with offices from Street View to unlisting phone numbers.
Meanwhile, the search engine Ask.com, which has It’s certainly an appealing proposition for marketers.
just a 5 percent share of the U.S. market, introduced Dykes says these companies can “define more a privacy feature last December intended to meaningful audience segments” than other Web differentiate the service from competitors. AskEraser, players. And user profiles can be developed more which is a button on the home page, can be turned quickly, he claims, allowing advertisers to know what on or off with a click and allows people to conduct the consumer is interested in right now. (The business model has participating Web sites host the PRIVACY IN THE
DIGITAL AGE
relevant ads while ISPs get a percentage of the ad have slipped in under the radar—customers are sales, as the middleman in the transaction.) notified but often within the small print of customerservice agreements.
The challenge is to persuade consumers that thetechnology is privacy friendly, and in the U.K., that has When Charter Communications, a large cable operator, been proving difficult. Phorm’s plans to operate in the tried a more transparent approach earlier this year, it country (its first anywhere) were greeted with protest encountered significant obstacles. After Charter sent earlier this year, with blogs such as BadPhorm and letters to selected high-speed Internet customers Dephormation urging boycotts of the ISPs looking to informing them that it planned to test NebuAd, partner with the company. In March, Web pioneer Sir customers complained and two congressmen urged Tim Berners-Lee told BBC News he would switch his Charter to abandon the plan. It’s currently on hold.
ISP if it started using a tracking system such as Phorm.
It remains to be seen whether Charter customers Currently, BT Broadband is expected to start a trial in react with anywhere near the fury that met Phorm in which customers must give consent before they are the U.K. and whether Phorm’s British reception proves tracked; Carphone Warehouse had said it will also to be a sign of widespread consumer and media use an opt-in system. The country’s other major ISP, wariness. If ISP tracking rises up the media radar in the Virgin Media, was assessing the technology.
U.S., will Americans care enough to opt out? Phorm issaid to have talked to ISPs around the globe, and its In the U.S., there have been few alarmist headlines adoption depends in large part on how Internet users thus far, even though an estimated 100,000 worldwide regard the privacy implications.
Americans are tracked by such services. A recentreport by two public interest groups named five Ultimately, despite the assurances of privacy protection, companies that use the services of NebuAd, a the gut-level question remains that posed by The company similar to Phorm. (NebuAd itself won’t say New York Times’ Hansell: “How comfortable are we in how many or which ISPs it works with.) The lack of allowing private companies to snoop on us so long fuss is largely due to the fact that these companies as they promise to forget all the juicy bits?” GIVE A DAMN?
Whether Phorm’s rocky debut in the U.K. was due to cultural factors or just a perfect
storm of other elements is hard to say (unlike NebuAd, Phorm is publicly traded and,
in an old incarnation, once provided spyware-type applications). But at least some
suggest it’s the former. “Americans are used to having their personal data bought and
sold in a way that is entirely unlawful within Europe,” Phorm critic Richard Clayton of
the Foundation for Information Policy Research told the Associated Press in April.
Clearly, privacy is a concept that varies widely by Notions about privacy have also changed in the culture. For example, while Italians were largely recent past, a result of factors ranging from the furious about having their tax records posted online, advent of radical transparency to greater acceptance Norwegians have been accustomed to seeing tax data of government and employee monitoring in the wake posted on the Web since 2002 (before that, paper of 9/11 and corporate scandals such as Enron. In records had been open for more than a century).
1994, 65 percent of Americans who participated in a PRIVACY IN THE
DIGITAL AGE
Harris Interactive phone survey said it was they say they do. … But most aren’t concerned “extremely important” that they not be monitored at work; in a Pew Internet & American Life surveyconducted in late 2006, just 28 percent said it was What if it were easier to do something about it? A “very important” they not be monitored.
large minority of respondents in the TRUSTe survey (42percent) said they would sign up for a “do not track” Less dramatically, 49 percent of adults in the ’94 type of online registry—an idea that U.S. privacy survey felt it was “extremely important” that people advocates are pushing—even if that means seeing in social and work settings not ask highly personal more ads that are less relevant to their interests.
questions; that percentage slipped to 42 percent inthe 2006 Pew survey.
When it comes to concern about online footprints, aPew Internet & American Life survey conducted in late Most of the research into attitudes toward online 2006 divides Internet users into four points of view: privacy and behavioral tracking has been done in the • “Unfazed and inactive,” the largest group at
U.S., and it seems to show that not surprisingly, older 43 percent of respondents, don’t worry about generations are more protective of their online what’s out there and take no steps to limit privacy. A Harris Interactive survey conducted in March asked respondents whether they were • “Worried by the wayside,” about one- fifth of
comfortable with being tracked online for the purpose Internet users, have some concerns but take of targeted ads; the question noted that services like free e-mail and search are made possible by onlineadvertising. Younger respondents were more • “Confident creatives,” the smallest group,
actively upload content but take some steps amenable, although fewer than half of Millennials and Gen-Xers said they would be comfortable (49 percentand 45 percent, respectively). Only about one-third of • The “concerned and careful,” roughly one-
Boomers (34 percent) and respondents 63-plus (31 fifth of the U.S. Internet population, takeproactive measures to limit their footprint.
percent) said they would be comfortable.
Overall, 59 percent in the 1994 Harris survey said Privacy advocates argue that consumers have they were not comfortable with Web tracking. A remained relatively blasé about Internet privacy issues study of American adults conducted in February by only because they’re in the dark about just how much TNS on behalf of consumer privacy organization data gathering is done. Online tracking by marketers, TRUSTe echoed the Harris results: 57 percent said said the Center for Digital Democracy’s Jeffrey they were not comfortable with advertisers using Chester at a recent privacy forum, is “a secret for the their browsing history to serve relevant ads, even if vast majority of people here in the United States, Europe and elsewhere.” Interactive online advertising,he says, is “a virtually invisible, stealth system.” With a solid majority uncomfortable with tracking inthis survey and similar ones, it’s clear that radical In addition, Web site privacy policies don’t exactly make transparency does not equate to lax attitudes toward for zippy reading, so few people are well-informed privacy in general. “We worry about cookies despite about what kind of privacy they can expect. Newsweek many of us voluntarily becoming open books via reports that when a 2006 study at Carnegie Mellon sites like MySpace, Facebook and LinkedIn, which are University asked Facebook users about the site’s designed to share personal information that until privacy policy, 70 percent of answers were incorrect.
recently would have been considered confidential,” And more than half of Facebook users who used the writes L. Gordon Crovitz, former publisher of The default privacy settings vastly underestimated how Wall Street Journal, in a May issue of the newspaper.
many people could view at least some portion oftheir profile, figuring it was somewhere in the tens of Still, expressing worry and discomfort is a long way thousands or fewer, while it was actually in the millions.
from taking action. “After almost a decade ofexploring the issue of privacy, I’ve come to the Also, according to the Pew survey, fewer than half of realization that most Americans simply don’t care,” Americans have checked out their online footprint wrote Adam Penenberg in MediaPost recently. “Sure, (47 percent)—although this is way up from 22 PRIVACY IN THE
DIGITAL AGE
percent in a 2002 survey. Almost three-quarters of like seeing their newly single status, for example, those who have searched for their own name said broadcast to their network—but today most consider they’d done so just once or twice; one in five said it an integral part of the site. Last November, however, they were surprised by how much information they Facebook made a now-infamous misstep into the privacy red zone when it introduced Beacon, whichreports back to a user’s network the purchases that he Thus far, Facebook has served as a bellwether of sorts or she makes on a few dozen participating Web sites.
when it comes to privacy boundaries. Its Newsfeed Political advocacy group Moveon.org led a revolt, and feature initially ruffled feathers—many members didn’t Facebook backed off, increasing opt-in provisions.
REGULATORS IN THE
COOKIE JAR
Writing about the widespread tendency to see “something potentially creepy” in the
use of cookies online, L. Gordon Crovitz warns in The Wall Street Journal: “Unless people
can be reassured, there is a real risk that someday soon we’ll find the untested hands of
regulators in the cookie jar.” The anti-regulation argument is that “if politicians restrict
it unthinkingly, advertising relevance will diminish, and spam will have a renaissance,”
as Interactive Advertising Bureau president Randall Rothenberg told Crovitz.
There’s little evidence to support their fears in the object to behavioral targeting, similar to the Do Not U.S., however, where the Federal Trade Commission Call list maintained by the FTC. The coalition also recently proposed self-regulation guidelines for wants Internet ads to disclose whether they are behavioral targeting. The U.S. has almost no national using behavioral tracking and companies to show laws governing what information businesses can consumers the profiles they are building about them, collect about people; despite the best efforts of advocacy groups, the dominant attitude is thatcompanies should voluntarily comply with privacy When the FTC issued its proposed privacy principles late last year, the commission emphasized that targeting provides benefits to consumers (in terms offree content and more relevant advertising) but noted Europe is much less laissez-faire: The EU has been that “this practice is largely invisible and unknown to researching policy options to enhance privacy and consumers.” A period for public comment ended in recently kicked off a research effort to develop mid-April, and formal guidelines may follow.
better ways for people to control digital privacy overtheir lifetime. While the prevailing standard in the EU The principles include allowing consumers to opt out is generally “opt in” (consumers give consent before of such advertising, getting consumers’ consent any privacy-compromising activities take place), in before targeting ads based on “sensitive” data (e.g., the U.S. it’s more “opt out” (the activity is automatic, pertaining to health conditions or sexual orientation), but people can refuse participation if they choose).
disclosing to users how their information will beused, taking steps to safeguard user information and Last fall, as the U.S. Federal Trade Commission was not sharing personally identifiable data without a considering the issue of behavioral targeting, a user’s consent. It doesn’t specify how much time coalition of nine privacy groups petitioned the U.S.
companies can keep the data they collect—a major government to start a do-not-track list for those who issue in the EU—only advising that data be held “as PRIVACY IN THE
10 DIGITAL AGE
long as is necessary to fulfill a legitimate business or Barton is questioning Google about its privacy law enforcement need.” Disclosure about behavioral policies in the wake of the DoubleClick acquisition.
advertising must take the form of “a clear, concise, consumer-friendly, and prominent statement” that scheduled a hearing on the privacy implications of makes consumers aware their activities are being tracked and makes clear they can opt out.
Notably, the Harris poll that asked respondents how concerned than American authorities about privacy comfortable they are being tracked online also asked issues, especially when it comes to data retention how comfortable they would be if Web sites followed by search engines. In April, the Article 29 Working four basic privacy/security protocols that were based Party, which advises the EU on privacy issues, issued on the FTC’s proposals; this time, fewer than half (45 a recommendation that search engines discard percent) said they would not be comfortable, a drop personal search data after a maximum of six of 14 points from the original question.
months (or make them completely anonymous) andallow consumers to see the data collected about Some of the FTC’s proposals are currently followed by them. It also recommended that search engines be members of the Network Advertising Initiative, which required to link to their privacy policies on their counts about a dozen major U.S.-based ad networks home page (which Google does not do) and with among its members. In April, the NAI proposed several updates to its self-regulatory guidelines, includingbanning behavioral targeting at users inferred to be 13 The EU is expected to follow the commission’s and under; it also compiled a list of searches that guidance when drafting rules covering online privacy.
companies should not track, pertaining to health (such If it does, it is likely that Google would have to as HIV/AIDS status, cancer status and psychiatric implement the changes system wide, not just for conditions) and other very personal issues (such as European users. Currently, Google and Microsoft hold sexual behavior and orientation). The NAI Web site on to the data for up to 18 months (recently reduced allows consumers to opt out of behavioral advertising from 24 to placate privacy advocates); Yahoo keeps The problem that privacy advocates have with opt- Seeking solutions to privacy protection on the tech out is that it almost always requires work and some end as well, the EU is providing €10 million ($15.7 smarts. “Only if consumers are strongly interested, million) to help fund a three-year initiative led by extremely literate, well-informed and highly skilled IBM’s Zurich Research Laboratory that’s seeking can they negotiate the opaque, inconsistent morass ways of enhancing the security of personal data. The of opt-out procedures,” noted a brief filed by the project, which kicked off in March, aims to create an Consumer Federation of America in response to the Identity Management System that would give the user “an overview of which personal data he or sheuses, when, where and how” and allow the person Still, opt-out itself is a fairly recent concession, to define default privacy settings and preferences where it exists at all; for instance, Microsoft began for a variety of applications, including social offering an opt-out for targeted ads in mid-2007.
networks and virtual communities. A longer-term (Microsoft also allows users to opt in if they want goal is to find ways to maintain lifelong control over the company to combine personally identifiable data with data on Web activities; the advantage—likelydubious to most—would be discount offers.) This will be no easy task: “Resolving these issuesrequires substantial progress in many underlying There are a few signs that digital privacy may technologies,” notes the home page for the PrimeLife become a bigger regulatory issue in the U.S.
project (short for Privacy and Identity Management in Europe for Life). PrimeLife’s multidisciplinary Republican Joe Barton, who together founded the consortium includes partners from several European Congressional Privacy Caucus, successfully put academic and research institutions as well as Brown pressure on Charter to freeze its NebuAd plans.
PRIVACY IN THE
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PRIVACY’S NEXT
FRONTIERS
Consumers generate digital data well beyond their desktops and laptops, and fast-
evolving technologies, such as location-trackers on mobile devices, appear likely to
become new fronts in the privacy skirmish between consumers, marketers and regulators.
Wireless carriers could well be caught in the center Loopt is a California social-mapping company (led by a of the crossfire. Thus far, most have done little with 22-year-old, naturally) that relies on GPS technology, their call data, partly for fear of a privacy backlash which is required by law in all new American phones.
and partly because lucrative opportunities are only U.S. carrier Sprint Nextel says it has signed up now arising. With the advent of GPS-equipped hundreds of thousands of users since it started offering phones, they have begun partnering with marketers Loopt to subscribers in July 2007. Verizon Wireless that want to target people based on location (as well began offering Loopt this past June. And Loopt will also as, in some cases, user profiles generated from be available as an app for the latest iPhone.
calling patterns). Measurement services like NielsenMobile have recently begun working with carriers In the U.S., Helio, a mobile virtual-network operator, and manufacturers to install meters in smartphones offers a similar feature; AT&T has said it plans to (participants get paid nominal amounts if they opt offer such a service. A Yahoo service that combines in), generating “a comprehensive array of metrics on location tracking with instant messaging will soon be actual consumer behavior,” according to Nielsen.
As more consumers adopt smartphones—using them Sniff is a service that works in conjunction with to write e-mail, shop online, etc.—the carriers and Facebook (Sniff stands for Social Network Integrated third-party partners will have access to a well of Friend Finder) to allow networks of people to find valuable data that marketers would likely pay each other, with users charged by the “sniff.” It launched in Sweden (where Sniff claims more than80,000 users) and Denmark, and debuted in the U.K.
Meanwhile, new location-tracking services for mobile in June; there are plans to roll out in the U.S., Canada phone users are opening up a range of possibilities for and France in the coming months. Sniff, which can both users and marketers. “Advertisers are eager to be accessed from Facebook or mobile phone, seize on the popularity of location-based services that doesn’t rely on GPS but rather location information allow phone subscribers to map their whereabouts and get localized content,” reported The Chicago Tribune inApril. Thus far the ideas stick to opt-in systems for A Japanese wireless carrier targets parents with consumers rather than unsolicited messages, the GPS-enabled “Kids’ Phones.” And GeoSolutions BV in newspaper notes—people could seek out local Amsterdam plans to make a Loopt-like feature promotions by providing a postal code, for example.
available through a Chinese wireless carrier in timefor the Beijing Olympics; currently it offers a One of the first applications on the market is the downloadable application that allows users to track social-mapping service, allowing people to track where their friends are more or less in real time viaa map on their mobile screen. It’s radical In the U.S., the companies have moved cautiously, transparency in motion, and aimed squarely at the wary about a privacy backlash and abuses of the Millennial generation. Go much beyond this market system by marketers or criminals. “When it gets to and not many people are likely to relish the thought privacy, that’s quite frankly an area where we can’t of their network knowing where they are at all times.
afford to make any mistakes,” Ryan Hughes, a vice PRIVACY IN THE
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president at Verizon Wireless, said in an interview in officials as well as advocacy groups, although there’s The Wall Street Journal in March.
no sign yet of regulations that would cover locationtracking. Eager to ensure that this remains the case, Loopt subscribers can see only friends in their network, a trade group for wireless carriers, CTIA-The Wireless and they can turn off tracking for specific friends or Association, introduced privacy standards for for all contacts. To sign up, customers must scroll through pages of disclaimers and privacy notices. Sniffassures that only those who consent will be tracked, Regulation is likely to be instituted in at least some that users can specify which specific friends can “sniff” parts of the world, however, given the issues that can them, and that users can make themselves invisible to arise—for example, will companies be required to turn the network. It sends multiple confirmation messages over location information to authorities looking for to new users to remind them they have joined the suspects? And at least one U.S. Congressman is tuned network and what their permission levels are.
in to the topic of location tracking: “There has to be a Loopt has a privacy officer, who is discussing the national debate about what the privacy implications company’s privacy policies with U.S. government are,” Edward J. Markey told The Wall Street Journal. RFID TECHNOLOGY
AND THE PRIVACY
Radio frequency identification (RFID) technology, which combines computer chips
with tiny radio antennas that send information back to databases, has until now mainly
served to help retailers track inventory. As the price per tag drops, the expectation is
that they will get embedded in an array of consumer products, replacing the barcode
and allowing retailers and police to track items beyond the store. The tags will likely be
embedded in “smart homes” as well: A refrigerator could warn its owner that milk is
needed, a microwave could heat a frozen meal without instruction.
Analysts estimate that within the decade, the cost kitchens and bedrooms—anytime of the day or per tag could drop below one U.S. cent, making it night,” says FTI Consulting’s Mark Rasch, former economically feasible for manufacturers to tag almost head of the U.S. Justice Department’s computer- everything. The implications: “Once a tagged item is crime unit. And, he told the Associated Press, the associated with a particular individual, personally data collected will be “used in unintended ways by identifiable information can be obtained and then third parties” such as marketers, private aggregated to develop a profile,” according to a 2005 U.S. Government Accountability Office report. (Unlikebarcodes, RFID tags each carry unique numbers.) Indeed, for marketers the possibilities are intriguing.
An RFID-equipped fridge, for example, could send For privacy advocates, the possibilities are signals to the television so that its owners see frightening: Unbeknownst to consumers, companies commercials for foods or categories they prefer. In could “rifle through people’s pockets, purses, public places, electronic trackers will likely be able suitcases, briefcases, luggage—and possibly their to read tags embedded in people’s clothing and PRIVACY IN THE
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accessories and display customized ads or coupons are inside a paper tag that customers or cashiers The Associated Press reports that IBM got patent Tags are also being incorporated into mobile phones, approval in 2006 for what it termed “Identification allowing people to pay for products with their phones, and tracking of persons using RFID-tagged items.” which they link to a bank account or credit card. In One possible use outlined is to collect data about a Seoul, McDonald’s has been trying out a system in person in order “to monitor the movement of the which consumers order and pay via touch-pad menus person through the store or other areas.” Information equipped with RFID readers that link to mobile phones.
from RFID tags would be combined with a store’s The EU has been out in front in efforts to put privacy sales records to determine identity. Other guidelines in place before the tags proliferate. In corporations have received patents for similar February, the European Commission issued a systems or have filed patent applications, including proposed code of conduct for companies that use American Express and Procter & Gamble.
RFID tags; the principal requirement is thatconsumers opt in to the technology or chips must be The tags are already in use in some library books, deactivated after items are purchased. Once the EC’s passports, employer badges and loyalty cards. And proposals are finalized, they serve as a guideline for they are embedded in some consumer products; for EU members to enact their own regulations.
example, Pfizer puts tags in Viagra bottles in the U.S.
as an anti-counterfeiting measure. An RFID pilot Not surprisingly, an industry trade group is project kicked off at a department store in Essen, advocating for an opt-out rather than opt-in Germany, last year, with thousands of garments now approach. Meanwhile an EU-funded pilot program, tagged; the applications are creative—a man trying the EuroPriSe Project, is investigating ways to create on a dress shirt may see tips on what to pair with it a “privacy seal of approval” that would mimic the pop up on a screen in his changing room. (The chips way organic or fair trade products are certified.
WHAT IT MEANS
In 2006, the U.K.’s Surveillance Studies Network produced “A Report on the
Surveillance Society” for the country’s Information Commissioner. Looking 10 years
into the future, the authors paint a picture of malls where intelligent billboards target
consumers based on the RFID tags in their clothing. Consumers’ handheld devices
transmit marketing messages tailored to the type of shopping they’re doing. Some will
pay for goods via a chip implanted in their arm; the incentive to do so will be store
discounts and access to VIP lounges. Anti-capitalist activists, meanwhile, will plaster
aluminum sheeting and tiny microwave transmitters at store entrances, disrupting the
wireless signals that connect to mobile devices.
Are we really less than a decade away from this Then again, people may well grow more protective of scenario? The fact is, this might be the tip of the their electronic privacy. Beyond the issues outlined iceberg in terms of our future privacy concessions.
here—mostly areas in which the interests of “If the short-term benefits of technology are good marketers intersect with privacy concerns—other enough, we tend not to question them,” observe factors are likely to ratchet up anxiety, notably O’Hara and Shadbolt in The Spy in the Coffee Machine.
increased government snooping in a post-9/11 world PRIVACY IN THE
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and the fast-evolving sophistication of identity home the benefits of data collection. AOL’s campaign is thieves. And if personal data is seriously a start, but it needs to find better ways to attract notice.
compromised in one too many high-profile cases,wariness is sure to become more widespread.
“We have a solid indication that consumers want us tofind a way to get them the advertising that is relevant “With the collection and centralisation of such vast to them,” says Fran Maier, executive director of U.S.
amounts of data, the potential for abuse is huge and the consumer privacy organization TRUSTe. “Behavioral safeguards paltry,” noted The Economist last September, targeting is one of the most promising methods, but at referring to all forms of electronic surveillance and data the very least, it has to be made more transparent, collection. Just two months later, in fact, the British provide choices and deliver real value.” government lost two CDs containing unencryptedpersonal and financial data on 25 million citizens.
Providing choices will be essential, and today choiceis evolving well beyond opt in or opt out toward Holding onto massive amounts of information about “granular control”—allowing users to fine-tune their what people are doing online is a “ticking privacy level of openness. For instance, Facebook recently time bomb,” alleges Marc Rotenberg of the Electronic refined its privacy controls to the point where Privacy Information Center in Washington, D.C.
members can specify whether second- or third-degree contacts can see their profile and who in They may be passive about it, but consumers are their network can view content like photographs (in already plenty concerned about privacy. In an opinion other words, what happens in Vegas stays in Vegas— piece in The Wall Street Journal, L. Gordon Crovitz notes or at least, among the buddies who were there with one reason that collecting information online seems to you). Navigating granular controls will become worry people more than similar offline activity: “Scholar second nature to Millennials and Gen-Xers.
Joseph Turow has identified a ‘culture of suspicion.’People don’t understand how the Web works, so fear Providing options ties into an important factor, one they are being spied on and manipulated.” that parents know well: “Citizens will adopt technologywhen it is both optional and beneficial to them,” notes Or perhaps people understand all too well—after all, the The Economist, “but resist it strenuously when it is outside world has never had such power to know what compulsory, no matter how sensible it may seem.” they’re doing and thinking. “Tracking on the Internet islike being constantly followed by a private investigator The authors of the “Surveillance Society” report also with a dynamic billboard,” wrote one poster on a New foresee a future in which the more fortunate York Times tech blog. “Only worse, because most people subscribe to personal information management probably do more private things on the Internet than services that monitor their “data shadow.” Until then, they do in their real world neighborhood.” however, people will need to do it themselves if theyare to maintain any control over their reputation, Such sentiments will make it imperative for even as those data shadows keep expanding. And for marketers and tech giants to become transparent now, a sort of preemptive confessional may become and to put maximum control into consumers’ standard for politicians who figure that it’s better hands—ease the “creepy” factor and enhance choice.
than waiting for digital evidence to bubble up and At a social media conference in Los Angeles in April, spread. After New York Governor Eliot Spitzer a Yahoo exec advocated allowing users to see resigned amid a scandal involving high-priced behind the scenes of behavioral targeting: “I could hookers, his successor, David A. Paterson, promptly envision an icon that appears when you see an ad, announced that both he and his wife had engaged in and if you were to click through that icon, you would affairs during a rough patch in their marriage.
see the data we’re leveraging,” said Jeff Weiner, head Of course, the wiser path would be to act more of Yahoo’s Network division. He told the crowd: “It’s ethically in the first place, knowing how easily going to be very difficult going forward as an indiscretions could come to light. Not too likely, but industry to limit users’ [access to information].” there is a chance we’ll become more forgiving, notes The first step is to demystify the technology (for Adam Penenberg: “We are all vulnerable to having example, explaining how cookies make Web surfing our secrets shared, and there is little point in more seamless), help consumers understand the pretending to be holier than thou.” The upside of tradeoffs they’re making (exchanging personal data for seeing our privacy eroded, he says, is “a more the ability to access free content, and so on) and bring PRIVACY IN THE
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