Widespread Concerns About Privacy
In the marketplace, companies have routinely had access to better
information and better resources which has generally been leveraged against
the individual. However, until the last 50 years, the economy was based on
manufacturing and so information was an influential factor, but not a
product, in and of itself. Consequently, information gathering was a
Times have changed. The explosion of the Internet demonstrates the power and
value of information (which has garnered center stage) and has led to
frequent abuses of privacy including corporate espionage, reconnaissance,
and counterintelligence missions of consumers, competitors, and suppliers.
As the value of information continues to increase, these abuses will remain
unabated and consumers will be increasingly hostile to information requests.
In fact, surveys have shown that privacy is already a highly sensitive issue
on the Internet and a potential impediment for e-commerce.
|BCG - A BCG Consumer Survey of users who expressed concern over Web
sites monitoring their browsing habits
||GVU2 - The same survey of consumers who expressed a desire to control
use of their demographic information.
|BCG2 - The same survey of users who expressed concern about making
||TRUSTe - TRUSTe's survey of individuals who said they would be more
likely to provide information to Web sites that provided privacy
|GVU - An annual Web survey conducted by the Graphics, Visualization
and Usability Center of the Georgia Institute of Technology shows
consumers who cited privacy concerns as their primary reason for not
registering demographic information with Web sites on the
||GVU3 - Another Georgia Tech study of users who reported providing
false information at least once while registering at a web site.
These surveys suggest that individuals have strong concerns about a
company's use of personal data. This fear is well grounded. Businesses are
in business to produce profit and it is difficult to resist the temptation
to use personal data that could create additional revenue. The following
list (in part provided by John Hagel and Marc Singer in their book, Net
Worth) catalogs a few samples of privacy breaches.
- The web site GeoCities suffered a 15 percent drop in the market value
of its stock after settling charges with the Federal Trade Commission
that it had been secretly selling personal information to
marketers. GeoCities maintains that nothing illegal was done. Immoral
or unethical, perhaps, but definitely not illegal.
- Pacific Bell, either ignorant or blatantly apathetic, wanted to send
unsolicited sales pitches to customers with unlisted phone
numbers. PacBell seems to be saying you can run, but you can't hide.
- Internet behemoth America Online sold its members' phone numbers (without
consent) to a telemarketing company. In an unrelated event, AOL turned
over personal data about an individual's sexual preferences to the U.S.
Navy without the individual's consent. AOL's motto: don't ask, but we'll
- Financial services giant American Express announced plans to sell
extensive information on its cardholders to merchants. This data is
like a pile of cash sitting in the corner. Other companies are reaping
the rewards, so why can't AmEx do it, too?
- Smaller companies can get into the act, too. Blizzard Entertainment
admitted it had acquired data (again without consent) from its customers'
PCs via the Internet. How's that for interactive entertainment?
- Giant Foods (a supermarket chain) and CVS (a drugstore chain) shared
medical information with a drug marketer who sent out friendly
prescription reminders and helpful literature about new drugs. Now the
friendly and helpful mailman knows your medical history.
- GTE accidentally published 50,000 unlisted phone numbers and addresses.
However, GTE expressed its deepest apology over the incident so it
shouldn't be held legally or morally responsible for the consequences
to the personal safety of police officers and crime victims who had
this information unexpectedly divulged.
- Microsoft acknowledged that their Office software products utilized
a serial number that could be used to trace every document an individual
creates. TRUSTe, the industry watchdog that is partly financed by
Microsoft, firmly admonished Microsoft and politely asked the company
to refrain from similar behavior in the future.
- In an attempt to support e-commerce, Intel announced a plan to place
serial numbers in its Pentium chips. An enormous privacy backlash
convinced Intel to provide software that could turn this wonderful
feature off. However, a hacker demonstrated that this feature could be
remotely turned on without the user's knowledge. Perhaps the software
simply experienced a floating point error.
- In response to the Intel debacle, Sun Microsystems CEO Scott McNealy
said, "You have no privacy. Get over it." Perhaps, two hundred years ago,
Benedict Arnold had similar comments about British oppression.
Privacy, as defined by Brandeis, is not the solution. Individuals want to
share their personal data in order to benefit from personalized services,
screen out unwanted advertisements and to find out about new products
(especially from competitors) for which they have an interest. However,
individuals also want control over their personal data. Moreover, they want
to be compensated by marketers for their increasingly valuable time.