Online Privacy: A Balancing Act Between Protection and the Vitality of the Internet

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One of the hottest reoccurring themes this year is about privacy and for me, I say it’s about time. I’m not one that is overly trusting with my personal information, I often decline requests at the checkout line, or online when additional information over and above what I need to do to complete a transaction is requested. There are newsletters that I would subscribe to, if all they asked of me was a name and an email address, but when the form comes back long and requires me to scroll or go to the next screen, I usually quit. The reason I feel this way is largely because either it’s unclear what the requestor intends to do with the information they are collecting or the site collecting the information is not secure (an https).

It seems that finally I am not alone in my reluctance to share information. Or perhaps Web 2.0 is mature enough, and along with it ubiquitous data collection. Whatever the reason, online privacy is one of the issues of the year, but how to protect that privacy is being hotly debated. Clearly, people feel there are right ways and wrong ways to go about privacy protection.

Earlier this month the U.S. Senate Commerce Committee held a hearing on “The State of Online Consumer Privacy.” Notes Chairman John D. (Jay) Rockefeller IV “Modern technology has connected people with the world and led to new innovations, new products and new experiences. But with these new opportunities come new risks. I want to know if the privacy protections we have in place are enough, or whether Congress needs to step in and do more.”

The tracking and targeting of Internet users has many concerned. Also on the privacy table: proposed privacy legislation from lawmakers, a compulsory Do Not Track mechanism to regulate business marketing practices, and the Obama Administration’s proposed “Privacy Bill of Rights”, meant to protect Americans from intrusive data gathering.

The Competitive Enterprise Institute (CEI) believes congress should be wary of the call to privacy of such proposals. “The opportunity to undermine online marketing—wrongly called ‘surveillance’—appeals to some, but such privacy purists have no right to call the shots for anyone but themselves and those who agree with them. The right to use information acquired through voluntary transactions is no less important than the right to decide whether to disclose information in the first place.”

Consumer groups, including Consumer Watchdog, The Center for Digital Democracy, Consumer Federation of America, Consumer Action, U.S. PIRG and the World Privacy Forum, have expressed concern that Obama’s privacy law could be dominated by industry. The group warns that “a ‘multi-stakeholder process’ to develop online privacy codes advocated today by the Obama Administration runs the risk of being dominated by industry and failing to protect consumers if it is not organized in a fair and balanced manner.”

The groups also said that any meaningful privacy legislation should direct the Federal Trade Commission to create and enforce a “Do Not Track Me” mechanism.

Clearly there’s no shortage of opinions. It’s like an intense tennis match with the ball being smashed back and forth, point to counterpoint.

This month Consumer Watchdog warned President Obama in a letter about appointing Google CEO Eric Schmidt as Commerce Secretary. “Mr. Schmidt’s views on privacy, antitrust issues, workers rights and commercial growth are inimical to the ethical customs, social mores and rules of law the American people have demanded of their leaders,” wrote Consumer Watchdog President Jamie Court and Privacy Project Director John M. Simpson. In the letter the authors note, “Reckless data mining in pursuit of profit is how Mr. Schmidt became a billionaire.”

But leaning too far toward protecting consumers, say some proponents, is also undesirable. CEI offers this warning: “rattling consumers needlessly by encouraging them to opt-out of largely beneficial information collection is an especially unwise idea in our uncertain economic climate.”

Part of the issue is there’s no consensus on how privacy, and therefore privacy protection, should be defined.

In its February open letter to Donald S. Clark, Secretary of the Federal Trade Commission Online Trust Alliance (OTA) Executive Director and President Craig Spiezle wrote, “Business accountability, data stewardship and data protection are equally important privacy issues. Any proposed privacy framework needs to address practical protection for consumer data from abuse, exploit, breach and loss without compromising security and fraud detection capabilities. Concurrently, OTA believes any changes to the regulatory landscape will also need to address the potential impact to ad-supported content services, innovation, and commerce.”

In a recent meeting with Spiezle, we talked about the need to re-define PII (personally identifiable information) and how we have to (almost) toss out our current thinking. “Right now it’s like the Wild West of data collection,” Spiezle says. “We need to consider what is appropriate, what the balance is between consumer protection and business need, examine who is collecting the data, for what purpose and who is that data being shared with.”

As a group, OTA is working to enhance consumer trust and confidence, while promoting self-regulatory best practices for businesses to ensure online commerce vitality.

At the moment, we don’t have a good handle on privacy in this amazing age of information. It seems that consumers are starting to come around to the realization that posting ones life on Facebook can come back to bite, and to not share information without thinking and asking questions first. So if step one in the battle for privacy is acknowledging we need to do something, this step seems to be agreed upon and largely taken. The next step is much trickier, as the forces that be struggle to figure out the right mix of consumer trust while maintaining innovation and flexibility.