June 23, 1999

from the Friends-of-the-Revolution dept

Friends of the Revolution
28th Amendment: The Right to Privacy
by Brian Day

The Coming Storm
================
Have you ever submitted personal information to a web-site?  Do you use
myYahoo?  Do you have any idea what information web-sites have, track,
and sell about you?  The privacy question has been a hot topic ever
since Netscape implemented the browser "cookie" and developers started
hooking web-sites to databases.  Various governments have taken
different stances on the subject and the issue is far from being
resolved.

Does it seem strange that a majority of the US based Internet companies
are basing their businesses on the acquisition and sale (in direct or
indirect manners) of this information?  Does this make anyone nervous?
What can our government do to help?

East vs. West
==================
Everyone agrees that people's personal privacy should be respected and
protected, but there is a difference in opinion in how to achieve this
goal. The two sides of the argument are those who believe that
government should stay out of the picture, putting the decision in the
hands of the consumer and those that think the government should play
an active role.  As you might expect, the US is main proponent of the
hands-off policy.  Ira Magaziner (Clinton's previous Internet advisor)
suggested that industry be responsible for creating tools to make it
easy for individuals to manage and protect their personal information.
On the other hand, the European Union believes that government should
create legislation that will protect consumers from misuse of their
private information and punish companies that violate these rules.

The Domino Effect
=================
The US policy has completely failed.  Web-sites can do whatever they
want with information given to them, and they are free to track and
save your every movement.  Industry is no closer to developing a software
solution than they were 2 years ago (I'm not buying into ECML).
Especially since Firefly (the previous leader of the open profiling
standard) was gobbled up by Microsoft for a meager $34 Million a year
ago.  The current champions are a slow moving standards body (W3C) and
Microsoft (please!).  In Al Gore's recent report on privacy he made it
clear that they would give industry one last chance to get their act
together.  On the contrary, the EU has created many laws including one
which disallows companies from sending information across countries
borders.  (For example: Citibank Europe cannot send customer
information to the US for processing.)  The EU platform has recently been adopted
by Canada, and there are hints of "EU like" legislation starting to pop up
in the US at the state level. (California is proposing a law that will
not allow grocery stores to keep track of what you buy.)  So it appears
that we may be on the verge of privacy legislation.

Running with scissors?
======================
So if that is the case why are there so many new companies basing their
business model on the use of customer information?  Yahoo! has customer
profiles on 40 Million users and uses that information to deliver
customized ads as well as sell targeted products and services.  Buy.com
sells products below cost and makes up the difference through targeted
advertising and understanding consumer's buying habits.  A new company
called TiVo that has a digital VCR product records your TV watching
habits and sends them back to their central database.  Are these
companies in trouble if legislation passes?  Yes and no.

Yes - The wild west
===================
Most of these web-sites have collected information without the user's
consent and without the disclosure of its use.  They have inked deals
with partners to share customer information and have promised
advertisers access to their rich customer base.  Their computer systems
have been built from scratch on shoestring budgets and jolt cola.  If
they are required to come clean with their users and/or change some of
their business relationships it will require a lot of work that will
require a lot of money which they do not have.

No - Don't kill the cash cow
============================
Seeing how this is the case it is not likely that the US government
will carelessly create laws that will slow down the US high tech machine.
Furthermore, I believe that most consumers understand the implicit
exchange that is currently occurring (personal information for
customized services) and are not likely to stop their current Internet
behavior.  Finally, most of the information that web-sites are sharing
is in aggregate form and advertisers are only able to access consumer
information by proxy (anonymously).

What to do
==========
The danger is that in a global economy where the Internet is the global
system, the global rules are currently being set by the EU.  If the US
government continues to do nothing the rules will be dictated to us. 
It is clear that Industry is not capable of solving this problem.  It cost
too much money to develop, and ultimately they have nothing to gain.
Here are some ideas:

1. Government Funding - If the government can pay for the development
of the B2 bomber and the Alaskan pipeline, perhaps they could pay for the
development of open source software that can be used to protect
consumer's privacy on-line.

2. A Strong Policy Statement - The government should release a policy
statement describing good business practices on the Internet.  They are
starting to move in this direction, asking all web-sites to post
privacy statements describing how they use personal information.

3. Global Consensus - Government should work globally to begin forming
global standards of conduct.

4. Cautiously legislate - The government needs to demonstrate the
seriousness by cautiously creating laws to protect consumers rights.


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Friends of the Revolution
by Brian Day

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