Online Privacy

Perhaps the best known example of technology forcing the issue of privacy is the evolution of the Internet. The popularity of the Internet makes marketing and customer tracking practices easier. Even though these practices are fundamentally identical to offline practices that have been going on for years, old-fashioned fear of technology has created a privacy outrage.

One of the best examples of the clash between technology and privacy is the outrage that resulted from Double Click's practice of tracking Internet users as they traveled among different Web sites using a technology called Internet cookies. A cookie is an Internet technology that allows a Web site to place information on a user's computer and then subsequently retrieve that information when the user visits that Web site again. Since Double Click was actually serving the ads to users directly through links embedded in other Web sites, users were effectively visiting the Double Click site every time they visited any site that used Double Click's service.

If I go to a Web site that uses Double Click's ad services, my browser gets directed to Double Click's site, where it downloads an ad to display. When my browser is directed to Double Click for the first time, Double Click places a unique identification number inside a cookie on my hard drive. Double Click can then retrieve that cookie each time I visit any Web site that serves Double Click ads. By doing this, Double Click can track us as they visit different Web sites that serve Double Click ads. Double Click is able to demand more money for these ads because their network allows them to deliver the ads more effectively by sending a particular ad to customers who are more likely to respond to that type of ad. The process forms an economic arrangement that is beneficial to all participants. Consumers receive lower-priced (and often free) services because Double Click makes the ad business more profitable for everyone by delivering ads that specific consumers are more likely to respond to.

Companies have been doing this same thing for years, just not quite as efficiently as Double Click. Many top retail companies track everything from personal information to buying habits whenever and wherever possible. Mail-order catalog companies are a perfect example of this. Certain marketers have formed networks of catalog companies. Through these networks, a catalog company can agree to share information about who their customers are and what they purchase. In exchange for that information, those catalog companies receive information about customers who purchased from other catalog companies in that same network. The catalog companies are basically just sharing information about their customers with each other through a marketer. We've all ordered from a catalog and then received new catalogs from other companies the very next week. It wasn't a coincidence.

How are the catalog marketers different from Double Click? They have both created networks to share information between different companies and provide consumers access to products based on our history. But many consumers and privacy advocates were outraged at Double Click. Double Click was even the focus of FTC investigation and a number of class action law suits when they later purchased a catalog marketer to increase their information network. Everyone was upset because they were going to tie our online information with offline information about us. They weren't doing anything new or different. They were doing basically the same thing marketers have always done, only better.

We accept that a department store needs to have security cameras to help prevent theft, but we also expect them to keep our faces and actions while in their store private, and not to use them for any other purposes. Even though they make no guarantee these tapes will be kept private, many of us would be outraged if the department stores began selling these security tapes to other companies to do with as they please.

What if these department stores had face-recognition technology that allowed them to track our movements through their stores? The stores could uniquely identify our face each time we entered their store and track us as we traveled through it. They could then tie our face to other personal information. Now they know who we are, how often we come to their store, what sections we shop in the most, and what we purchased from their store. This could help them arrange their store more efficiently, so items we purchased in a single visit were closer together and easier to find. If they saw that we often looked at furniture in their store but never made any furniture purchases, they might decide to give us a coupon for 10 percent off any piece of furniture.

These stores would eventually want to share information about their customers with each other so they could find new potential customers who shop at other stores in their area. A marketer might create a network of stores in Manhattan that would share information about other customers who shopped in that area. This would be fundamentally the same as the catalog companies and the Web sites that used Double Click. Face-recognition technology isn't good enough to make this practical, but that will undoubtedly change at some point.

As consumers, we are the ones who actually give up the information to these marketers, either directly or indirectly. Sometimes we don't pay attention to what we give up or to whom, but we do know we're giving out information. For some reason, we just assume no one will track us as we browse the Internet. We tend to have certain expectations of privacy in our daily lives, regardless of where we are or what we're doing. We need to rethink our expectations. Maybe it isn't reasonable to give information to someone with no agreement covering that information, and still have any expectation of what they will or will not do with that information.

Both consumers and companies are finding an acceptable balance. Consumers felt certain practices were inappropriate, and the market reacted swiftly to eliminate, or at least limit, those practices. Companies now weigh the profitability of certain practices with the sentiments of the consumers and their desire for privacy. It's a learning process on both sides, but it seems to be progressing nicely. In the Double Click example, technology enabled consumers to give up information without realizing it. Consumers are now aware that a powerful technology exists with a detailed way of tracking us. Consumers reacted, and companies have become much more explicit about what they would do with that information. Software now gives us more control over how we browse the Internet, forcing companies to develop suitable privacy policies if they want to use cookies to track us.