Privacy — March 30, 2013 at 4:56 pm

The coming privacy backlash

Cars with mounted cameras collect information for Google
Cars with mounted cameras collect information for Google

Watch for a major privacy backlash. It is coming.

People are fed up with tracking, recording and surveillance of their every day activities. Cameras pop up where you least expect – traffic lights, airports, elevators, tollway booths, retail counters.

Web sites track clicks and views. Add eye movements to the list. Samsung’s new Galaxy S IV Smartphone will track a user’s eyes to determine where to scroll. What’s next? Smell and taste. Scientists are working on it.

The desire to monetize all this data means a collision is ahead. There is a lot of money to be made. But consumers fear it will come at their expense.

Who owns the data being collected? What rights do consumers have? These are questions that will take years to sort out.

Right now, the public has little or no understanding of what’s happening. Mountains of data being are being collected and they are the product. Most would be aghast at how their personal lives are being bought, sold and traded. The laws governing both the collection of personal data and its use are fuzzy, giving companies a lot of wiggle room. But that doesn’t mean a cascade of privacy lawsuits – similar to the $15 billion case filed against Facebook – aren’t coming.

Research shows consumers are increasing becoming disenchanted with companies’ online behavior. A recent Ovum’s latest Consumer Insights Survey by Ovum reveals that 68 percent of the Internet population across 11 countries would select a “do-not-track” (DNT) feature in their Internet browser if it was easily available. A study conducted by the Pew Research Center found consumers are anxious about the collection of personal information by search engines and websites.

Much of the problem stems from consumers not understanding what companies are collecting and what they plan to do with the data once it is aggregated. When consumers do learn about the practices, they don’t like it.

A Consumer Reports poll found that 71% of consumers were very concerned about online data collection, while 65% were worried about the way smartphone apps could access their personal contacts, photos, location and other data without their permission. A 2012 Los Angeles Times poll reported similar findings.

Government regulators have been slow to act, but they, too, are increasingly getting involved in the fray.

One example is Google. The search giant recently agreed to settle a lawsuit brought by 38 state attorneys general, alleging Google violated the privacy of consumers with its mobile Street View collection vehicles. Street View cars cruised city streets, picking up passwords and IP addresses as the vehicles mapped city streets.

Google said the network identification information was collected for use in future geolocation services, but that executives were unaware the payload data also was being collected. Google agreed to settle the case and pay a small fine totaling $7 million.

Facebook has been criticized for its use of personal data. In response, the company keeps rolling out changes to its privacy settings. But Facebook is under enormous pressure from Wall Street to justify its stock price. Facebook must do a better job of turning  the user data it has collected into revenue and profits. So what’s Facebook latest strategy? The New York Times reports the social bulletin board is teaming up giant data collection companies known for sorting and analyzing data gleaned from multiple sources.

Among the Facebook partners are Acxiom, Epsilon and Datalogix. Acxiom aggregates data from financial services companies, court records and federal government document. Datalogix professes to track spending habits of more than 100 million Americans while Epsilon collects retailer transaction data.

Acxiom and Datalogix are among nine companies that the Federal Trade Commission is investigating to see how they collect and use consumer data, The New York Times reported.

The European Parliament has proposed significant restrictions on the ability of free services like Google and Facebook to collect and sell customer data. Some analysts say Google and Facebook would have to significantly change their ad-supported business models if the European Union’s proposals become law.

One proposal: start charging customers for these services. The European General Data Protection Regulation states: “Consent should not provide a valid legal ground for the processing of personal data, where there is a clear imbalance between the data subject and the controller.”

It is difficult to say when similar regulations might be proposed in the United States. But companies should be mindful of these changes and how they use personal data. The Federal Trade Commission has not been shy about cracking down on false online advertising. Watch for privacy to be next.

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