Digital Big Brother Poses Threat to Consumer
Privacy
Deborah Solomon, San Francisco Chronicle Staff Writer -
Monday, July 26, 1999
It's 2001 and you're surfing the Net, looking for information on breast cancer
to help your mom, who's recently found a lump. You buy a book, check out some Web sites,
even go to a chat room on the subject. A few days later, your new employer has some bad
news: Your health coverage has been denied because of a ``pre-existing condition'' --
breast cancer.
The health plan came to that erroneous conclusion after buying information about
your habits from a marketing firm, which has been tracking your every move.
If George Orwell thought 1984 was going to be bad, he'd freak at what's coming
in the next century.
Soon, what we watch, what we read, even what we keep in our refrigerators, may
be accessible to someone other than ourselves.
That's because companies are working on ways to network our homes --linking
every appliance together and connecting them all to the Internet. High-tech companies want
to connect our TVs with our PCs, our refrigerators with the Internet and our cell phones
with our ovens.
But the futuristic ideas gaining steam in Silicon Valley worry privacy
advocates, who fear all this connectivity poses major security risks for consumers.
While privacy on the Internet has long been a concern, consumer advocates say
the sheer number of devices that will soon be hooked to the Net and the data about
consumers that will become available to companies are dangerous.
Most of the concern centers around the loss of control consumers experience once
they enter cyberspace. If everything is linked to the Net, privacy advocates say,
consumers won't be able to avoid leaving records of their personal information and won't
be able to control how companies use that data.
Consumers already leave digital footprints just by casually surfing the
Internet. A file called a ``cookie'' stores information about you each time you visit a
Web site.
But tracking our movements will get easier for companies as more elements of our
daily lives become connected to the Net.
``Once people start to observe all of your habits, particularly your reading and
viewing habits, which make up a lot of our lives, they make assumptions about you and
those assumptions are often wrong,'' said Tara Lemmey, president of the Electronic
Frontier Foundation in San Francisco. ``Privacy is about your identity. It's something you
own and other people don't. No one should have access to your personal information but
you.''
In the networked world of the future, however, information about consumers will
flow from TV set-top boxes and various appliances to huge databases that can track
customer habits. Other companies are compiling detailed lists of online spending habits
and plan to sell that information to marketers.
One new technology that has privacy advocates concerned is interactive
television, which is rich with consumer data. People will soon use set-top boxes to watch
digital TV, surf the Net and shop online. These boxes, which are actually tiny computers,
will record data, leaving a trail map of where you've been, what you've watched and what
you've bought.
With this information, companies can do targeted marketing and tailor
advertisements to your tastes. For example, if you watch the Travel Channel frequently,
you might see a lot of advertisements for trips and airlines the next time you surf the
Web. If you buy gourmet food online, you might start seeing TV ads for cooking schools and
caterers.
``Set-top boxes are processors and so they can pick up and track viewing
habits,'' said Gary Arlen, a multimedia expert with Arlen Communications in Bethesda, Md.
``It's a little like Big Brother, but integrating Web content, including advertising, with
television programming is part of the vision of what interactive TV will be.''
Companies such as Redwood City's ExciteAtHome, which provides Internet service
over cable TV lines, plan to use some data from set-top boxes for targeted marketing.
While targeted ads may not seem that big a deal, privacy groups say they're still
intrusive.
``People don't want companies collecting personal, identifiable information
about them,'' said Marc Rotenberg, executive director of the Electronic Privacy
Information Center in Washington, D.C. He said a person who buys a book on breast
cancer or watches a documentary about alcoholism probably doesn't want that information
made public.
``Sometimes people are researching issues like breast cancer, alcoholism or
depression and it's not necessarily the case that they want everyone to know that,''
Rotenberg said.
Some companies are trying to keep the data they collect private but face
challenges in a world where information flows so easily.
TiVo, a Sunnyvale startup, makes a kind of video recorder that builds a database
of what the TV is tuned to. This enables TiVo to track your viewing habits so the device
can ``learn'' your favorite programs and automatically tape them for you. The company
recently put in place a strict privacy policy that forbids releasing individual
information on what a customer watches.
``We respect people's privacy and we wanted to be proactive in telling people,
`We care about you as viewers,' '' said Lisa Varni, director of marketing for TiVo.
However, the device will still monitor what customers watch, and the company
said it may sell that information in an aggregate form -- such as for an entire ZIP code
or region.
While no individual information would be sold, advertisers may eventually get
their hands on that data anyway. That's because TiVo will soon allow customers to buy
products online. Once a consumer decides to make a purchase over the TV, TiVo is no longer
responsible for information about that customer. So if you buy a cell phone in response to
an interactive ad, the manufacturer is not legally bound to keep that information private.
But it's not just our Internet and TV habits that could be tracked in
the future.
High-tech companies have talked about building Internet-based appliances like
refrigerators that monitor food levels and communicate with the Web site of a major
grocer. When you're running low on eggs and milk, the refrigerator would contact the
grocer and order replacements.
But that information -- how often you go through items like beer and meat --
could be sold to other companies that want to sell you products or monitor your lifestyle.
If you eat a lot of eggs and steak, you could start seeing ads for cholesterol tests or,
in a worst-case scenario, your health care provider could increase your premiums in
anticipation of a heart attack.
Marketers are also compiling huge databases of online spending habits. Earlier
this year, Geocities, a ``community'' site where users could set up their own home pages,
got into trouble for secretly selling personal information about users -- such as income
and occupation -- to marketers. But other companies have similar plans.
A recent example is DoubleClick, an online advertising company which bought
Abacus Direct, a marketing research company. Together, the two companies plan to build an
online database with specific customer information, such as spending habits.
DoubleClick sells banner advertising space on a network of more than 1,500 Web
sites. When a customer shops at a site in DoubleClick's network, that information will be
coupled with Abacus's database, which tracks what customers have bought in the past.
While DoubleClick has no plans to collect any personal data itself, information
will flow between the Web sites in its network and Abacus' 1,100 merchandise catalog
companies. Privacy advocates have opposed the deal and filed a complaint with the Federal
Trade Commission, saying the merger is invasive because it uses personal information
without the consumer's consent.
``There's a really fine line between good targeting and stalking,'' said Lemmey.
She added that there's very little to prevent all this private information from falling
into the wrong hands.
``If that much information about you is in one place and you're not in control
of it, it doesn't take a lot for others to get access to it,'' she said. ``That can lead
to things like redlining.'' For example, a person who accesses information about personal
bankruptcy could be denied a loan by a banker who subscribes to a database that tracks
people's financial actions on the Web.
Or just plain old embarrassing situations could arise. For example, if a man
were to watch the Playboy Channel one night, a banner ad for a pornographic Web site could
possibly appear on his computer the next day when his daughter sits down to do her
homework. Or a wife who buys a book on divorce for a friend may have some explaining to do
when her husband starts seeing ads for divorce lawyers on their PC and in the mail.
``The freedom to think freely is really what makes society move forward. Losing
your privacy will curtail that freedom,'' Lemmey said.
But others say the loss of privacy is just the price people must pay for living
in a digital age.
``In general, I'm sort of resigned to the loss of privacy that the digital age
is forcing upon us,'' said Arlen, the multimedia expert. ``The Internet is both more
anonymous in that you're just a number and it's also less private.''
Yet people don't have to opt out of the digital society to remain private.
There's software available that can keep you anonymous when surfing the Web and privacy
advocates say people can make sure information about them is kept confidential by asking
companies about their privacy policies.
And that anonymity may come in handy in the future. Some companies are planning
to gather data from the most unlikely places.
One Japanese company, Matsushita, plans to market a "smart'' toilet.
Sensors in the bowl will analyze what you deposit and send information about it to health
care providers.
SOMEONE'S WATCHING: HOW MARKETERS MAT STALK YOU AT HOME
As everyday appliances get `'smarter`` and more able to respond to your needs,
they also may be collecting more information about your personal habits and feeding it to
marketers.
COMPUTERS
You can leave a trail in cyberspace showing what information you're interested
in, including health and finance. For example, an insurance company could see that you're
researching cancer and refuse you coverage; or a potential mortgage broker could see that
you just dropped a bundle in the stock market and turn you down.
HOME APPLIANCES
``Smart'' thermostats that adjust the temperature to suit you and refrigerators
that keep track of what you need to buy could also compile data on how much energy you
consume and how much beer you drink.
TV HABITS
With interactive TV, advertisers will know what you buy in reponse to
commercials and what you like to watch.
PERSONAL HABITS PROFILE
Once marketers have data about you, they could compile it into a personal
profile.
For example,
