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Privacy and the Internet

by Glen Emerson Morris

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Privacy is a concept most honored in America by its breach. The prevailing attitude of business (and government) is that any knowledge about anyone in the public is, by definition, public knowledge, while any information about any business is private until that business decides differently.

The public seems to feel otherwise, as California's Pacific Bell recently found out when it announced it wanted to sell its list of classified phone numbers to telemarketers. The plan met with such howls of protest that Pacific Bell withdrew the plan immediately, and in damage control mode.

The phone company's problem was one of visibility. It wasn't trying to do anything more than uncounted companies do everyday in the consumer information industry, it just couldn't do it without being noticed. Most of the vast consumer information industry is so out of sight from consumers that they simply don't know enough about it to be mad at it. The Pacific Bell incident indicates that when they find out, they are very mad indeed.

There is growing pressure from consumer groups to completely reverse the status quo. Consumers want their lives to be private, and the activities of business and government to be public. The argument is that only informed citizens making informed decisions can produce a healthy society, and currently far too much information is being kept from them, and the tobacco scandal is a perfect example of this. Recently a court in Massachusetts stopped implementation of a state law which required cigarette manufacturers to disclose the additives in cigarettes, on the grounds that the cigarette manufacturer's right to privacy outweighed the public's need to know. Massachusetts courts have also upheld employee drug testing requirements by businesses, leading consumer advocates to question the integrity of system which allows business to know what consumers put in their bodies, but denies consumers the right to know what business put in their bodies.

The consumer demand for some kind of privacy protection has not gone unnoticed by politicians. VP Al Gore recently called for a consumer privacy Bill of Rights using the Internet to correct several of the problems of the current system. Consumer advocates argue event stronger measures are needed, but most agree the idea of using the Internet to reform the current system has merits.

Gore's plan calls for a centralized site that will act as a clearinghouse of information between consumers and businesses. It will allow consumers to do things like post a single request to be removed from mailing lists that all direct mailers could reference when mailing compiling lists. Currently, no single system exists, and consumers must contact each direct mailer individually, an expensive and nearly impossible task.

A much more ambitious and badly needed service the Internet site could provide would be an online copy of each persons credit report, accessible by the concerned individual at any time, and at no cost, and for a small fee by any business the consumer approved. Response time would be minutes, instead of weeks.

One of the biggest consumer complaints about the current credit reporting system is the lack of accuracy, something that costs businesses as much as consumers. Businesses lose millions of dollars in sales every year because faulty information in credit records keeps consumers from buying things they would otherwise be qualified to buy. Horror stories are not hard to find.

For instance, an engineer at Adobe Systems had problems buying a house because a credit reporting service erroneously indicated he had an outstanding overdue judgment in the nature of $250,000 from a municipal court in some county in Texas, in the middle of nowhere. The engineer soon found himself in a Catch-22 situation. The credit reporting service demanded the engineer get a letter from the Texas municipal court stating no such judgment existed, which the engineer couldn't do because that particular Texas county, being in the middle of nowhere, had no municipal court. To the engineers frustration, he was never able to find out where information about the judgment originated from.

The current lack of accountability makes this kind of event common, and it acts as a subtle, but constant, brake on the national economy. It is also grossly unfair. Under the current system the consumer is generally responsible for all costs related to bad information on their credit report, and it can sometimes cost thousands before it's over. The industry mantra to consumers of "You are responsible for knowing the information on your credit report. And for correcting it." is little consolation to consumers fed up with industry indifference about their complaints.

Given the current mood of the public about privacy, it may be time to consider serious reform. In Europe, by law consumers must be notified of all information about them held by consumer information services, and this means updates on a regular basis, and all at no cost. American companies have rejected this approach on the basis of cost, but the Internet has made the cost of this kind of system small change by today's standards. We have a chance to leap frog ahead of the European system, with something that costs a lot less.

Another reason for reform exists, too. Even if consumers don't have much political clout these days, they are getting a new kind of technological clout: a degree of control over part of their lives. The current trend is for businesses to know more and more about consumers, but be able to contact them less, because the same computer technology which allows corporations to collect data on consumers can also be made to help consumers filter. limit, or completely eliminate advertisements from their e-mail, radio, and television. In the future, businesses may have to trade consumers privacy in exchange for limited access to them. Otherwise, if the current trend reaches its logical conclusion, businesses will know everything about their potential consumers, but won't be able to reach any of them.

Copyright 1994 - 2010 by Glen Emerson Morris All Rights Reserved

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