Consumer Privacy: Personalized or Private?

Consumer Privacy: Personalized or Private?

Sharing information online doesn’t necessarily endanger one’s privacy — it all depends on what kind of information and how it’s being used.

A federal judge on Tuesday provided a major victory for consumer privacy. After July 1, credit report companies will no longer be allowed to sell your Social Security number or other data in the “credit header” of your report without your consent. This is exactly how privacy should be regulated. The trafficking of sensitive personal data — not some Website’s collection of your phone number — is the true privacy problem.

Here’s the worst-case scenario: You trip and injure yourself at the supermarket. You sue. The retailer pulls out your beer-buying history as evidence at trial. Now imagine that the retailer sells those records to your HMO. This is scary and realistic (though not a major problem).

Other than defense against lawsuits, very few business practices can be profitable based on embarrassing individuals. The unusual data mining required to do this is costly and time-consuming. Businesses don’t do what isn’t profitable. To protect litigants, rules of evidence could be tweaked, if need be, to suppress embarrassing but irrelevant evidence.

The only profitable use of tracking an individual’s purchasing history is targeting future offers to the individual based on that history. I welcome that service. At best, I’ll see more offers I like. At worst, direct marketing is annoying, but it can’t ruin anyone’s life.

But what about the store reselling my beer-purchase history to my HMO? That could be profitable to the retailer, and it could hurt me. That is where milestones like Tuesday’s decision come in. It restricts the resale of potentially harmful data, such as that on credit reports. Health records now also enjoy new federal protections. Narrowly tailored laws that restrict the resale of sensitive information are all we really need.

It would be a mistake for consumers to overreact and stop sharing information with businesses. Information can result in better service. We should strive to eliminate misuse, not every use.

Posted by on May 9, 2001