Nationalism and Your Personal Life: How Privacy Will Reach Its Market Inflection

By Dave Wieneke | in Conferences & Meetings, Privacy/security, Web 3.0: Beyond the Browser & Page | 7 Dec 2010 | 2 Comments

This week I had the pleasure of guest lecturing for Professor Meera Venkatraman’s course on The Business of Social Media at the Sawyer Business School of Suffolk University. It is simply not possible to have a serious focus on the future of digital marketing without being connected to academic programs like this. You’ll see why as this story unfolds.

I was there on the course’s last day to talk about Web 3.0: The Wave That Follows Social. Makes sense, right? They’d focused on social marketing, and now I was helping frame it in the larger context of ongoing innovation.

And that innovation involves business and social layers that combine to create or stifle waves of digital innovation. Privacy is the pivotal issues for Web 3.0’s success, just as the CDA’s Safe Harbor provision has been the enabler for social media, and Fair Use was a legal enabler of the Web’s early days. This socially savvy bunch dug right into our culture’s open questions on privacy.

Is Consumer Privacy Online a Quaint Fallacy?
The class broke into two camps on this. One side thought privacy might become a competitive differentiator. If you have a choice of which free email, search engine, or discount program you join, why not the one that respects your privacy?

The other camp thought privacy was simply a non-issue to  most consumers. They parted lightly with their rights in terms of use, because to some degree they acknowledged that a lack of privacy is a given in digital life. Then the story of Anna Bolotovsky came up.

When they heard how Google had used Anna’s name and a theme from her private email in its advertising, they saw a real issue. Even if the terms she agreed to allowed such use, the class agreed Google was responsible for at least restrained use, and even to make a reasonable attempt to notify her or seek explicit permission for the specific use.

The Power of Digital Media Is to Spy
As an enterprise marketer, one of my happiest days was the first time I could identify my web visitors by name and company as they hit my B2B site. It was like watching blood circulating around the body. Now imagine having that vision across a huge chuck of the Net.

One of the tenets of Web 3.0 is that over the last 15 years, internet traffic has consolidated.  According to Comscore, in 2002 about 20 percent of Net traffic went to the 10 most popular sites. Now that number is 75 percent. And the data and intelligence these sites have about you is overwhelming.

Will All Your Privacy Belong to China, India, or Russia?
Currently, social media businesses are overwhelmingly US-owned. But this reality is not permanent, and economic forces almost certainly assure us this will change. In Prof. Venkatraman’s class, we imagined the impact of a firm backed by a foreign government (say China, Russia, or Saudi Arabia) buying one of the platforms Web users increasingly rely on.

Since the US government is currently seeking back doors into the major online social networks for data scraping, it’s not at all alarmist to expect that any acquiring foreign national would provide a full API to their national intelligence services, just as we’re seeking to do. Governments and corporations both seem to want minimal user privacy; they just have slightly different motives.

Then we discussed a few scenarios:

The purchase of Google would provide a view of individual search histories over months and a limited number of years. A new owner could subtly change select search results to influence public opinion. And of course, looking in people’s email accounts is obvious, as would be tracking their site visits through Google Analytics. And there are many lesser-known initiatives, such as Google is bidding to manage New Zealand’s no-fly list. Imagine the fun a sovereign fund could have!

The purchase of Skype (or, heck, Verizon). Imagine the social graph that phone number analytics can provide. A simple scrape of phone numbers for Craigslist’s famous adult service ads connected to phone usage probably would provide leverage of public officials beyond Eliot Spitzer.

Bank data. We talked about how banks currently use social networks to spot criminal associations, in order to focus extra investigation of loan applicants whose online friends have been convicted of bank fraud.  One student talked about how the bank he works for resells loan application data to non-financial firms.

If the Service Is Free, You’re the Product
The students who suggested that people who click on agreements recklessly deserve to lose their privacy spotted this open door. Whom you give private data to doesn’t matter; if you let it become an exchangeable asset just once, it’s then a commodity.

The students started to consider the free online services we all rely on as “privacy brokers.” That’s the model Facebook keeps coming back to. Determining if Facebook advertising is a gold rush may take more time, but the data of its social graph is indisputably golden. That’s what buyers of these platforms would seek, and it is absolutely what US and foreign governments are seeking today.

The class seriously grabbed on to the idea that nationalism brings a whole new gravitas to personal privacy.

Would you be reluctant to participate in social networks that provide back door access to foreign intelligence agencies? If not, consider that the rest of the world already is, and that every government is asking for just such access to services running in their jurisdictions. Privacy takes on a whole new weight when it’s internationalized, and that may create a base requirement for “homeland privacy” as well.