Michael Sanserino’s column on behavioral economics in yesterday’s Wall Street Journal is a timely reminder about the benefits and the risks of new kinds of personal data uses. Take the Sacramento Municipal Utility District which since April 2008, according to Sanserino, has sent monthly notices to 35,000 customers showing how their usage compares with their neighbors and with the area’s most-efficient customers:
“Customers who received the additional information cut their energy use by 2%, compared with a similar group of users who didn’t get comparison data.”
The behavioral economic theory which shows the powerful effect of information about others on influencing individual behavior is popular among many economists and in 2002, proponents Daniel Kahneman and Vernon Smith won the Nobel Prize for their work in this area. Encouraging people to conserve energy is clearly a societal good. But from a privacy perspective, the use of this type of data raises many questions. Will my usage be shared publicly? Will it be analyzed by marketers? Can it be used against me?
The same article cites a start-up company that has created a prescription drug container with lights that glow when it’s time for a pill, and a radio chip that transmits information about how often the medicine is taken. Again, great value in such data when used for the benefit of helping people manage their medications, and for the families or guardians of those helping support those in need of assistance.
But the new risks of potential misuse of this and similar technologies highlight the challenges and need for responsible practices raised as new data uses move from laboratories to living rooms.
In the Chinese language, the characters for “challenge” and “opportunity” are remarkably similar. As Sanserino’s article makes clear, business decisions are increasingly guided by principles involving shared information. That’s a great opportunity – but from a privacy perspective, it’s also a tremendous challenge.
Behavioral Advertising in Europe
Some news just in from our friend Kirsten Bock of the data protection agency of Schleswig-Holstein in Germany. Schleswig-Holstein manages the EuroPriSe privacy seal, a privacy certification backed by many European data authorities. This week, the EuroPriSe seal was awarded to nugg.ad, a behavioral advertising company active throughout Europe. For our readers who, like us, are deep in the weeds of online ad policy, the public report is important reading. Note that the company does not have users opt-in, but rather is strict about not logging IP addresses, strictly limits health and other sensitive targeting and expires cookies after 26 weeks. Some lessons for the U.S.? We have just conducted a detailed interview with nugg.ad’s CEO, so stay tuned for a more detailed discussion of how one of the leading European online ad companies is succeeding at both personalization and privacy.
From our lips to the Senate's ears…Cass Sunstein receives confirmation
On Wednesday, we wrote on our blog that Congress could help ensure that privacy issues are given the utmost priority by confirming Cass Sunstein as the new administrator for the Office of Information and Regulatory Affairs. OIRA is the office at OMB that helps oversee government agency privacy issues. As luck would have it, we learned late yesterday that the Senate has confirmed Sunstein’s nomination. FPF believes this is a very important move in the Administration’s goal of protecting American’s privacy interests. As Peter Orszag, the Director of OMB, said on his blog, “Cass is the type of data-driven, creative thinker that we need in public life.” FPF congratulates him on this new position and we look forward to working with him in the days ahead on emerging privacy issues.
Too soon to judge Obama administration on privacy…
A number of the most fervent privacy groups today put out a report critiquing the Obama administration’s record to date on privacy issues. At only 9 months in, it seems a bit too soon to rate the Administration. As we have written previously, we do think there have been early indications of a commitment to ensuring that privacy issues are given high priority in the policy process. But clearly there are very high hopes in the advocacy community that this Administration will lean on its many tech savvy appointees to forge new paths that ensure the advances of technology are harnessed in a manner that advances both the needs of government and civil liberties. Likewise, we think that many of the more progressive companies in the business community are eager to see the government take steps to help increase the trust necessary for citizens to embrace the advances enabled by new technologies.
What about the privacy of our youth? Obama may be the first president to offer our children some personal privacy advice. Yesterday, when he was asked for some guidance on how to become president, he told several ninth graders, “Be careful what you post on Facebook.”
One thing that Congress can do to help is to confirm Cass Sunstein, the Administration’s nominee for the Office of Information and Regulatory Affairs, which is the office at OMB that helps oversee government agency privacy issues. Sunstein comes to the position with a close relationship with the President and a long history writing and thinking about the impact of technology and society. The sooner the administration can have a focal point for privacy issues, the sooner we can expect to see progress on many of the privacy issues at stake.
How We’re Losing Our Privacy Online
How We’re Losing Our Privacy Online
Christian Science Monitor
By Gregory Lamb
August 31, 2009
Gail Heyman didn’t go on Facebook often. In March Mrs. Heyman, who lives in the Atlanta area, opened an account just to keep up with a few friends. She found herself rarely checking the social-networking site, letting days or even weeks slip by between visits.
But in late June, she received a phone call from a cousin. He had responded to what he thought was her emergency plea for money on Facebook and wired her $2,000 – in London. As he thought about it more, he decided to call her just to double-check.
Heyman, who was still in Georgia, was astounded. Someone had figured out her password, taken over her account, and posted the fraudulent request. “They told my [Facebook] friends that I had been mugged, and that I was in a hotel and that I needed money,” she says.
Her cousin was able to quickly contact Western Union and cancel the transfer before the money was picked up by the imposter in London. Heyman, still a little shaken, hasn’t reopened her Facebook account but hopes to get back online in the future. “It’s made me think differently about doing things online,” she says.
Jules Polonetsky quoted:
“Let’s make it easier for folks to act in the way they want to act,” says Jules Polonetsky, co-chairman and director of the Future of Privacy Forum, a Washington, D.C.-based think tank underwritten by companies such as AT&T, AOL, Intel, eBay, and Facebook. “Yes, I can make a silly joke to my friend. It can be easily watched by my friends, but I can easily make it go away if I need to.”
Facebook agreed Thursday to give users more control over the information they share with outside applications like games and quizzes in response to concerns raised by Canadian privacy officials.
Currently, people who wish to use such software have to agree to share all their data with the application. For example, when a user signs up to take a quiz, the software developer could tap the user’s biographical information, photos and hobbies, along with profiles and information on friends, even if such data aren’t needed to take the quiz.
Jules Polonetsky quoted:
Jules Polonetsky, co-chairman and director at the Future of Privacy Forum think tank in Washington, D.C., said that while users will be more aware that applications are accessing their data, they may still click through the notices without regard for what information they are ceding to the developers.
