A Protective Path Paved in Granola

[R. A. Hettinga]

http://www.nytimes.com/2001/07/15/weekinreview/15LOHR.html?todaysheadlines=&pagewanted=print

JUL 15, 2001

A Protective Path Paved in Granola

By STEVE LOHR

o understand the state of play for privacy in the digital age, it helps to
look at environmentalism as it was taking shape in the late 1960's.

At the time, there was a growing concern about the environment. The
politics were reactive and grass-roots, led initially by activist groups
rather than traditional politicians. The economic tradeoffs were difficult
to measure and a subject of much debate. Individual cases of serious
pollution caused alarm, but the environmental issue also mattered in a
broader sense, affecting "quality of life."

Today, privacy seems to be on a similar trajectory. Polls show that people
are increasingly worried about it. The main focus of public anxiety is the
use of personal information that can be collected and tracked over the
Internet. But there are also qualms about new tools of surveillance -
digital video cameras and special software - that the police are using to
scan crowds for criminals, as was done at the Super Bowl in January and
began in Tampa a few weeks ago.

It remains unclear whether privacy will become an issue with anything like
the political resonance and momentum of the environment. It has no
oil-covered birds or dying seals to fire public passions. There are
worrying episodes, like the accidental distribution of the e-mail addresses
of 600 Prozac users by Eli Lilly recently. But most of the anxiety is
anticipatory, about what use might be made of vast databases being
assembled online or the identifying numbers in Microsoft's software or
Intel's microchips. Thoughtful, often disturbing, books have been written
on privacy, but none have approached the impact of Rachel Carson's "Silent
Spring" in 1962.

Still, there are enough similarities to make some comparisons illuminating.
The core concept in each case has evolved over time, though the environment
is much further along. As a policy issue, the environment became synonymous
with health and safety. But privacy is still an elastic term that means
very different things to different people. Jeffrey Rosen, the author of
"The Unwanted Gaze: The Destruction of Privacy in America" (Random House,
2000), notes that privacy is an "amorphous concept" that can mean
anonymity, secrecy, personal control, security, inaccessibility, even
reticence.

AND like the environment, there is a social side to privacy that extends
beyond the cost-benefit analysis of economics. The widespread use of
digital video surveillance, Mr. Rosen warns, is an example. "You transform
the character of public spaces by putting cameras everywhere," he said.

Then there is the problem of assessing tradeoffs, a tricky reckoning in
both cases. But with the environment, the variables at least are apparent
and concrete - wealth and production, health and safety. Figuring the
tradeoffs surrounding privacy is more subtle: the free flow of some
personal information means lower marketing costs, lower prices and more
consumer choice. And the point of much new technology is convenience. Who
wants to spend an extra 20 seconds to encrypt a message?

Like the environmental activists of decades ago, privacy groups are pushing
for legislation to establish basic national standards and practices,
including at Senate hearings last week, just as environmental groups helped
prod Congress into enacting the Clean Air Act of 1970. They even pluck
their metaphors from the environment, warning of the danger of a potential
"privacy Chernobyl" or "privacy oil spills."

But as with the environment, legislation will probably come only after
there is broad grass-roots support, legitimate leadership and agreement on
what should be done.

"Various entities are competing for institutional competence and
legitimacy," observed Andrew L. Shapiro, the author of "The Control
Revolution" (Public Affairs, 1999), which examines the Internet's social
impact. And there is no real consensus, he says, on how to protect privacy.

Science and technology helped bring environmental dangers to light, as
biological research detailed the health effects of pollution. Some analysts
say the Internet has cast light on the lax information-handling practices
of the past.

Merchants have been selling credit-card data for years. The sure evidence
of that is the annoying arrival of junk mail every day. Technology
accelerates the practice and also makes it more visible. What was unknown
in the past now seems to be exploitation.

COMPUTER technology is making information and images easy and inexpensive
to collect, sift and transmit. In a study released last week, the Privacy
Foundation, an educational and research organization, found that 14 million
employees - over a third of the nation's workers who use the Internet on
the job - have their Web use and e- mail under constant surveillance.

The companies that use the surveillance software say they are monitoring
productivity, checking for objectionable communications like racist or
sexist e-mails and guarding against the loss of trade secrets. All those
considerations, notes Andrew Schulman, a researcher at the Privacy
Foundation, could apply to telephone communications as well. Such
surveillance, however, would be too cumbersome and expensive. But the
software for computer surveillance costs companies and some government
agencies $5 to $10 a year per worker.

Not only is it easier to collect personal information; it's also easier to
sell it. An online merchant can track a visitor's every mouse click, using
"cookies." Those clicks can reveal a person's interests and buying habits.
And there is a brisk business in selling that information to other
marketers.

"There is already a market in information on you," observed Hal R. Varian,
an economist at the University of California at Berkeley. "The trouble is,
you aren't a participant in that market."

Economists analyze privacy through the same prism as the environment,
trying to weigh a discrete economic benefit to a marketer (like the
polluting producer) against the more elusive cost of an individual's loss
of privacy (a person breathing dirtier air). The sale of personal data to
third parties, in economic terms, is an "externality." That is, the seller
can ignore the costs, because they are born by someone else - the
individual whose information is sold.

Externalities are a big part of environmental economics. And just as there
have been efforts to develop markets in pollution rights, Kenneth C.
Laudon, a professor at New York University's Stern school of business, has
proposed a "national information market," intended to give individuals
"fair compensation for the use of information about themselves."

Its contours may resemble the environment, but the privacy issue will
likely elicit a much milder policy response. Eventually, laws curbing junk
e-mail and setting basic standards for collecting and using online data are
a good bet. But sweeping, environmental-style regulation is doubtful. The
issue is different, and so are the times.

Copyright 2001 The New York Times Company | Privacy Information

-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'



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