Privacy 101

"Those who can't do, teach" . . . or so goes the popular saying. In the increasingly controversial area of privacy policy-making, a similar dynamic seems to be underway: something like, "those who don't understand the issues, make the rules."

Information privacy has become one of the most contentious controversies of the information age, with debates raging on Capitol Hill, inside the Beltway, in state assemblies, and across the Web. It is likely Congress will take some legislative action this session on information privacy. Since some of the basic elements of the privacy issue are far from clearly understood or communicated, the debate will probably generate more heat than light.

Gift Giving

There are many facets to the privacy debate, with several complex, closely related issues involved. A simple analogy to gift giving will illustrate this point: You wrap a gift, and presumably it stays wrapped until it's time for the intended recipient to open the gift.

What, you ask, is the privacy concern involved?

Is it that only the intended recipient should open the gift and see the contents? Or that the gift should not be opened early? Or that the gift will in fact be in its box on the day you intend it to be opened?

No, these are all security issues.

The only real privacy interest in the entire gift-giving transaction is that the information provided on the gift tag's "to" and "from" lines are the only things the gift tag reveals about you to others.

If you can grasp this example, you are well ahead of most participants in the "privacy" debate today. Most routinely conflate security issues--that is, the safety of the items stored online or on your computer--with privacy issues.

When a hacker attacks a Web page and grabs its contents--which may include your personal data--what has occurred is a security breach, and not a privacy violation.

Effect on Customer Service

Aside from the fact that many policymakers misunderstand important concepts in the debate, another area of concern is that policymakers may not appreciate how privacy legislation will negatively affect customer service.

While electronic databases and e-commerce have heightened awareness of what companies know about their customers and what they do with that information, the practice of information-gathering and targeting services based on that information is nothing new.

Take, for example, the general goods stores of 100 years ago, or even the clothing stores of today. Would a customer take offense if a thoughtful salesperson remembered her name from a previous visit and greeted her accordingly? What if that same salesperson went out of his way to "set back" some of the customer's favorite product, so she could pick it up the next time she visited? A customer treated that way might even reveal more personal information about herself--a phone number, perhaps--so that when a limited shipment arrived she could be notified.

In none of these scenarios is the customer likely to perceive the salesperson as acting odd or intrusive. In fact, she would be more likely to characterize him as helpful, providing "true customer service" like the "good old days."

There is one policy a business should adopt, of course. That is to put in place, voluntarily, guidelines for how customer information will be treated. The business should explain to customers what its practices are, and it follow those practices to the letter. Armed with knowledge of the business's information policy, the customer may then make an informed decision about the cost and benefits of engaging in commerce with that business.

The decisions that will be made in the states, on Capitol Hill, and in the White House in the next year or two will have a profound impact on our individual privacy. Understanding the issues and how they affect everyday life is critical if individuals are to remain in charge of their own lives, rather than turning over every-day decisions to the government.

Bartlett Cleland is director of the Center for Technology Freedom at the Institute for Policy Innovation.

For more information ...

Is Internet Privacy Overrated? Good business use of customer information reduces costs and waste, and improves customer service. (Liberty, August 1999, 2pp.)

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