THE BLOG

What Is the Cost of Losing Your Online Privacy?

07/17/2015 12:51 EDT | Updated 07/17/2016 05:59 EDT
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How often do you walk into a store and know more than the sales person about a product you are interested in? The Internet has changed the playing field. As Daniel Pink writes in To Sell is Human, the Internet has brought information parity between buyer and seller. Customers have the ability to gather intelligence about products like never before.

What about people? Are you the customer or the product when you use free services like Facebook, Google, or LinkedIn, to name a few? According to the website, TheirNetWorth.com, Google, Facebook and LinkedIn are worth approximately $350 billion, $90 billion and $7.5 billion respectively. How can companies that offer free services to most customers become so wealthy? Marc Goodman, TED speaker and author of Future Crimes, argues that users who consume such services are in fact the product, not the customer. Anyone who uses a social network, a website, app or a gadget that regularly collects some personal information about them is a product. Goodman says selling ads is the tip of the iceberg. The real money is selling a person's digital footprint online to the highest bidder by collecting petabytes of information about users.

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For example, it may start with simple Google searches, and then shift to using Gmail, Google Docs, Google Talk, and Google Maps. Google, like any other online company, keeps learning about you and never forgets. In 2012, Google decided to create a single unified view about each customer and merged data about users across all 70 of their products and services. Every time you use your Android phone, use their search engine, watch a YouTube video, check Google Maps, or other products, they learn more about you.

Internet spying and surveillance according to a 2012 Wall Street Journal report is one of the fastest growing businesses, estimated to be worth $156 billion a year. Mostly private companies capture data from countless channels. Goodman says one data broker company, Acxiom Corporation, in Little Rock, Arkansas, is in the business of "collecting, collating, and analyzing" more than 50 trillion transactions annually and created more than 700 million profiles globally, with 1500 specific traits per person. In 2002-3, a hacker stole more than 1.6 billion customer records from Acxiom and its clients.

Companies increasingly know more about you than your family and friends. In 2013, Target learned a 15-year-old girl became pregnant before her father and sent her coupons for baby cribs and clothes. The father berated a Target store manager for sending coupons that encouraged teenage pregnancy before later apologizing after she admitted to being pregnant.

Goodman says online companies get away with collecting and selling data because we, we give them permission by agreeing to a company's Terms of Service (ToS).

Terms of Service Apply

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Director, Cullen Hoback, spent a year making his documentary, Terms of Service May Apply. The documentary (short and long video clip) explores the hidden intent within online agreements about what we agree to every time we visit a website, use an app and other digital products and services. Most people don't read a ToS privacy contract because they are too long, too complicated and the text is too small.

Carnegie Mellon University says the average American comes across 1,462 privacy policies a year averaging a length of 2,518 words. This translates into 76 full workdays at 8 hours a day. It costs Americans $781 billion in lost productivity annually. A Wall Street Journal study estimated that ToS agreements cost each American household $2000 or $150 billion annually.

Goodman cites LinkedIn's privacy policy in his book:

"You grant LinkedIn a nonexclusive, irrevocable, worldwide, perpetual, unlimited, assignable, sublicenseable, fully paid up and royalty-free right to us to copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, process, analyze, use and commercialize, in any way now known or in the future discovered, any information you provide, directly or indirectly to LinkedIn, including, but not limited to, any user generated content, ideas, concepts, techniques and/or data to the services, you submit to LinkedIn, without any further consent, notice and/or compensation to you or to any third parties. Any information you submit to us is at your own risk of loss."

In other words, you grant LinkedIn irrevocable and perpetual access to any information you have provided for free. The company can sell your information now and in the future. ToS agreements are also getting lengthier. For example, Facebook's original privacy policy grew from 1,004 words in 2005 to 9,300 words in 2014.

Google's ToS for Google Docs is equally onerous. According to Goodman, anyone who uses and uploads a file to Google Docs automatically grants ownership of the document to Google. An excerpt from his book is below with an up-to-date agreement here.

"When you upload or otherwise submit content to our services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify and create derivative works, such as those resulting from translations, adaptations or other changes and license to communicate, publish, publicly perform, publicly display and distribute such content."

Reducing your online risk

You are the product of Internet and social media companies. The fear is what happens when the information you provide in one context is used in an entirely different context because it is sold. According to Goodman, data brokers are almost entirely unregulated by the government in safeguarding consumer privacy, correcting errors and requests for what information is collected about you.

We cannot put the genie back in the bottle. But we can become more diligent and thoughtful and begin to take back control. In a future article, I will outline other risks and also strategies that consumers can follow to mitigate risk and reduce the chances of their information falling in the wrong hands.

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