Privacy Considerations for Innovators

A couple weeks ago I drove from San Diego to the LA area for a business dinner.  Along the way, I passed through a toll area which didn’t have a cash-only lane.  As I drove my rental car through the toll, I saw a sign telling me I could go to a website to pay my toll, which of course I never got around to doing, so I recently received a thirty dollar charge from Hertz, in addition to a coming ticket from the State of California.  Nice!

[featured-image single_newwindow=”false”]Photo courtesy of opensource.com[/featured-image]

Of course, it’s helpful to California (and other states that do this) to make it as inconvenient as possible for out-of-state visitors to pay tolls so that they can charge higher “tolls” in the form of tickets.  But there’s something else that lurking beneath electronic tolls that is more important than tickets and money, and that is the subject of privacy.

During a morning run this week I listened to this HBR IdeasCast interview with Scott Berinato on privacy’s “shrinking future”.  I think many of us sense that although the services we use have an opt-in concept, those permissions may only serve as a psychological fig-leaf to convince ourselves we are in control of the data we share.

In fact, the data permissions often embedded in unreadable terms and conditions (with which we always “agree”) often carry arcane data sharing activities which are of little consequence to us in a given situation, but over time stitch together an incredible picture of us that might be a bit too vivid and accurate.  Here are a few thoughts and questions to consider as the world changes faster than we might appreciate…..

• Years ago, there was an interesting insight into the shopping habits of young fathers at local convenience stores, which is famously referred to as the “beer and diapers” insight.  In short, diapers in small convenience stores are purchased usually in late hours when the need for diapers is urgent.  Men predominantly are sent to go buy the diapers, but early data showed that these stores sold more beer than usual whenever diapers were purchased, since the harried Dads often thought “I need a beer” when they were purchasing the diapers.  This lead to the science of Market Basket Analysis.  It’s what enables Amazon to make on-target recommendations to you.  It’s what you enable when you participate in your grocery store’s discount program.

• Our self-selection into the data collection web is made with the best of intentions, and based upon a fair trade for immediate convenience.  Sure, Disney’s tracking of us throughout the park might seem a bit Orwellian, but reducing the amount of time your seven year old stands in line for a ride makes it seem worth it.  For more on how consumer choice will lead to privacy issues, read this prescient Jeff Jonas blog post from 2007.

• Should a state use a public good – the roadways – to track people’s movement?  Do tollways keep the data they collect every time we drive through a toll?  Should regulation require that every toll plaza have a cash lane, both for convenience as well as privacy?

• The nature of data modeling is such that companies can buy data and form new predictive data models which promise great convenience, but also uncomfortable insights that many might consider private.  In this famous story, Target was able to figure out that women were pregnant based upon their shopping habits before the women had told anyone.  Facebook Likes can be used to predict a user’s sexuality with a high degree of accuracy.

• Recently, US school systems have increased their efforts to incorporate financial literacy into their curriculum. This much-needed teaching helps young people protect themselves in a hyper-consumer environment by teaching them how to make informed financial decisions.  Will there soon be a push to also require privacy literacy classes to address the new issues confronting students when it comes to data sharing?

• How does your business plan leverage available data in your industry?  How might it change over time?

Ray Kurzweil once said that “information technology’s growing exponentially…..and our intuition about the future is not exponential, it’s linear”.

Good point.  Where does all this lead?…….