Saturday, August 23, 2014
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The Private Sector’s Privacy Puzzle

NEW YORK – Why is privacy such a challenge for private companies? (Governments have their own problems, but that is another story.) Beyond privacy laws, companies must cope with customers with varying expectations, competitors with varying levels of integrity, and the various relationships that form the context of data exchange.

Privacy relates not only to who knows how much about us, but also to how we feel about it. Many “privacy” concerns are based on concrete interests, such as preserving financial security or obscuring information that could compromise one’s employment or ability to qualify for affordable health insurance. But there is also a more personal aspect: the tension between the desire to be known and the desire to protect one’s secrets, whether insidious, embarrassing, or intimate.

When the co-founder of a company in which I invested mentioned to me that a famous person I happen to know had signed up for the service, our first reaction was that I should reach out to him with a friendly note. But then I began to wonder whether he would be comfortable to hear that others knew of his use of the service (though it is a non-edgy business tool). Of course, he trusted the company enough to grant it technical access to his business data, which the company’s terms of service assure will not be viewed or used. Would the fact that others knew his identity as a user undermine that trust? 


As it happens, the company uses a tool called Intercom, which allows any website operator to find out about its customers by their email address, Facebook ID, or whatever they use to sign in. There are many such “customer relationship” services, which rely on data sources that match usernames and email addresses using unspecified means. Most people are probably not aware of these practices – though, at this point, most would not likely be shocked by the information. (I, for one, was only somewhat surprised – about as much as I was to learn about the US National Security Agency’s far-reaching data collection.)

Some of Intercom’s customers want to know how many Twitter followers their users have, to determine their potential value as “influencers.” Once a company identifies which users have the most influence – well-known bloggers, for example – it may offer them better treatment, in the hope that they will recommend the service. Website startups may even want to check their users’ profiles on the Angel List database of angel investors, viewing them as a potential source of financing.

Others might use services such as Intercom to gain insight into their users’ interests – from their preferences in music to their favorite hobbies – in order to offer more personalized service. Indeed, many online services now offer to link users with their Facebook friends or LinkedIn contacts, or recommend activities or restaurants based on past behavior or current location.

Some people do not want this kind of attention, whether because they are already well-known personalities trying to fend off adoring fans or mooches, or simply because they are uncomfortable with unknown entities knowing so much about them. But, for many ordinary users, such recognition can be valuable and appreciated, even if it is not accompanied by special gifts or benefits. The question is how to distinguish between the two groups. The answer should be simple. Ask the customer: “How may we use the information you share with us, or that we receive from services like Intercom?” The problem is that most companies prefer not to raise this issue; they would rather let sleeping dogs lie.

What these companies must recognize is that over time they may not be able to survive a steady stream of privacy gaffes – whether the result of their own mistakes or guilt by association – and constantly changing rules. (In this sense, Facebook is a rare exception.) While it may require a little more effort and awkwardness to find out what customers want, companies that do so in a straightforward and open way will benefit in the long run.

To be sure, such openness carries some risks. For example, some people, alerted to the amount of information that is being collected about them, may refrain from using the service. For them, recognition from people may be okay – even desirable – but recognition by computers is creepy and unfulfilling.

The movie Her tells the story of a man whose job – composing letters for people who cannot write their own – will soon be automated by a new generation of operating systems capable of learning so quickly and comprehensively that they quickly surpass a single human in terms of accumulated knowledge. The film’s protagonist soon falls in love with one of these operating systems. “She” loves him, too – as well as 640 more of the 8,316 people with whom she works. He is not satisfied with that level of shared attention, especially given how intimately she knows him. The computer is human-like enough to win his love, but cannot fulfill the relevant expectations.

The challenge is thus to build systems that feel appropriately personal, without making users feel violated or uncomfortable. At the same time, they should not be presented as being more human than they are. Otherwise, users’ expectations will become disconnected from what the company can deliver.

But there is one more complication: Some people seek “privacy” from themselves. These are the kind of people who sport comb-overs, insisting to everyone – including themselves – that they are not balding. A scale salesman once told me that many people, despite being willing to share their weight with a doctor, do not want to look at the precise numbers themselves. The concreteness of the data scares them.

Another example: To commemorate Facebook’s ten-year anniversary, Time, Inc. offered to assess people’s newsfeeds to estimate how much time they had wasted on the site. While many were curious, I am sure many preferred not to face the facts.

Privacy is personal. By using a service, a person effectively enters into a relationship with its provider. Service providers should understand that their users will expect the transparency, respect, and recognition that are fundamental to any relationship.

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