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?