Consumers becoming more protective of their privacy

Companies should consider privacy in their business plans and factor in breaches in their risk assessment

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In ear­ly 2010, Mark Zucker­berg, founder of Face­book, brash­ly announced that “pri­va­cy is no longer a social norm.” Not to be out­done, Eric Schmidt, then Google’s CEO, a few weeks lat­er boast­ed that “the Google pol­i­cy on a lot of things is to get right up to the creepy line and not cross it.”

Those procla­ma­tions sig­naled the degree to which Amer­i­cans had so eas­i­ly aban­doned long-held, hard-won notions of per­son­al pri­va­cy. Indeed, lack of pri­va­cy has come to be accept­ed as the required price for par­tic­i­pat­ing in an inter­net-cen­tric economy.

But the pen­du­lum may have start­ed swing­ing the oth­er way. A recent con­sumer sur­vey, con­duct­ed by the legal firm Mor­ri­son & Foer­ster, shows that many con­sumers actu­al­ly real­ly do care about privacy.

Relat­ed info­graph­ic: Pri­va­cy con­cerns influ­ence con­sumers’ buy­ing habits

Third­Cer­tain­ty sat down with Eric Hodge, direc­tor of con­sult­ing at IDT911 Con­sult­ing, to dis­cuss the ram­i­fi­ca­tions of this devel­op­ment. IDT911 spon­sors

LW: Is Zucker­berg still most­ly right about Amer­i­cans not car­ing about privacy?

Eric Hodge, director of consulting at IDT911 Consulting
Eric Hodge, direc­tor of con­sult­ing at IDT911 Consulting

Hodge: Mark Zucker­berg has a vest­ed inter­est in pri­va­cy no longer being a social norm. The more rights he has to use the moun­tain of data sit­ting in Face­book, the more mon­ey he is worth. Of course, peo­ple are grow­ing con­cerned. What’s scari­er than a face­less bad guy steal­ing from you or ruin­ing your rep­u­ta­tion from 9,000 miles away? What’s more ter­ri­fy­ing than hav­ing your iden­ti­ty lit­er­al­ly stolen from you?

LW: Is there a gen­er­a­tional com­po­nent to our atti­tudes toward privacy?

Hodge: Old­er gen­er­a­tions can’t help but say that the younger ones have no sense of pri­va­cy when it comes to using tech­nol­o­gy to share per­son­al feel­ings or events or even embar­rass­ing pho­tos. But the same young per­son who shares racy Vines of her night out on the town knows bet­ter than to send her cred­it card num­ber in an unen­crypt­ed email or give her pass­word to some­one over the phone. These are two real­ly dif­fer­ent kinds of pri­va­cy, and Zucker­berg may be mix­ing them up.

LW: The Mor­ri­son & Foer­ster poll shows con­sumers appear to be con­cerned about gov­ern­ment intrud­ing on their privacy.

Hodge: I was struck by con­sumers’ rel­a­tive lack of trust in the gov­ern­ment. After all, the vast pre­pon­der­ance of pay­ment data, per­son­al­ly iden­ti­fi­able infor­ma­tion and health infor­ma­tion resides in the pri­vate sec­tor. The major­i­ty of breach­es mak­ing head­lines are in the pri­vate sec­tor, as well.

Peo­ple should under­stand that, unlike Face­book or Ama­zon, the gov­ern­ment has no motive to sell your data. My first­hand expe­ri­ence is that the gov­ern­ment does a bet­ter job with pri­va­cy than the aver­age mer­chant or ser­vice provider. Maybe the gov­ern­ment needs a good PR person?

LW: Has the time come for com­pa­nies to fac­tor pri­va­cy into their busi­ness models?

Hodge: Acknowl­edg­ing and respect­ing con­sumer pri­va­cy is now part of decent cus­tomer ser­vice. It is also one of the best ways to avoid reg­u­la­to­ry risk and rep­u­ta­tion risk. I worked with a small, region­al super­mar­ket that wound up on the ragged edge of sol­ven­cy because of the fines they were pay­ing to Visa for dif­fi­cul­ties com­ply­ing with pri­va­cy rules under the Pay­ment Card Indus­try Data Secu­ri­ty Stan­dard (PCI DSS.)

I’ve also worked with an online retail­er who saw their busi­ness take a real hit for sev­er­al months after a data breach was pub­li­cized. Pri­va­cy expo­sures can present a sig­nif­i­cant risk and should be fac­tored into risk assessments.

More sto­ries relat­ed to privacy:
Com­pa­nies must not for­feit pri­va­cy in march of technology
Fair or foul? New foren­sics tools raise pri­va­cy concerns
Apple has good rea­son to pro­tect your privacy


Posted in Data Privacy, Featured Story