Consumer Privacy - The Elephant In The Room

How A Consumer Backlash Could Change The Landscape

By David Miranda

Both the public and private sectors have an insatiable appetite for intelligence. Insightful intelligence provides the owner of the intelligence with a strategic (and tactical) competitive advantage, i.e. the better the intelligence, the lower the risks, the better the plan, and the better chance for positive outcomes.

Here lies the ongoing dilemma. At what point does collecting intelligence step over the line - the line of invading someone's privacy? At what point is the end not justified by the means?

We are witnessing this conflict today, both in the public and private sectors.

After 9/11, the government passed The Patriot Act that has expanded the power of government agencies to initiate wiretaps, peruse emails, and analyze internet behavior with the cooperation of telecommunications companies, search engines, and social networking sites. All in the name of national security. The debate over privacy and the government's right to know to protect the country continues.

In the private sector, companies collect intimate personal information on their customers for their own purposes as well as for renting and selling to third parties. Some companies like Equifax and Hyperion collect consumer information from many sources and sell this information to third parties like credit card and mortgage companies. There are numerous web sites that collect consumer information for sale to other consumers as well.

Most, if not all, web sites collect and aggregate information on visitors and can track their visits and navigation using what is known as "cookies" which are loaded onto the visitor's computer indefinitely unless removed or blocked by the user. Google, among others, collects information on the searches people conduct; the web sites they visit and targets paid advertising based on a consumer's imputed keywords. Google is not a search engine or a media company - it is an intelligence-gathering company and it is attracting the attention of regulatory groups.

Those in the marketing arena need to take heed. A consumer backlash could dramatically alter the business landscape. They are already beginning to "techno-barricade" themselves from unsolicited commercial messages. Over 150 million people, for example, have registered with the government's "Do Not Call List". They are rebuking spam, both on their computers and mobile devices. They are concerned about the ever-growing problem of ID theft. There have been countless cases in both the public and private sectors of lost computers and hacking into supposedly secure consumer databases containing sensitive data on millions of consumers.

All this has caused a ground swell of consumer concern over privacy protection. A consumer backlash means the potential for government intervention and the federal government is already dealing with the scope of The Patriot Act.

What is a responsble company to do in these circumstances?

The answer is be pre-emptive. Proactively communicate with both potential and existing customers that their privacy is your top priority - and mean it. Do not wait until there is a fiduciary breach and it makes the evening news or 60 Minutes.

The consumer privacy elephant is in the room and it's time to offer it a seat at the table.