Privacy Is Good Business

Customers likely to share information if it is protected.

Responding to concerns about privacy, state and national legislators are moving to restrict your companys access to information about its customers. At the same time, products are coming onto the market that do much of what the laws are intended to do in guarding privacy.

Its a moment of opportunity for IT managers with vision to put forward to senior management a strategy that squares consumers desire to be let alone with business initiatives that leverage customer data. To do this, IT managers need to make a compelling case based on current technology and policy trends.

Here are the facts on the ground in terms of technology. Anonymizer announced the availability of Privacy Manager last week. Like roughly similar products from Zero-Knowledge Systems and Primedius, Anonymizers Privacy Manager controls cookies; blocks malicious code; and generally foils advertising tracking, pop-up ads and other Internet tracking tools.

These products are often free or low-cost—around $50—and I use them on my personal system. These tools arent new to the market, but the latest releases have shown gains in sophistication and in popularity, although a great deal more end-user education must take place to make these products a common part of the home desktop.

If consumers adopt these technologies, the effectiveness of online user tracking will rapidly diminish. Although home users are generally slow to adopt software tools they dont learn about at work, this case may be different. People, by and large, dont want others spying on them, especially when it comes to let-your-hair-down blogs, chats and just-plain-old-curious Web browsing.

Signs of consumer awareness are everywhere. The National Do Not Call Registry is one example. Another is the broad discussion about identity theft, fueled by the increasing costs to consumers when their identity is compromised. This awareness is swinging the pendulum of momentum toward increased privacy controls.

California state Sen. Jackie Speiers Financial Information Privacy Act is likely to be the first of many similar bills that will be passed by lawmakers in response to consumers desire to keep their private business private. And lets not forget the Graham-Leach-Bliley Act and HIPAA (the Health Insurance Portability and Accountability Act of 1996).

Many senior business executives, however, see privacy legislation as an obstacle rather than as a set of guidelines for conducting business in a better way. For example, all the legislative examples I just cited have very generous loopholes—inserted to cater to the desires of some businesses—that allow companies to buy and trade information with one another. These loopholes have been copied into anti-spam legislation. For example, supposedly tough new anti-spam legislation in California lets providers of free e-mail services send all the spam they like to users of their systems.

This brings me back to the importance of personal privacy management tools. The software gives consumers the weapons to fight back if companies continue to treat privacy as a barrier to incremental business. These products adopt the same take-no-prisoners attitude that many businesses seem to have. Zero-Knowledges Freedom WebSecure cloaks IP address information, blocks ads and limits the effectiveness of cookies.

These techniques are likely to be augmented by consumers adopting a sort of social hacking. For example, I cant remember the last time I gave my correct birthday to any organization except a credit card company.

IT managers should pull the trends and technologies Ive outlined here into a presentation for corporate execs. The presentation should show management that it must value customer data by strictly limiting its use. It should also explain why it makes sense to get customers to become partners in determining how their private data is used. Heck, send me an e-mail, and Ill help the first 10 respondents polish their presentations.

Unless the cooperation of customers is enlisted, effective technologies and laws with teeth in them will hold sway, and valuable customer data will be wasted—to nobodys benefit.

Senior Analyst Cameron Sturdevant is at