I am excerpting on this blog roughly 10% of my next book, The New Technology Elite due out in February (and available for pre-order on Amazon – see badge on left) . Chapters 18 through 20 focus on how society, regulators and analysts need to also evolve in a world of the “technology elite”. Here is the guest column in Chapter 19. Note: the text is going through the publisher’s edits and subject to change.
Mary J. Cronin is a Professor of Information Systems at the Carroll School of Management, Boston College. Dr. Cronin has more than 20 years’ experience in managing and advising technology-intensive organizations. During this time she has written extensively about online privacy and data security issues, including the impact of smartphone apps, RFID, smart products, and geotracking.
When I starting writing about online privacy in the 1990s, the declaration that “There is no privacy on the Internet—get over it” was still controversial. Today’s upsurge in social networking and the ubiquity of targeted online advertising and customer profiling makes the lack of online privacy abundantly obvious. However, recent developments indicate that the privacy policy pendulum may be swinging back in the direction of online consumer protection.
In December 2010 the FTC issued a report on “Protecting Consumer Privacy in an Era of Rapid Change,” which repeated the well-known reality that “many companies—both online and offline—do not adequately address consumer privacy interests.” But for the first time the report proposed “a normative framework for how companies should protect consumers’ privacy.”
In particular the FTC endorsed a browser-based “Do Not Track” mechanism that would provide a simple way for consumers to disable tracking of their online behavior across all Internet sites. Various Do Not Track bills that would give teeth to the FTC framework have been working their way through Congress and state legislatures during 2011. In anticipation of stricter privacy enforcement, Google, Microsoft, and Mozilla are already providing some Do Not Track features in their latest browser releases.
But a browser-based privacy solution won’t address the much larger consumer information sharing issues posed by connected devices and products that are called smart products or more generally the Internet of Things. At a time when smart connected products are generating unprecedented amounts of data about the daily lives, locations, health, and habits of consumers in their homes, in their cars, on mobile networks, and in every location that they might visit, the tracking of online browser behavior is just the tip of the iceberg.
**************
The major new privacy challenge for this decade is the continuous, automatic, and invisible tracking of individuals by multiple smart devices. In the aggregate, consumer-owned smart products collect and report data at a level of precision and frequency that vastly outstrips the consumer information collected online.
The number of smart products owned by a typical consumer is growing at a rapid pace. Home health monitoring and smart energy systems for the home are still in at early adoption stage; by the end of this decade they are likely to be as common as Internet-connected TVs and smartphones in middle-class U.S. households. Smart devices will inevitably develop more sophisticated behavioral tracking and data reporting capabilities and in the absence of privacy guidelines, vendors will use those capabilities to the fullest. Until smart product privacy gets more attention, consumers are unlikely to realize extent of tracking and highly personal data collection that is enabled by the smart products used in their daily routines.
Smart Products That Consumers Can Trust—A Business Opportunity
Rather than waiting for the government to mandate smart product policies, companies would be well served in adopting and disclosing consistent and verifiable guidelines for the permissible use, duration of storage, and data security protection measures taken to protect all of consumer information that is collected by their connected products. Smartphone, automotive, home entertainment, and other smart product vendors should also disclose the privacy practices of their ecosystem partners who develop applications and peripherals for their products.
Providing clear information to consumers about smart product data collection capabilities and offering buyers a spectrum of service and privacy options can provide new business opportunities for vendors. Leveraging the communications capabilities of smart products in ways that allow owners to talk directly to the vendors will create a new form of value and encourage even more data sharing. Many consumers would opt to accept the vendor’s stated data collection processes, in exchange for value-added services, improved customer support, and the personalization that such data collection enables. Those who opt out might do so only temporarily. Having control and choice about data sharing would make buyers more comfortable with using the smart product in a variety of ways.
Comments