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PRIVACY ON THE INTERNET

Posted on February 22, 2000

      As the Internet matures, preserving user privacy and anonymity is becoming a significant problem. Technology now makes it possible for online businesses and advertisers to turn the Internet into a realm where activities and habits are monitored and recorded, largely without consumer knowledge or consent. Unless businesses can protect privacy, the erosion of trust could seriously harm e-commerce as well as cause the public to become wary about using the Internet for education, research and other important non-commercial functions.

      In the offline world, a big part of personal privacy is simply the freedom to remain a face in the crowd. No one tracks a shopper as he visits various stores in a mall or keeps notes on what products he looks at. But in cyberspace, that shopper's behavior -- which Web sites he visits, and which ads he clicks on -- can all be instantly recorded and compiled, albeit through computer-based identifiers rather than by name. Most consumers have little idea that unseen advertising networks on the Internet track their movements across multiple Web sites. Most do not know that Web sites can collect and sell data about them. But consumer concerns are rising, and businesses are getting worried about a privacy backlash.

      This month the Electronic Privacy Information Center, an advocacy group, filed a complaint against DoubleClick with the Federal Trade Commission, alleging unfair trade practices in its tracking of the online activities of millions of Internet users. DoubleClick, the leading Internet advertising company, places ads for its clients on about 1,500 Web sites -- including many of the most heavily used sites such as AltaVista -- that are part of the DoubleClick network. When a computer user views an ad on a network site, DoubleClick places a "cookie" file on the user's computer hard drive that carries a special identifying number. The cookie allows DoubleClick to monitor the user's computer -- though without being able to identify the user by name or address -- whenever he visits a network site, and note the content he is viewing to deliver a targeted ad that is customized to a user's interests.

      Last year DoubleClick acquired Abacus Direct, a company that has a database of millions of names, addresses and other personal information collected by the nation's largest direct-mail catalogues. Now DoubleClick is building an online version of Abacus, and will be able to match personally identifiable information on purchasers collected by the online Abacus with DoubleClick's data on those individuals' subsequent Web activities.

      DoubleClick says it will give users the opportunity to opt out of this matching. But privacy advocates fear that this kind of data collection will become widespread in cyberspace, and that personal information -- from browsing habits to the research one might do on the Web -- could potentially be released to employers, insurers and others. Industry's answer to these worries is self-regulation and the creation of privacy policies. Unfortunately, even good policies are largely unenforceable. A new study by the California HealthCare Foundation of 21 major health-related Web sites found that many violated their own stated privacy policies, and shared personal information collected from visitors without their permission.

      One solution is to give users easier ways to block the collection of information. DoubleClick, responding to public criticism, has begun a campaign to tell users how to opt out of tracking. The World Wide Web Consortium, the group that designs standards for the Web, is creating a new way for Web sites to transmit the site's privacy policy automatically, and allow users to signal only the information they are willing to share.

      Also, several Internet privacy bills have been introduced in Congress. Businesses are concerned that government regulations could hinder the Internet's dynamism. Many users may want to receive ads aimed at their interests. But all users should get a meaningful choice about how personal data are collected and used. Maintaining privacy will be integral to the Internet's future, if only because consumers need to feel safe enough to participate.

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