Originally featured in OIT’s Spring 2018 Security Report
Privacy is Dead
It’s probably not the first time you’ve heard this. A private investigator, Sam Rambam was quoted as saying “Privacy is Dead – Get Over it” in 2006. In 2012, Huffing Post contributor Miles Feldman posed the question “Is Privacy Dead?” If it is, then our inheritance may have been in probate for years without us knowing it. The most recent major violation of privacy comes through a Facebook developer, Cambridge Analytica (discussed later in this newsletter), who collected data on millions of Americans without their consent to help political strategists win the 2016 US Presidential Election. But most likely this is only the tip of the iceberg.
When did Privacy die? People worry about privacy related to the Internet, but this was only the first time we noticed that our attitudes about privacy were changing. There were two major events that most likely started this – the first was the Phone Book and the second was your credit rating.
When the telephone was first invented, people needed a way of reaching each other…in order to make the device useful, operators would connect two people to each other. This was a costly way of doing business, so phone companies published subscriber information in a “Book” so that subscribers could directly connect with one another without human intervention. In this way, we willingly gave up some of our privacy in order for the value that connection gave us. Phonebooks became a business model for phone companies – they began selling advertising space in their phone books and now make billions. You could get your privacy back by requesting an unlisted number, but this too had its price.
Before the early 1900s, when you needed credit to make a purchase, a man from the bank would go around and ask your friends, relatives, and neighbors what kind of person you were. Credit translated into character. It was the best we could do at the time. After WWII, people started needing more and more credit after coming back from a costly war. In 1970, the Fair Credit Reporting Act was enacted to offer some rules to govern this new model of collecting and distributing personal information. Now, Credit Agencies share your information with each other, which allows banks to know when someone had defaulted on or had excessive amounts of loans with other organizations. This reduced the risk of issuing a loan, which allowed banks to give loans at better rates. Again, giving up privacy created real value for an individual.
As long as we’re getting our Inheritance, we’re happy. Hopefully, we don’t find ourselves cut out of the will.
When you add it all up, my estimate is that the loss of Privacy, i.e. all the private information that we give up every day to do business actually has a significant tangible value. My estimate is that our Privacy Inheritance should be worth as much as $10,000 or more per year. For most Americans, that’s like having a second part-time job. But unfortunately, we’re giving our inheritance away for free.
Why should a company, either your phone company or a bank, be able to share information about you? Because it creates a new type of property…Privacy Property is the new Intellectual Property. Google and Facebook have both been very successful at leveraging this Privacy Property to create a new source of wealth. And we welcome it for the same reasons that we wanted credit scores. There are scores of new types of Privacy Property that have been created in the last 10 years, and some that have been made even more valuable.
Privacy Property is great when you live in a country where you aren’t worried about government persecution. It becomes dangerous if this can be used against you. Because of their history, this is why European countries consider Privacy a “fundamental human right”. Other countries with repressive control generally snoop on Facebook posts or text messages in order to suppress the flow of information. There is a high “Privacy Inheritance Tax” that can wipe out any benefit, and perhaps cost people more than their money. And just like with other violations of privacy, oversharing can enable stalking, which is why Congress is considering passing Location privacy rules.
Facebook’s Chief of Privacy was quoted as saying that they are working to get rid of surprises…in 2012. Unfortunately, the Cambridge Analytica story that broke in March of 2018 suggests that Facebook was paying only lip service to privacy.