Privacy and the Market

1. Privacy and the Market Richard Warner

2. Three Types of Privacy • Spatial rights define a physical zone of control over intrusions by others. • Decisional rights protect an individual’s freedom of choice. • Informational rights demarcate an ability to determine what others know about us and what they do with that knowledge.

3. Privacy and the Market • When considering business threats to privacy, it is easy, in the eagerness to protect privacy, to overlook the critical role that information plays in making it possible for market exchanges to efficiently provide us with goods and services

4. Coordination Example • “During the morning a number of people step into a Milan café for an espresso. They do not doubt that it will be available. What justifies their confidence? Making the coffee available rests on a great deal of cooperation, specifically the assignment to many people of performances that together accomplish a feat far beyond the capacity of any one person alone.

5. Coordination Example • “It is accomplished by market transactions that assign and link both multiple performances and multiple chains of them. Farmers cooperate in growing and harvesting the coffee beans. Truck drivers or locomotive engineers transport the beans to a seaport on highways or railroads that have been constructed by many kinds of cooperating laborers.

6. Coordination Example • “At the seaport, longshoremen and ships’ crews join the chain. At a dock in Genoa, shipping the beans on to Milan calls again on performances from longshoremen, warehousers, and truckers. Somewhere along the chain, some people roast the beans, and others fabricate bags for carrying them.

7. Coordination Example • “Think of other participating cooperators; insurers and inspectors; wholesalers and retailers. . . . However great their distance from Milan, innumerable people play their roles in cooperation, no less so than the surly or obliging waiter in the café.” • Charles E. Lindblom, The Market System: What It Is, How It Works, and What To Make of It 36 - 37 (2001).

8. Information’s Role • The coordination of these individual efforts occurs without centralized planning or direction; information is the thread that ties the efforts together. • The farmers growing coffee beans estimate, based on a variety of factors, the volume buyers will want to purchase, and so on.

9. Efficiency • Market economies depend on a flow of information between buyers and sellers. • The more accurate and less costly the information, the more efficient the economy. • We spend less to achieve the same results, and the savings can be use for other purposes--education, relief of poverty, improved health insurance, and so on.

10. Privacy and Technology • The most critically privacy concerns comes from the flow information from individual consumers to businesses. • Technology improves efficiency by making it cost-effective to collect, analyze, and use vast amounts of data. • The efficiency gain comes from the increased ability to: • determine what products and services consumers want; • to target advertising. • Targeting advertising is the process of matching advertising to recipients in way that maximizes the likelihood that the recipient will purchase in response.

11. Aggregation • Computer technology–and especially the Internet–have greatly increased the ability of information sellers to aggregate information. • In re Double Click:DoubleClick, “complies user profiles . . . from over 11,000 web sites for which and on which it provides targeted banner advertising.” 154 F. Supp. 2d 497 (S.D.N.Y. 2001). • It uses cookies to collect “e-mail addresses, home and businesses addresses, telephone numbers, searches performed on the Internet, Web pages or sites visited on the Internet and other communications and information that users would not ordinarily expect advertisers to be able to collect.” • It “aggregates and complies the information to build demographic profiles of uses. Plaintiffs allege that DoubleClick has more than 100 million user profiles in its database.”

12. Public Records • Public record are a particularly rich source of information. • Including: social security numbers; financial account numbers; • Family law files: information about children, allegations of wrongdoing and negligence; • Insurance litigation: details of medical conditions and other highly personal information (about the effect of the condition, preexisting conditions, or information relevant to supporting an allegation that the claims are exaggerated). • Sexual harassment: allegations about lifestyle and sexual history. • Criminal files: very sensitive personal information.

13. Accurint • Accurint aggregates public records. • It “provides access to the world's largest set of accessible location information, with the ability to search billions of records in fractions of seconds. Its proprietary technology allows users to quickly perform high-speed, targeted searches countrywide and retrieve information going back up to 30 years on names and aliases, addresses, social security numbers, telephone numbers, dates of birth, names and addresses of relatives and neighbors, property ownership and sales records, and related services” • Including driver’s license and plate numbers, accident reports, size of and number of rooms in one’s house, political party affiliations, and, for those targets who are professionals, licensing information.