The Lessons of the Lotus MarketPlace: Implications for Consumer Privacy in the 1990's

1. The Lessons of the Lotus MarketPlace: Implications for Consumer Privacy in the 1990's Mary J. Culnan

2. Lotus MarketPlace: Households • Joint venture between • Equifax (Credit Bureau) • Lotus (software) • Provide names, addresses, demographic and prior purchase behavior data for 120 million U.S. consumers on a CD-ROM

3. Consumer Objections • Secondary use of identifiable personal information without their consent • Equifax had no plans to notify consumers that personal data from their credit reports would be used in a new direct marketing product, MarketPlace

4. Violates Fundamental Privacy Principle Personal information collected for one purpose should not be used for other purposes without the consent of the individual . 1973 "Code of Fair Information Practices"

5. Lacked Centralized Database Controls • End-user owned the database and controlled its use • Could build lists using selection criteria • Lists could be exported for unrestricted use

6. Consumer Perspective“How Did They Get My Name?” • Consumers clearly want to control who has the right to access their personal information • The ability of a large company to collect and sell personal data clearly surprised and shocked most consumers when they learned about MarketPlace, resulting in a storm of complaints • More than 30,000 individuals exercised the option to "opt out."

7. Corporate Perspective: "What's the Big Deal?" • Lotus- “MarketPlace was only providing small businesses with a means to access the same information that was already available to larger firms “ • Equifax survey - majority of consumers believe that individuals have lost all control over how personal information is circulated and used by companies.

8. Mailing Lists Consumers do not understand the: • scope of the mailing list business in the United States • extent to which personal information is currently collected, merged, sold or exchanged • mechanisms that exist for having one's name removed from mailing lists

9. Lobbying in the Information Age: "It's a Brand New Ballgame" • New age of the electronic grassroots lobbyist • Much of the opposition to MarketPlace was mobilized, individual by individual, on "the net" • Power of the electronic media to effectively mobilize a national constituency independent of any of the traditional "big money" special interest groups should not be underestimated

10. Lessons:Where do we go from here? • Proper information agreement between the public and list compilers • Individuals who speak out can effect change • Patronizing firms with good privacy practices • Direct Marketing Association (DMA) • Develop voluntary privacy protection programs

11. Firms need to do a better job of educating the public • Consumers should be informed of recordkeeping practices and should be provided with options about the subsequent of use personal information

12. Firms can gain competitive advantage from their privacy policies • Detailed knowledge about consumer preferences is increasingly valuable to decision makers in the competitive global environment • Enhanced capabilities for surveillance, storage, retrieval, analysis, and communication of personal information