The most valuable online asset: Your personal data

June 17, 2013

Facebook Magnifying glassRecent revelations about National Security Agency monitoring of communications have brought the issue of personal privacy in the digital environment to the center of public attention.  This heightened concern regarding privacy will likely attract greater scrutiny to the rapidly expanding and diversifying commercial uses of personal data.  Social media and other online services now routinely collect, analyze, and distribute massive collections of personal information, and those services continue to develop new ways to use that data.

For example, Facebook recently launched a data analysis tool for advertisers which facilitates targeting of advertising to specific consumers.  This tool enables advertisers to integrate data collected by Facebook with information gathered by third-party companies, such as Axciom Corporation and Datalogix, Inc., that aggregate and market data profiling the behavior of individual consumers.

The third-party data aggregators capture substantial information regarding a range of online and offline consumer activities and interests including the products and brands most frequently purchased by consumers.  They acquire this type of data through a variety of means, including access to information regarding company and product loyalty-card memberships.

Facebook and other online services possess substantial information regarding the online activities of individual consumers.  The partnership between Facebook and third-party data aggregators enables advertisers to access a more complete picture of consumer interests and behavior by bridging information about their online and offline activities.

This more comprehensive data aggregation and analysis enables advertisers to identify significant information with respect to individual consumers.  That information includes: 1.) comprehensive Web browsing history; 2.) retail purchase history for both online and offline purchases; 3.) the type of phone used; and 4.) the places where the consumer has shopped (both online and offline).

This system also enables advertisers to incorporate publicly accessible databases into their analyses of consumer behavior and their advertising programs.  For example, advertisers can use public databases to identify the type of car you own or the assessed value of your home, and use that information in their efforts to target advertising.

Some observers consider the ever-expanding data aggregation and analysis efforts applied to consumer information to be a significant threat to personal privacy.  The Center for Digital Democracy has, for example, reportedly requested that the Federal Trade Commission investigate this Facebook advertising initiative.

Although the NSA surveillance controversy and aggressive commercial data collection programs such as Facebook’s initially seem to be different aspects of the overall privacy debate, they are connected.  There is, for example, no reason why the U.S. government could not participate in expansive commercial data collection and analysis programs already operated by Facebook and other parties.

Commercial companies such as General Motors are using data collection and analysis tools offered by online services and third-party consumer data aggregators to learn more about individuals.  Government law enforcement and national security agencies could easily make use of those same resources.

Many observers see broad communications surveillance by the NSA and other government authorities as a troubling threat to civil liberties.  Others view widespread collection and sharing of personal information for commercial purposes to be an unwarranted threat to privacy.

Consider the implications when those two major threats merge.  If General Motors can identify where you shop and what you purchase, so too can the U.S. government.  In this environment, it is time for a comprehensive policy discussion of privacy, commercial use of personal information, and national security.  That discussion is of vital importance and is long overdue.