As Online Tracking of Consumer Behavior Gains Sophistication, Privacy Issues Arise
Insurance Experts' Forum, September 13, 2011
Anyone who has seen the sci-fi film Minority Report will remember the surreal sequence in which the film’s hero—having had the eyes of a dead man transplanted into his own head to avoid being identified via retinal scan—walks through a futuristic shopping mall. As the retail systems scan his new eyes, he is automatically offered multiple enticements to buy products based on the information stored about the deceased eye donor.
Of course, that scenario is not yet a reality, but it could be. In fact, with online information gathering capabilities growing more sophisticated, such a “scan” to gather consumer preferences may take place any time a consumer logs on to the Web. As you might imagine, such a possibility is of great concern to privacy advocacy groups like the Transatlantic Consumer Dialogue, which describes itself as “a forum of US and EU consumer organizations which develops and agrees on joint consumer policy recommendations to the US government and the European Union.”
In a recent letter to the EU’s Article 29 Working Party and the US Federal Trade Commission, the group expresses great concern that European and US consumers are “offered limited [opt-in or opt-out] options based on principles crafted by the digital marketing industry and enforced by groups that do not represent consumers.” They note that “graphical icons” are the prime means of alerting consumers to their choice to opt in or out of a particular web site's offering, but say such icons are often not used and provide “insufficient notice” to consumers about the widespread data collection to which they may agree.
The larger debate it seems is over whether or not Online Behavioral Advertising (pushing out ads based on the consumer’s previous web surfing behavior) is actually taking advantage of the consumer’s personal and private information. For insurers, agents and many others, it is indeed tempting to place cookies on the computers of visitors that will accomplish such tracking and report information back that can be used to sell services or products. In these times of continuing recessions and tight markets, we look for any edge we can find. Yet it is also reasonable to assume that many, if not most consumers will resent having their shopping and surfing habits tracked and reported to commercial entities.
This is unexplored territory for everyone, so it’s easy to get lost amid the technology, the personal benefits to consumers, alleged privacy protections and possible misuse of such information for criminal purposes. To get a clearer picture, let’s put it in the context of an older communications method that can also be used for commercial purposes—the telephone. Suppose that every time we made a call, all the information about that call—the recipient, the day and time, everything that was said—was recorded by some commercial entity that either used the information to call us with offers or sold it to others for the same purpose.
It’s probably safe to say that most of us wouldn’t be terribly delighted with such a situation, yet that is in essence what is happening when information is gathered online. Communication may be happening through a keyboard or mouse rather than a handset, but in both cases, we are talking about communication that is being undertaken for a specific purpose—not an offer to make our private doings public.
In insurance terms, if we call our auto carrier to report an accident, do we want someone to be able to pass that information on to auto body shops or to ambulance-chasing attorneys who can then hound us? Of course I can’t answer for everyone, but for me that answer would definitely be negative—and I would be shocked if my agent asked, “Do you mind if I share your accident information with some lawyers and auto body shops so they can call you?”
I have no doubt that consumers will make themselves heard on these issues. My only hope is that politicians will tune out commercial lobbyists long enough to hear the concerns of the buying public.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.
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