Magazine article Newsweek

Getting Personal: Online Shoppers Will Spend Nearly $10 Billion This Holiday Season. They'll Surrender Some of Their Privacy along with the Cash

Magazine article Newsweek

Getting Personal: Online Shoppers Will Spend Nearly $10 Billion This Holiday Season. They'll Surrender Some of Their Privacy along with the Cash

Article excerpt

If you're like me, the notion of personal privacy is lodged in the part of your brain where the fight-or-flight reflex lives. Privacy is something I think about only when I get a telemarketing call in the middle of dinner or a creepy piece of e-mail spam. Mostly, I take it for granted. I walk into a bookstore, toss down some cash, take my package and walk out. I assume that there's no way for the bookstore, or anyone else for that matter, to trace the transaction back to me.

But if it were an online bookstore, from a privacy standpoint, I'd be hosed. Going on silently, invisibly behind the scenes, is something called online profiling. It's a technology used by many of your favorite online destinations as well as the companies who place banner advertisements there. As you click your way through a Web site, a powerful software program running on a massive computer is watching and taking meticulous notes. Says privacy expert Andrew Shen: "The offline equivalent of online profiling was if someone was following you around the mall all day, keeping track of what stores you went into, what items you looked at and tried on, which items you purchased, when you entered the mall, when you left. Everything."

Online profiling may seem threatening, but it needn't force you to give up the advantages of e-commerce. Like most technologies, it has good uses and bad. Advertisers put a positive spin on the practice, saying it helps them to better target ads, so that relevant sales pitches may find their way to your desktop--such as a low-priced airfare to Hawaii while you're searching through a travel site for vacation bargains. Online stores say that it helps them improve the shopping experience.

No one is yet alleging that reputable e-commerce merchants are using this technology to spy on people or manipulate them--even in two class-action lawsuits brought this month against RealNetworks, a Seattle-based software company. RealNetworks has been accused of surreptitiously tracking the music-listening habits of its users through a program that 13 million people had downloaded for free from its Web site. Privacy advocates say that collecting data wasn't the problem; it was the company's failure to inform its users. To its credit, RealNetworks quickly issued an apology and a software fix.

Still, many people were unnerved by the discovery that the popular RealNetworks had the technological resources to gather the data without anyone's knowing. "Online profiling is just so invisible," says Shen, a policy expert with the Electronic Privacy Information Center in Washington, D.C. "Most people are not aware that this information is collected from them." And if you don't know it's happening, the thinking goes, you can't make an educated choice about whether you want give up your personal information in order to participate.

Data collection about your online behavior and personal identity happens in a number of ways on the Web. Most consumers understand that when they go to an e-commerce site and fill out a form (name, address, e-mail) those bits of information are stored somewhere in a database that belongs to the e-commerce merchant. How Web sites will use this information, as well as the below-the-surface traffic surveillance that might be happening, is what's supposed to be covered in its privacy policy (chart). You can generally trust these policies, but watch for language that lets merchants change their minds in the future.

The real scourge, some say, is the data-collection practices of online advertising companies. The main way they get access to you is through the banner ads on Web sites. In a vast majority of instances, the Web site that you visit isn't the source of the banner ad that appears at the top of the page. …

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