The Reinvention of Privacy

It used to be that business and technology were considered the enemies of privacy. Not anymore
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Illustration by Carter Goodrich

A relatively unsung virtue of the U.S. Patent and Trademark Office is that its databases can be viewed collectively as a sort of cultural seismograph, registering interesting spikes of entrepreneurial enthusiasm. A patent application filed on January 10, 1995, is part of one such spike. Issued as U.S. Patent 5,629,678 ("Personal tracking and recovery system"), the patent is summed up in an abstract that begins,

Apparatus for tracking and recovering humans utilizes an implantable transceiver incorporating a power supply and actuation system allowing the unit to remain implanted and functional for years without maintenance. The implanted transmitter may be remotely actuated, or actuated by the implantee. Power for the remote-activated receiver is generated electromechanically through the movement of body muscle. The device is small enough to be implanted in a child.

Until recently such an idea might have seemed better suited to science fiction or political allegory than to real life. But in December of 1999 the patent was acquired by a Florida-based company named Applied Digital Solutions, and it is now the basis of an identity-verification and remote-monitoring system that ADS calls Digital Angel. "We believe the potential global market for this device," ADS announces on its Web site, "could exceed $100 billion."

New surveillance and information-gathering technologies are everywhere these days, and they're setting off all sorts of alarm bells for those who worry about the erosion of privacy. The result has been a clangor of dire predictions. Books have recently appeared with such titles as Database Nation: The Death of Privacy in the 21st Century (by Simson Garfinkel), The Unwanted Gaze: The Destruction of Privacy in America (by Jeffrey Rosen), and The End of Privacy: How Total Surveillance Is Becoming a Reality (by Reg Whitaker). Polls suggest that the public is gravely concerned: a 1999 Wall Street Journal-NBC survey, for instance, indicated that privacy is the issue that concerns Americans most about the twenty-first century, ahead of overpopulation, racial tensions, and global warming. Politicians can't talk enough about privacy, and are rushing to pass laws to protect it. Increasingly, business and technology are seen as the culprits. "Over the next 50 years," the journalist Simson Garfinkel writes in Database Nation, "we will see new kinds of threats to privacy that don't find their roots in totalitarianism, but in capitalism, the free market, advanced technology, and the unbridled exchange of electronic information."

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There's a general sense, too, that businesses in the modern free market are indifferent to the threats their new technologies pose to privacy. That sense seemed powerfully confirmed in early 1999, when Scott McNealy, the chief executive officer of Sun Microsystems, was asked whether privacy safeguards had been built into a new computer-networking system that Sun had just released. McNealy responded that consumer-privacy issues were nothing but a "red herring," and went on to make a remark that still resonates. "You have zero privacy anyway," he snapped. "Get over it."

But something very interesting is happening: the market for goods and services that protect privacy is surging. Entrepreneurs are realizing that privacy and technology are not fundamentally at odds—and that, in fact, expectations of privacy have in large measure always been created or broadened by the arrival of new technologies. People are coming to accept the notion that the protection of privacy is a pervasive and lasting concern in the computer age—and that, indeed, it may turn out to be the true enabler of the information economy.

Companies old and new are getting into the business. The number of newly registered privacy-related trademarks and patents has risen dramatically in the past few years; they include everything from banking services and computer technologies to window treatments and even an independent software agent ("for protecting consumers' privacy") called Privacy Just Got Cool. Anonymous Web-browsing and e-mailing services are available from companies called Anonymizer, Hushmail, IDcide, PrivacyX, and ZipLip. An outfit called Disappearing has developed an e-mail system that allows users to send messages that permanently unwrite themselves after a previously specified amount of time. Sales of personal paper shredders are up. Personal bodyguards are increasingly in demand. American Express has just unveiled a system called Private Payments, which generates a random, unique card number for each online purchase. A California law firm now offers to prepare something it calls The Privacy Trust, which, it claims, "successfully conceals ownership of bank and brokerage accounts, the family home, rental properties, and interests in other entities." Money may soon begin to be "minted" solely in electronic form, creating "digital cash" that could make credit cards (and the data gathering they make possible) obsolete. There is serious talk of building privacy protection into the infrastructure of the Internet, and of using such protection, paradoxically, to make the flow of information freer than ever before.

Billions of dollars are at stake. A new sector of the economy seems to be coming into being. Among entrepreneurs and venture capitalists it already has a name. It's known as the privacy space.

The Decade of Tracking and Monitoring

The privacy debate is, essentially, a debate about the control of personal information. What's unsettling about Digital Angel, for example, is not that the remote electromechanical monitoring of a human being is possible. In fact, it's easy to see the potential benefits of such a technology: doctors and hospitals could use it to keep an unobtrusive twenty-four-hour watch on patients at home; military commanders could use it to monitor the exact locations of soldiers in battle. What is unsettling to a lot of people is the idea that personal data—in this case, one's very life signs—might be converted into information that could be exchanged, bought, or sold for secondary use without one's knowledge or consent. Conceivably, for instance, insurers or drug companies might pay a lot of money for access to the very specific information in hospitals' Digital Angel databases.

These examples are hypothetical, but the issue most certainly is not: there are plenty of ways in which personal data is already gathered and exchanged for secondary use. People give away vast amounts of valuable information about themselves, wittingly or unwittingly, by using credit cards, signing up for supermarket discount programs, joining frequent-flyer clubs, sending e-mail, browsing on the Internet, using electronic tollbooth passes, mailing in rebate forms, entering sweepstakes, and calling toll-free numbers. Such behaviors are essentially voluntary (although a somewhat abstract case can be made that they are the product of what has been called "the tyranny of convenience"), but many other ways of participating in everyday life basically require the divulging of information about oneself. A person can't function in American society without regularly using a Social Security number, which has become a de facto national ID number—and which, as such, is the key to all sorts of private information. If one needs a mortgage, as almost everybody buying a home does, one has to turn over pages of detailed background data, some of which banks can then sell to whomever they like. People who buy prescription drugs now leave a trail of highly sensitive (and therefore valuable) personal information that is often gathered up and sold. The proliferation of surveillance cameras in public places means that one's comings and goings are increasingly a matter of public record.

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