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Tech Leaders: Consumers Need More Protection Online

5:25 PM -- ASPEN, Colo. -- TPI Aspen Forum -- Even though consumers may be too busy posting on Facebook to care right now, there is an intense debate among government and business leaders on how to best protect the online data and activities of individuals.

Online data sharing is rampant across personal and economic online activities, and the possibilities for great harm from security breaches -- or the loss of business from a loss of consumer trust -- have American regulators and corporations involved in the market actively seeking better frameworks for online protections. While discussions here at the Technology Policy Institute’s Aspen Forum exposed many important facets of online privacy, what is still most unclear is:

  • What data matter most to consumers?
  • What needs to be protected?
  • What can be shared?

While business leaders like Experian North America CEO Victor Nichols see Americans' general willingness to share information online as a "secret ingredient" fueling the ongoing resilience of the U.S. economy, regulators are wary of the harm that might come from moving forward faster without clear privacy and security guidelines in place.

"We need to know more than we now know about what [types] of data tracking customers care about," says Federal Trade Commission Commissioner J. Thomas Rosch, during a panel discussion about information and privacy. "I’m not sure we have information on how consumers feel [about data collection practices]." To that end, Rosch floated the idea of having online advertising network officials answer questions under oath about their practices, so that regulators and individuals could understand exactly what data might be collected and how it could be used.

"That’s superior to acting blindly," Rosch says.

While the business leaders present unsurprisingly touted their own initiatives as the best way to move forward quickly -- "Businesses shouldn’t wait for government, we should self-regulate and make privacy a core part of customer service," said Experian’s Nichols -- they also admitted in part that individuals today mainly ignore legal privacy advisories or even simple online customer controls.

Google (Nasdaq: GOOG) Chief Economist Hal Varian, for example, touted during the panel discussion the ability for Gmail users to customize which ads they see and how other mail data is used -- but then said afterward that the total of Gmail users taking advantage of such controls "is a small number." Several panelists noted that different types of online activities spur different levels of concern, which almost everyone present said makes it harder to establish hard-and-fast guidelines.

"You may not know it, but when you search travel sites online you’re putting yourself in an auction where advertisers are competing for your attention," said Microsoft Corp. (Nasdaq: MSFT) Chief Economist Susan Athey. But, she added, it "may not be worth the investment" of an individual's time to care about where their data is being used from a casual search about airline fares. What’s needed, Athey said, is a better way to communicate security concerns to consumers than “a page of legalese that nobody reads.”

And even as millions of Americans do things online today without much concern about how their data or activities are tracked and used, with clear controls and protections in place more consumers and more businesses could join the online world, bolstered by the confidence such protections could provide.

“The government has a key role in articulating what the concerns and rights ought to be,” said Daniel Weitzner, deputy chief technology officer for Internet policy in the White House Office of Science and Technology Policy, who sees the market at a “maturation point” in need of some better guidance. While admitting that the current lack of any such set of rules “doesn’t keep people off the Internet,” Weitzner said the Obama administration also doesn’t think that industry self-regulation is doing enough in the area of privacy and protection, so instead proposes the idea of new laws to give companies and individuals more confidence to conduct more business online.

“The current system has a fair amount of uncertainty -- often there is no clear place to get answers,” said Weitzner. “I don’t think you can say self-regulation is enough. An additional step is called for.”

— Paul Kapustka is the founder and editor of Sidecut Reports, a Wireless analysis site and research service. He can be reached at [email protected]. Special to Light Reading.

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