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The Best Protector of Privacy Online: Market Competition

By Sidney Hill E-Commerce Times ECT News Network
Aug 26, 2011 5:00 AM PT

Online privacy was in the news again this week -- and Facebook, not surprisingly, figured prominently in many of the stories.

The Best Protector of Privacy Online: Market Competition

What was surprising, however, was that Facebook wasn't being castigated for implementing some new policy that made it appear the social networking giant was trampling users' privacy rights in its rush to tap new revenue streams.

The role of privacy-robbing villain was being played -- at least this week -- by comScore, a Web information broker. ComScore collects data on Web-browsing habits by getting users to agree to let the firm track their activity in exchange for free software or sweepstakes entries.

ComScore sells the data it collects to some of the world's largest businesses -- including high-tech companies like Microsoft, Yahoo and Facebook.

On its site, comScore acknowledges that it monitors all Internet activity of consumers who agree to participate in its data-collection programs -- including the acts of filling online shopping carts, completing application forms and checking online accounts.

Data-Collection Lawsuit

In the process of tracking this activity, a user's credit card or other account numbers may be collected, the firms warns, adding that "when this happens, we make commercially viable efforts to purge our database of such information."

Now, a lawsuit filed by Edelson McGuire alleges comScore is routinely collecting much more personal information that it admits to on its site, and maintains it does nothing to purge this information from its files. The suit, at least to my knowledge, does not say what comScore is doing with all this highly personal data.

For its part, comScore says the lawsuit is without merit and rife with factual errors in regard to its business, and that it intends to aggressively defend itself against this action.

ComScore -- as its customer list suggests -- is a highly regarded source of information on how the general public uses the Internet and related technology. I've relied on ComScore data on several occasions when doing research for articles related to social media usage, and I've never had reason to doubt the veracity of its findings.

I have no knowledge of the inner workings of ComScore, however. So, I have no way of knowing exactly what data it collects from users -- or what it does with the data it obtains.

An Ongoing Issue

I'm inclined to believe ComScore ultimately will be vindicated in this matter. But that won't stop us from hearing more about the issue of online privacy.

In fact, the subject of online privacy figures to become more contentious as the competition to identify and secure new sources of online revenue intensifies over time.

The good news for consumers is that marketplace competition -- not government regulation -- is the only thing that will offer users any sort of protection from truly abusive privacy practices on the part of Web companies.

If you doubt that, consider what Facebook did this week.

While ComScore was being accused of dirty data-collection tactics, Facebook was unveiling a host of new features that give its users more control over what information appears in their Facebook profiles.

Google+ on the Scene

For at least the past two years, Facebook has been hammered from nearly every direction -- by consumer advocacy groups, the media and Congress -- about its seemingly cavalier attitude toward protecting user privacy. It was obvious that Facebook needed its users to share as much information as possible so it could sell that information to potential advertisers. It also was evident that since Facebook had no real competition, it had no need to heed the calls for protecting user privacy.

That was before Google+ debuted. This new social network is geared toward allowing users to control exactly what information they share with specific individuals. By creating "circles" on Google+, users can separate their personal lives from their professional lives -- and even create tighter, private groups within those segments. Social networking no longer means automatically sharing your entire life with the global village.

After watching Google+ attract 20 million members in its first two months of operation, Facebook is now addressing many longstanding complaints regarding the lack of privacy on its network.

Your Home on the Web

"Your profile should feel like your home on the web -- you should never feel like stuff appears there that you don't want, and you should never wonder who sees what's there," said Richard Cox, Facebook's director of product, in a blog introducing new features the company started rolling out Tuesday.

"The profile is getting some new tools that give you clearer, more consistent controls over how photos and posts get added to it, and who can see everything that lives there," Cox added, before listing the new features, which mimic much of what's in Google+.

The major changes involve allowing users to set privacy settings as they are posting items on the site, rather than having to go to a separate page, as well as being able to change those settings after an item has been posted.

With the new features, for instance, a user can determine exactly who in their network can view a post rather than have it automatically go out to the world. Even more important, from a privacy standpoint, is a host of features that give users at least some control over what information other users are allowed to post about them.

These Should Be Standard Features

As I reviewed the new features, many of them struck me as no-brainers that should have been standard in the first place -- such as the ability to see how something you post appears on the actual Facebook site. Then again, there was no reason for Facebook to help users' manage their online image.

With only 20 million users, Google+ has a long way to go to offer any real competitive challenge to Facebook. Still, we're seeing how powerful even the threat of competition can be in changing a company's behavior.

Anyone who's concerned about online privacy should hope that Google+ can become a real social networking force.


E-Commerce Times columnist Sidney Hill has been writing about business and technology trends for more than two decades. In addition to his work as a freelance journalist, he operates an independent marketing communications consulting firm. You can connect with Hill through his website.


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