The Death of Privacy

Debra D'Agostino writes, "Why don't companies care about privacy? Because there's not enough money to be made from securing sensitive customer information, says Jeff Rothfeder in an article posted recently at CIO Insight. Furthermore, there's not enough money to be lost in privacy breaches for companies to care. 'Most companies claim that privacy is a priority — chiefly because they believe consumers are more willing to do repeat business with them if personal information is carefully handled,' he writes. 'But in reality, many companies are woefully inept at protecting privacy.'"

Comments

Why is this surprising?

[voice_of_all_reason]

Our economic system is based on the idea of "profit at all costs." I mean, isn't this what we wanted and fought the cold war for?

Re:Why is this surprising?

[HateBreeder]

"at all costs" ... within the boundaries of the law.

Coming from a country where most of the major infrastructure (electricity, telephone, water... etc) is owned by the goverment,
I can tell you one thing for certain - Capitalism is an increadible proccess optimizer. A competitive market's benifits overcome it's limitations by several orders of a magnitude.

If that's what you fought the cold war for ... then it was worth every effort.

Re:Why is this surprising?

[Snarfangel]

Our economic system is based on the idea of "profit at all costs." I mean, isn't this what we wanted and fought the cold war for?

That's because companies are able to externalize costs, meaning that the cost is paid by others. The trick is to make them internalize costs, via legislation if necessary -- if I suffer losses because they don't protect my info, they should pay the entire cost for my time, money, and inconvenience.

Re:Why is this surprising?

[rolfwind]

Privacy shouldn't be such a concern with most businesses one deals with (exceptions such as the doctor and ATT should but don't always apply) because you would have the option of telling them nothing and therefore they couldn't sell it (it always astounds me how much info people give out @ radio shack's checkout - i tell them to fuck off unless they want to lose a sale) except that they demand and verify information based on numbers (SSN primarily) that were never designed for such a purposes to do certain transactions.

The EU has much better privacy laws in this regard and it is correct to impose this if I as a consumer have no choice in what info I have to give out to even get service.

It disturbs me on how much damage that can be done to someone simply by knowing their SSN and a few pieces of publicly verifiable data.

Re:Why is this surprising?

[symbolic]

Capitalism is an increadible proccess optimizer. A competitive market's benifits overcome it's limitations by several orders of a magnitude.

This is true only when competition allowed to occur. The standard m.o. seems to be that existng monopolies do whatever they can to raise the barrier of entry for competing entities - either through protectionist legislation or other means. The latest blight on this landscape exists in the form of software patents, but there are others - for instance, the extension of the copyright.

well, duh

[oohshiny]

Why don't companies care about privacy? Because there's not enough money to be made from securing sensitive customer information, says Jeff Rothfeder

Well, duh. Does he have any other brilliant insights? Like that there's not enough money to be made from decent working conditions, proper financial disclosures, or from protecting the environment?

That's why we have laws and penalties. What we need is stiffer penalties for privacy violations by companies. And, unlike child pornographers and murderers, who tend to be insensitive to the potential penalties, companies really do respond to penalties that hurt the bottom line.

Re:well, duh

[compro01]

That's why we have laws and penalties. What we need is stiffer penalties for privacy violations by companies. And, unlike child pornographers and murderers, who tend to be insensitive to the potential penalties, companies really do respond to penalties that hurt the bottom line.

and why exactly whould the government (willingly) create laws against that when they can make such handy use of the corperate data collection?

and since the vast majority of the people simply don't seem to care, the government won't be force to create/enforce such laws.

Consumers don't care about their privacy

[HateBreeder]

... So why should corportations?

Most Consumers, barely consider privacy implications when purchasing software or signing up for services.
Most Consumers, will easily hand out their personal information when signing up to a service, as long as it does a good job at providing it.

See for instance, GMail.
A privacy nightmare, yet it's a damn good web-mail service.
Most people won't bother with privacy. period. ... Do You own a GMail account?

Re:Consumers don't care about their privacy

[RAMMS EIN]

And while we're on the topic of email and privacy, are people aware that SMTP and POP3 and IMAP all transmit messages in the clear, and POP3 and IMAP will do the same for your password? Email has so many problems that sometimes, I wonder why we're still using it.

Ob. Scott McNealy

[thatguywhoiam]

"You have no privacy. Get over it."

While I think he's right about the privacy part, I have no intention of getting over it, now or ever.

Meh

[Anonymous Coward]

They're not inept in the least. In a marketplace like ours where "competition" often means that you have a couple of choices in an oligarchy, if you're lucky, there's no reason to satisfy customer demands.

Consider this particular case: I used to work at a company that had a very large call center staffed. The call center, from the business perspective, was a cost liability only. It provided no income.

One might argue that it's job is the maintain income by satisfying customers, but as it turned out our customer turnover and return rate was so high that it actually benefited us to ABUSE customers to make them get off the phone. Simple economics showed that it cost us more to help people than to chase them away, so, with the exception of a handful of particularly loyal buyers, we did just that. We enacted policies that basically encouraged our "service" reps to force people off the phone as fast as possible (either service them in under two and half minutes, or lose your job). We didn't staff the call center that well because if you don't show the abandonment numbers, you can make yourself look really good by pointing out how fast you handled the actual calls that come through. And if someone gets angry enough to cancel, just do it and don't worry about it, because three other suckers will be attracted by the low price "deals" to replace him.

Until consumers wise up and stop chasing bargains to whatever poor quality store has them and starts demanding a return of actual service and respect, they're not going to get any of their demands met and they're not going to get any respect. Simple matter of economics: it costs them less to abuse consumers because nobody cares about the overall product, including service, they just think "value" starts and stops at "lowest price".

Consumers get the level of service, privacy, etc. they pay for, and since all they care about is how little they pay, that's how little of each of those things they get.

democracy breaks down at around 1e7

[Speare]

I've noticed that democratically controlled systems, or the corporate equivalent of "vote with your dollars," breaks down when the population gets between 1e7 and 1e8. Suddenly, the political parties have become somewhat desensitized or even immune to the feedback for their outrageous actions. Corporations can essentially ignore pretty much any sort of public relations fiasco, since a boycott can't possibly raise enough countervotes to seriously impact the bottom line.

Honestly, at this point, if you said that Sam Walton's heirs, the Olsen Twins, and Dick Cheney were found in a secret lovenest in an undisclosed location in Tora Bora, writing a draft of USAPATRIOT ACT III which says that shoplifters were terrorists and should be buried under a hill of depleted uranium razorblades, there would be a five day story on the news and a 1% drop in poll/profit numbers, then it would be off to the next "scandal."

Communism vs crony Capitalism

[Travoltus]

Capitalism really peaked in the 1960s when respect for the middle/working class - the center of any free market economy - was at its zenith.

Since then, we've been on a long descent into crony capitalism in which corporations receive billions of dollars in welfare / bankruptcy bailouts while single parents are demonized as the destruction of society. Corporation lobbyist dollars and campaign contributions now trump votes and letters/calls from regular citizens. Corporations pollute our waters and air and aren't held liable to the people they make sick or even kill. Corporations buy politicians and laws at will, and they're getting more and more efficient at brushing aside the will of the majority.

In America, the rich are now glorified and the poor are demonized. This is absolutely positively a direct contradiction to America's much vaunted "Judeo Christian" values.

There is no God any more in the eyes of corporate America... only money.

Corporations trade your personal information and the free trade of your private information is essential to their bottom line, even more surely than free mp3's are desired by the common terrori^H^H^H^H^H^H^Hmp3 pirate. If corporations - specifically marketers - could have it their way, all your transactions and whereabouts would be public information.

The old evil empire was communism, which sacrificed individuals to the state.

Capitalism fails miserably when it crosses the "profits over people" line, as it sacrifices the individual to the corporation.

What saves the Western world is DEMOCRACY, far more than capitalism. And when DEMOCRACY is threatened, as it is being threatened by the corporate state right now, neither capitalism nor communism can save you.