Digital Identity

Privacy Pragmatism

The debate over RFID illustrates the great irony of privacy. As someone who's been involved in online commerce and services for over a decade, I've found that while everyone cares about privacy in the abstract, they're usually willing to trade their personal data for the most trivial of benefits. A cynic would say that this is because people don't really understand digital identity and how their privacy can be eroded, but I think that most people make rational choices. People willingly choose to share personal data if there is a payoff that they understand.

Here's an example: if you've been to a grocery store, you're familiar with their "preferred customer" cards. The premise is simple: scan the card, get a discount. Groceries stores do this, of course, so that they can tie customer identities to purchasing habits—very valuable data for a company looking to drive sales and establish loyalty. Even the most hardened privacy warriors are likely to succumb to a large rebate offer on a TV or a computer and send in the rebate form in order to capture the savings.

While the U.S. has its share of privacy advocates, it has been slow to adopt many of the privacy safeguards that have found a home in Europe and elsewhere (the next section will explore the exceptions). The hesitancy has been partly based on free speech concerns, but often, it is because U.S. legislatures are loath to take action that will have negative impact on business development. Again, the cynic would say that business has bought off the legislative process, but from my experience, both in the private and public sectors, the reason has more to do with legislative concern about regulatory burdens making U.S. industry less competitive.

Even with the pragmatic attitudes of consumers and the business-friendly climate promoted by many legislatures, your organization should be very careful in handling the personal data of employees and customers and the private information of partners and suppliers. While it's true that customers are usually willing to trade identity information for some benefit, they react with anger when they feel like they've had their identity data "stolen." Likewise, legislatures sometimes react with ill-conceived legislation when pressed by anecdotes regarding identity theft, fraud, and misbehaving companies.