PRIVACY ISSUES IN THENETWORKED ECONOMY

- BY SONIA TAKOO

Why has privacy become an important issue in the networked economy?

As the national and international community has increasingly begun to depend on the Internet and Web for commerce and information, protecting personal information has become a greater concern.

Identity theft is a crime of growing proportions that attacks privacy at its very core, by stealing identities.

• Employee’s Concern- be aware of why your company may want to monitor employee computer use and what your privacy rights are. • Consumer’s Concern - you should know why your company needs to collect data on its customers

• Privacy is freedom from unauthorized intrusion.

• Privacy is often confused with confidentiality, but privacy isbroader because confidentiality involves protecting already acquired information from outside intrusion.

• Privacy usually falls under the broader aegis of common law, meaning that it is considered to be a given right that does not need to be guaranteed by a constitution.

• Information technology has opened new avenues for organizations to gather personal data on users. Tremendous amounts of personal data can be stored on modern database servers and then matched with data on other databases in a matter of seconds to create a very complete picture of groups of consumers or even of individual consumers.

C a t e g o r y D a t a b a s eGovernment data Crime databases, immigration records, tax records,

Social Securityrecords, welfare records, and armed forces records

Public data Marriage and divorce proceedings, bankruptcy filings, voting registrations, property taxes, land titles, birth and death records, occupational licenses, hunting and fishing licenses, and court records

Organizational data

Company personnel files, including intelligence, aptitude and personality tests, and supervisor appraisals Political party and club membership lists

Medical data Hospital stay, doctor visit, and pharmacy recordsPsychiatric and mental health records Insurance records Workers' compensation records

The Changing Nature of Privacy

Aspect of Privacy

Industrial Economy

Network Economy

Searchabilily Difficult EasyProtection Little MuchIntegration Very little Moderate

Privacy Trade – off’sPrivacy in the networked economy is an evolving issue, with at least two sides to it.On the one hand, no one wants to have his or her privacy intruded upon without permission. On the other hand, a number of studies have shown that implementingstringent privacy restrictions would negatively affect both individuals and the economy as a whole. Examples…

• Information enables retailers to direct their advertising to likely customers through techniques as customer relationship management (CRM). Such narrow advertising campaigns are more cost effective than broad advertising campaigns, with the customer receiving the benefitsof the cost savings.

• High mortgage rates and fewer loans might result if lenders had less access to credit information. They would have to increase their rates to account for failed loans or refuse more loan applications.

• Without the free flow of information, many of the free sites might have to charge for their services.

• e-commerce is predicted to grow rapidly over the next few years. Business and industry constantly strive to create Web sites that will attract customers and other stakeholders. One technique involves mass customization (customizing the Web site to each visitor by learning about the visitor's preferences.) They can do so by asking for information about the visitor or by tracking the visitor's purchases and learning about his or her buying habits. In either case, an organization must create profiles of its Web customers.

Data and Information Collection Using IT• Transactional Data :- Data that are created when a transaction takes place that requires the customer to reveal his or her identity. This type of event usually involves face-to-face point-of-sale, telephone, mail, or Web transactions as well as travel, credit, or communication services.

In addition to transactional data generated by consumer purchases, data are often collected on employees who handle telephone purchases or deal with customer service questions. In this practice, commonly referred to as electronic supervision or computer monitoring, managers use software on the network server to monitor the amount of work performed by employees on networked computers in terms of entering data, making reservations, dealing with customer questions, and so on.

• Web - Visit Data :- Web-visit data include data that are unique to the Web, in that a transaction in the traditional sense of the word does not have to occur. Any visit to a Web site generates a great deal of data about the user's computer.

• Internet Communications Data :- This data includes e-mail messages, conversations in chat rooms, postings to bulletin boards, and messages to newsgroups. These data are unstructured because they are not organized into database form.

Threats to Privacy

Ways to Protect your Privacy

ETHICAL ISSUES IN THENETWORKED ECONOMY

All cultures and economies have developed rules about whether certain acts are "good" or "bad," or "right" or "wrong."These rules, known as ethics, are inherently value judgments that have resulted from a consensus in society. Such rules are often expressed or supported by laws.

Ten Commandments of Computer Ethics

Review Questions1. What trade-offs are associated with more

stringent laws regarding personal privacy? Give an example.

2. What is spyware, and how is it often installed on a computer?

3. What is a Web bug? How does it collect data?

4. Why do we say that Internet communications data are unstructured? Does this statement mean they cannot be searched or integrated with other data?