Here’s how tech giants profit from invading our privacy, and how we can start taking it back
Your online activity can be turned into an intimate portrait of your life – and used for profit.
Australia’s consumer watchdog has recommended major changes to our consumer protection and privacy laws. If these reforms are adopted, consumers will have much more say about how we deal with Google, Facebook, and other businesses.
The proposals include a right to request erasure of our information; choices about whether we are tracked online and offline; potential penalties of A$10 million or more for companies that misuse our information or impose unfair privacy terms; and default settings that favour privacy.
The report from the Australian Competition and Consumer Commission (ACCC) says consumers have growing concerns about the often invisible ways companies track us and disclose our information to third parties. At the same time, many consumers find privacy policies almost impossible to understand and feel they have no choice but to accept.
My latest research paper details how companies that trade in our personal data have incentives to conceal their true practices, so they can use vast quantities of data about us for profit without pushback from consumers. This can preserve companies’ market power, cause harm to consumers, and make it harder for other companies to compete on improved privacy.
Privacy policies are broken
The ACCC report points out that privacy policies tend to be long, complex, hard to navigate, and often create obstacles to opting out of intrusive practices. Many of them are not informing consumers about what actually happens to their information or providing real choices.
Many consumers are unaware, for example, that Facebook can track their activity online when they are logged out, or even if they are not a Facebook user.
Some privacy policies are outright misleading. Last month, the US Federal Trade Commission settled with Facebook on a US$5 billion fine as a penalty for repeatedly misleading users about the fact that personal information could be accessed by third-party apps without the user’s consent, if a user’s Facebook “friend” gave consent.
If this fine sounds large, bear in mind that Facebook’s share price went up after the FTC approved the settlement.
The ACCC is now investigating privacy representations by Google and Facebook under the Australian Consumer Law, and has taken action against the medical appointment booking app Health Engine for allegedly misleading patients while it was selling their information to insurance brokers.
Nothing to hide…?
Consumers generally have very little idea about what information about them is actually collected online or disclosed to other companies, and how that can work to their disadvantage.
A recent report by the Consumer Policy Research Centre explained how companies most of us have never heard of – data aggregators, data brokers, data analysts, and so on – are trading in our personal information. These companies often collect thousands of data points on individuals from various companies we deal with, and use them to provide information about us to companies and political parties.
Data companies have sorted consumers into lists on the basis of sensitive details about their lifestyles, personal politics and even medical conditions, as revealed by reports by the ACCC and the US Federal Trade Commission. Say you’re a keen jogger, worried about your cholesterol, with broadly progressive political views and a particular interest in climate change – data companies know all this about you and much more besides.
So what, you might ask. If you’ve nothing to hide, you’ve nothing to lose, right? Not so. The more our personal information is collected, stored and disclosed to new parties, the more our risk of harm increases.
Potential harms include fraud and identity theft (suffered by 1 in 10 Australians); being charged higher retail prices, insurance premiums or interest rates on the basis of our online behaviour; and having our information combined with information from other sources to reveal intimate details about our health, financial status, relationships, political views, and even sexual activity.