The New Enemy of Privacy: Big Bucks

Challenge, May, 2000 by Amital Etzioni

Once we were threatened by public intrusion on our privacy. Now, it is the intrusion of private business that threatens our privacy, the author argues.

THE evidence presented here points to a conclusion that is both obvious and often ignored--that currently the main danger to privacy for people who live in free democratic societies comes from the private sector, not the government; Big Bucks, not Big Brother. This danger is highlighted by the sources of systematic, authorized abuse of personal information, as distinct from occasional unauthorized use of such information by some rogue employee or merchant. It is further supported by an examination of the lineup of those who oppose new measures seeking to protect privacy in general and medical privacy in particular.

Progressive people have long viewed the government as the enemy of privacy. It has been shown that, in the J. Edgar Hoover age, the FBI and local police forces often opened the mail and tapped the phones of civil rights leaders and antiwar activists. The American Civil Liberties Union (ACLU) protests programs of mandatory drug testing and searches of school lockers by local authorities. Cyber-libertarians vigorously object to government demands to obtain "keys" to privately encrypted messages. Above all, privacy--like our other basic rights--defends individual liberty from the government. In recent years, though, privacy has been not so much diminished as stripped away by privacy merchants, who make a hefty profit selling privacy-violating information.

Privacy Merchants

Privacy merchants come in two basic varieties. The first comprises those corporations that specialize in this area, whose only line of business is gathering and marketing personal information (not to be confused with statistical information that deals with groups of people but as a rule does not enable the buyer to violate the privacy of those encompassed). Major privacy merchants are Trans Union, Equifax, and Experian, which keep tabs on the credit histories (as well as addresses and social security numbers) of millions of Americans. Indeed, these three corporations are reported to maintain files on more than 90 percent of adult Americans.

The second category encompasses corporations that collect personal information about their own clients and use it either for their own marketing (e.g., Amazon.com) or sell it to others for their marketing purposes (e.g., NationsBank, L.L. Bean, Macy's, FTD florist). These corporations often use technological devices known as "cookies" that are planted on one's hard drive to allow the Web site owner to track sites visited, purchases made, and other information. Cookies allow marketers to recognize a person's computer when its operator accesses their Web site again and to tailor advertising to that person. Some ask the permission of their customers to collect information about them; many do not.

I first stumbled upon privacy merchants when I started editing a quarterly journal, The Responsive Community, about the same time as American Prospect was launched. Like other magazine publishers, I purchased lists of subscribers to existing publications from list brokers such as the American List Council, Metromail, and Database America. These lists were then used to solicit people to subscribe to our publication. I did not realize at the time that, aside from adding a bit to their junk mail, I could have used the same lists to find out who subscribes to far-right, far-left, or pornographic magazines.

There are more than thirty thousand commercially available lists on every conceivable kind of things people purchase or do in North America, profiling more than 100 million businesses and consumers, according to Edith Roman Associates, a names list broker.

List Brokers Inc. of San Antonio maintains homeowner lists containing millions of records pertaining just to the state of Texas. The lists contain information on the age of homes, their square footage, and the age and marital status of the occupant(s). The company's "occupant lists" of deliverable residence addresses also include income level.

Three of the major corporations that administer prescription data in the United States are PCS Health Systems, owned by Eli Lilly & Co., Merck-Medco, and Diversified Pharmaceutical Services, a SmithKline Beecham company. These companies use patients' prescription and personal data to market drugs; for example, to urge doctors to switch their patients to drugs these companies sell or to advertise drugs directly to consumers so they will ask their doctors about them by name. Merck-Medco covers more than 51 million people and manages more than 291 million prescriptions for clients. PCS Health Systems covers approximately 56 million people and maintains a database of 1.5 billion prescriptions.

CMG Information Services maintains a product/service called Engage. Several large commercial sites on the Web have agreed to feed information about their customers' reading, shopping, and entertainment habits into the Engage system.