Inside 1to1:Privacy

Privacy Concerns Spark Innovations Among Companies, Startups

May 11, 2012

By Sean Lyons

It was after more than three years of secret phone calls and secret meetings with lawyers in secret places that Nick Merrill finally decided: The next time the FBI came knocking on his door demanding information, he'd make it so there wasn't any to give. 

It's taken another few years, but Merrill, who fought FBI demands that he turn over client records of his Internet service provider (ISP) without a court order--using a controversial program expanded by the federal government after 9/11--said his idea is becoming closer to a reality. 

His nonprofit Calyx Institute aims to create the first privacy-focused Internet and mobile phone service provider, using an encryption method that would make it all but impossible for any third party--whether it's the FBI or hackers--to track or gather any user's data on Calyx's infrastructure.      

"I think that people in a free democratic society have the right to privacy, the right to whisper," Merrill said. "It's part of an open society. We don't want to be an ISP but a PSP, a privacy service provider." 

Calyx, and at least one other Internet startup, the search engine DuckDuckGo (DDG), stand at the frontier of what experts say could be a new movement in online privacy, where protection won't be dependent upon an individual's technological savvy but instead is woven into every consumer's experience. 

"It's clear consumers are increasingly paying attention to privacy in a way they haven't previously," said Future of Privacy Forum Director Jules Polonetsky, CIPP/US. "In the last number of years, you see the investment community making the bet that consumers will use a privacy service when they are available, and it will be interesting to see what impact this new wave will have." 

Both Calyx and DuckDuckGo's leaders say they've benefited from recent controversies over privacy with "Big Internet," such as Google, which changed its policies so that users' information would be made available to other companies to better target their audience. 

Gabriel Weinstein, founder of DuckDuckGo, said the number of searches typed into DDG has more than doubled since the latest Google controversy erupted over the winter, now averaging about 45 million a month. That's far from the billions made on Google, but Weinstein said the growth has far exceeded his company's expectations. 

Calyx has seen a boost as well, with tens of thousands of dollars in donations pouring into the group. It's also received a travel grant from the Ford Foundation to help Merrill develop his plans. 

While both organizations streamline privacy for users, they pursue it in different ways. 

Unlike most search engines, DDG does not send users' search terms or their Internet protocol address--a sort of numeric thumbprint of their computer or mobile device--to any other website, and it does not keep users' search history so that it can be directly tied back to them. 

The company still makes money from ads shown in the results of a search, similar to Google, but those ads show up only because of the search terms in a particular query, not because of the users' identity. 

"Search engine companies get subpoenas for users' information all the time," Weinstein said. "Now I'm waiting for our first one so I can tell them we don't have anything to give them." 

DDG's privacy focus came as something of an afterthought. Weinstein created the engine with the aim to excel in searches where he believed Google failed. The online community of techies who tested the site gave its searches a thumbs-up after some tweaks. But they said if DDG wanted to be the anti-Google, it had to make privacy key. Weinstein went to work, and it has paid off: DDG was named one of the top websites of 2011 by TIME and PC Magazine, and it was voted Best Search Engine by readers at About.com. 

Calyx, on the other hand, plans on making its Internet system entirely free and encoded, effectively making any user's information and history anonymous. That means any third party--a hacker, Facebook, even the FBI--would not be able to track any information about the user. Merrill said law enforcement could still obtain users' information in other ways, such as placing a tracker on their computer keyboard. But the system would leave Calyx out of picture.

"We want to make it so that the customer owns its data," Merrill said, "not us." 

Merrill is still considering how to best market Calyx, but he said its initial market will likely be organizations particularly concerned about cybersecurity, such as companies trying to fight corporate espionage, or governmental agencies--perhaps even the FBI.

Polonetsky said while it's likely that some company providing "seamless privacy" will stake out some market share, it may not matter if they never become the Internet's "Next Big Thing."  

"What may be the most important thing is the pressure these businesses place upon the recognized brands already out there," Polonetsky said. "How broadly they influence the mainstream products. There's nothing that drives new features online more than competition."

Sean Lyons is a former newspaper journalist whose reporting has won numerous national awards, including the Livingston Award, the largest all-media general reporting prize in the country. He is the lead interviewer for a book and PBS special due out in 2013 examining the legacy of the Kennedy administration.