Inside 1to1:PrivacyPrivacy Advisor

Everything Old Is New Again

July 1, 2012

By Michael G. Leahy, CIPP/US

Over the last several years, there has been ever-increasing interest in finding an all-encompassing solution to the pervasive issue of managing online privacy. Concepts including "Privacy by Design" and prescriptions like the NAI's "Opt Out of Behavioral Advertising" are the latest attempts to address concerns about online privacy and thereby forestall the implementation of new regulatory regimes that could preclude information collection and the use of such advertising to address consumers' interests and needs more effectively and efficiently.

The difficulty with the currently proposed "market" methodologies and most regulatory schemes is that they potentially severely limit access to valuable information and they fail to inform data subjects about how they might rationally make a decision about sharing their personal information. Advertisers rightfully can point to the benefits of "tracking" and information collection for themselves and consumers. Regulators can rightfully point to the general public's disdain for exploring longwinded web privacy policies and notices and the popularity of the uninformed automatic response to click on an "accept" button with no consideration of the consequences of such action.

Consumers vacillate between demanding absolute privacy and expanded benefits from information collection. So, how do we address the seemingly intractable tension between these divergent and presumed opposing all-too-human demands about how to address online privacy concerns? The answer lies in our past and our decisions about how we chose to deal with a prior technical wonder--the development of inexpensive photography equipment and the publication of the resultant photographs.

I would submit that our most vexing concern about information collection and use is actually a "right of publicity" issue first and a privacy issue second. The "right of publicity" has been defined as the right to control the commercial use of one's identity. Elements of the "right to publicity" have generally included one's name, image and likeness, and although most cases addressing "right of publicity" issues are applied to celebrities, the right is generally considered to extend to every individual.

As information collection and storage becomes more ubiquitous and the databases containing myriad information become more connective and interactive, information queries become more likely to return a response that could easily be described as "an image" of an individual. And although most cases supporting the "right of publicity" have historically come about because a celebrity raised concerns about another using their image or name to market products or services for products, today we face exactly the same question concerning use of information about individuals collected on the web to market products and services because, in both instances, there is economic value being transferred from the individual to marketers. The issue before us is whether the consideration "paid" for the transfer and use of such information is reflective of the economic value resident in the information.

By exploring the issue of determining the economic value resident in the information, we can potentially address also our most vexing concerns without resorting to complex private prescriptions or new regulations.

Over the past two years, it has been suggested that a significant number of concerns about the reasonableness of sharing personal data could be introduced by implementing a market exchange in personal information whereby the "value" of such data would be established through arms-length transactions between data collectors and aggregators and data subjects where prices "float" in response to market supply and demand. Just this past month, Hewlett Packard published a paper suggesting an interest in a variant of this strategy. The establishment of a functioning market exchange addresses concerns from various quarters.

First, it addresses the question of informed consent in the transfer of information. By establishing a range of monetary values for information, the exchange is no longer a function of hit-or-miss barter but is indicative of the commoditized value each party to a potential transaction places on their asset for trade. Just as simply as the "click accept" option that can be exerted without any consideration, a market exchange transaction incorporates each individual's inherent valuation methodology and reduces their decision to one of exchange for measurable value.

Second, implementation of an exchange mandated under "right of publicity" legal theory (Third Restatement of Unfair Competition (1995) §46) would theoretically lead to an equilibrium in pricing of personal information that would provide both data purchasers and sellers a more efficient, and therefore less arbitrary and costly, platform for making information-sharing decisions and using such information. Just as the web is increasingly serving as a platform for subscription, differentiated and audience-specific channels and content to provide services behind a pay-wall because of increased efficiency, it is reasonable to expect that it could provide the same benefits to exchanging information for value. Use of such tools could provide both advertisers and their customers with a better understanding of the value of information disclosed.

Third, and finally, although the world is perceived as increasingly complex, we are surrounded by examples of sub-rosa complexity resulting in overt simplification for end users and actors. The "right of publicity" solution provides a model to address both policy and practicality questions by placing responsibility and knowledge in the hands of those people most appropriate to determine whether their information should be shared in a straightforward manner utilizing the technology that led to the realization of their reasonable concerns in the first place.

Michael G. Leahy, CIPP/US, is the founder and managing director of Ex Os, LLC, an entity pursuing technological solutions to the issues attendant to establishing a functioning exchange for making a market in personal information, and principal at Michael G. Leahy, Attorney At Law. A member of the IAPP Publications Advisory Board, Leahy's past experience includes work as an executive at the University of Maryland Medical Biotechnology Institute and an attorney at the Federal Trade Commission.