Taking Sides in the War for Your Privacy

Facebook has had to fend off plenty of privacy concerns over the years, so it came almost as a shock to discover that Facebook is actually defending its users' data for once. It seems that some employers have begun asking for applicants' Facebook login info during interviews, a dangerous step onto a slippery slope for multiple reasons. Facebook's put its foot down, warning offenders that such invasive requests open them up to discrimination lawsuits.

It's only the latest battleground in the ongoing war for your personal information. Facebook's pushback was necessary, but it's not enough to make privacy advocates feel that Zuck's on their side. Other companies have already made clear that they want to know you much better. The few white knights left are increasingly outgunned. Like it or not, your life could become an open book for companies (and governments) with the right resources.

Beneath the veil
I've covered privacy concerns several times this year, mostly in regard to the intersection of advertising and tracking. Thanks to the Arab Spring, I've also been able to show you some ways that repressive governments can track their citizens. There are real concerns raised by various forms of tracking, but in some cases the risk and the danger are vastly overstated.

For those truly worried about their information leaking out into cyberspace, there's always the unplug option. But let's face it; that's not going to cut it in a connected world. Most people can't turn their backs on the wealth of resources the Internet offers. Privacy today is more likely to involve workarounds, secure connection layers, and other guerilla-warfare tactics against deep-pocketed information seekers.

The freedom fighters: privacy protectors
I wish I could tell you that there are companies you can invest in that protect privacy rather than looking for ways to blur its boundaries. There aren't. Privacy defenders don't have the resources that large companies do, and with a majority of consumers already willing to be tracked in exchange for stuff, it seems unlikely that they'll ever come close to an even playing field.

There might be money in the few willing to pay for privacy -- former Google engineers have, somewhat ironically, started companies to block tracking from sites such as Google (and Facebook, and Digg, and Twitter, and so on). But they are decidedly at a disadvantage. Barring widespread, egregious, and highly public abuse of user data, attitudes toward being tracked are likely to keep softening.

The mercenaries: marketing and advertising
Look to the right of this text. Odds are you'll see an advertisement of some sort (at least if this hasn't been lifted from its original location). Is it relevant to your interests, or is it just a boilerplate financial product push? Context-sensitive ads, which Google's built itself on, are only the first step toward advertising that's truly personal. When those ads can figure out what you're thinking and what you're susceptible to buying right now, they'll be fulfilling advertising's ultimate goal.

Similarly, location-sensitive advertising is appealing to companies that promote bricks-and-mortar businesses. A Groupon (Nasdaq: GRPN  ) deal to that new Thai place downtown is more likely to catch your eye if you're walking past it on your way home from work. The company's already moving into this field, though user uptake may be limited to large cities. Microsoft (Nasdaq: MSFT  ) upped the ante on both location-based and personalized advertising with a mall advertising kiosk supported with Kinect hardware. Ultimately, any company that doesn't personalize will probably lose out.

It's hard to call any of these companies evil, despite what some privacy advocates may think. There is always a risk of data loss, but unless the company has truly incompetent security in place (looking at you, Sony) it can be quite difficult for hackers to break through. There's also a risk of being tracked for nefarious ends, but a determined party can snoop without plugging into your browsing habits. And there are companies more than willing to help governments snoop. These are the most dangerous combatants in the privacy war, and perhaps the most secure.

The men in black: government-supported tracking
It's hard to call out specific companies for supporting government snooping, since the mere use of hardware or software doesn't necessarily implicate a company that designed it for other uses. But one company comes up repeatedly when government-sponsored privacy erosion issues surface -- Boeing (NYSE: BA  ) , through its Narus subsidiary.

The deep packet inspection software Narus produces has been linked to now-deposed dictators, and will be a key component in the National Security Agency's nearly finished $2 billion Internet-monitoring data center. According to a Wired feature on this massive operation, all it takes is a name for Narus' software to intercept and record any communication from that person.

AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) both granted the NSA access to their domestic and international billing records, which makes it much easier for Narus to do its work. Beyond that, AT&T has also allowed the NSA to install wiretaps in its switching buildings, through which much domestic data traffic flows, and at its satellite-receiving earth stations. There's been no word yet on the Googles and Facebooks of the world giving the snoops unfettered access. If that happens, you can move them into this combatant group, leaving it by far the strongest and most dangerous of the three. If they resist the government's push, it may not matter. Most people don't cover their digital tracks well enough anyway.

Keep your head up
Privacy isn't black and white; it exists in a continuum that works differently for everybody. So what can you do? Outside of keeping your money out of companies that don't protect your privacy, not much. Don't demonize Google and Facebook when others are doing much worse, but don't let any company off the hook if it plays fast and loose with your information.

What do you think will happen in this war? Let me know with a comment.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services have recommended buying shares of Google and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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