The right to privacy has been a cornerstone of American democracy since Thomas Jefferson announced the ratified Bill of Rights on March 1, 1792. The fourth, in particular, resonates today:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Today, in light of the NSA and others, this right seems a bit like a farce. But what may shock you is that in a lot of cases, it's neither the NSA nor the government invading your right to privacy.
Hidden away in those long, lawyer-speak Terms of Service Agreements you agree to when registering your Apple (NASDAQ:AAPL) iPhone or your Comcast or AT&T (NYSE:T) Internet service agreement are paragraphs granting these companies the right to track your every move, in spite of the fourth amendment.
You may be thinking, "Yeah, yeah, yeah! But I'm totally fine with Google (NASDAQ:GOOGL) reading my emails and serving up ads. Same with Facebook (NASDAQ:FB). These guys aren't evil! It's a small price to pay for the amazing -- FREE -- services they provide!"
Don't be naive. There are other, under-the-radar technologies currently being developed, and deploying that track, they analyze and manipulate your behavior with subtlety. It's a dangerous world out there; here are three trends eroding your privacy, and some advice for proceeding in a world without any closed doors.
1. The future of retail
Across the retail world, companies are working hard to capture data about your behavior, analyze it, and use it to manipulate your shopping tendencies. Before losing upwards of 70 million credit card numbers this past December, Target (NYSE:TGT) was highly regarded for its ability to use customer data to deduce extremely personal information about specific customers -- most famously learning a teenager was pregnant before she or her father did. Creepy? You betcha.
Apple, always a company to "think different" [sic], is developing a new location-based technology it calls iBeacon to track customers' physical locations within stores. At the opportune moment, the software will alert the customer to a great deal on a shelf just a few feet away. If you're in the market for that product, finding the great deal could be very helpful. If not, the best case is that it's a little annoying.
Convincing millions of consumers around the world to carry what could be called a GPS tracking device (instead of its commercial label, the iPhone) is apparently not enough. Apple now wants to track your location down to the aisle number in your grocery store. They want to know if you prefer orange juice with pulp, or without.
2. The Internet is a toll road
Net neutrality is dead. The Internet is not the Utopian democracy we imagined it would be. Earlier this month, a Federal Appeals court threw out the proposed Internet rules requiring Internet service providers (ISPs) to treat all Internet traffic as equal -- looking at you, Comcast and AT&T.
What does this mean for your privacy? It means your ISP is effectively your Internet King. Want to get online? Pay the King. Want to have a faster connection for video? Pay more. Want to go to a website that speaks poorly of the King? Sure, as long as the King gives you permission.
If these companies analyze your usage patterns and determine your usage to be unprofitable, they can cut you off or force you to pay more. They're watching, and it's their choice.
This is a choke point for speech, for culture, and for communication. Scary stuff for a culture increasingly putting everything on "the cloud."
3. Your phone is not your friend
Your smartphone is the greatest threat to your privacy, online and off. Your phone is constantly tracking you, either with its included GPS receiver or with technology that follows you using WiFi networks close to you. It's always on. It's always watching. And, like it or not, it's telling companies your secrets.
The Wall Street Journal this week reported how a new wave of smartphone applications are taking advantage of this constant tracking to sell your information to any business willing to pay. The capabilities send shivers down your spine (emphasis added):
But Turnstyle [the tracking app] is among the few that have begun using the [location based] technology more broadly to follow people where they live, work and shop. The company's dense network of sensors can track any phone that has Wi-Fi turned on, enabling the company to build profiles of consumers lifestyles.
Turnstyle's weekly reports to clients use aggregate numbers and don't include people's names. But the company does collect the names, ages, genders, and social media profiles of some people who log in with Facebook to a free Wi-Fi service that Turnstyle runs at local restaurants and coffee shops ... It uses that information, along with the wider foot traffic data, to come up with dozens of lifestyle categories, including yoga-goers, people who like theater, and hipsters.
A business that knows which sports team is most favored by its clients could offer special promotions on game days, says Turnstyle's 27-year-old founder Chris Gilpin. Czehoski, a local restaurant, hired an '80s-music DJ for Friday nights after learning from Turnstyle that more than 60% of the restaurant's Wi-Fi-enabled customers were over 30.
Hiring a DJ to improve the customer experience at a bar is a great value-add for the bar's patrons. But is that value worth having dozens, if not hundreds, of strangers follow your every step, 24/7? It doesn't take much imagination to see the downside of this technology.
As valuable as this data may be to local bars, restaurants, or shops, consider how much more valuable it would be to burglars or hackers, eager to steal your TV, car, or credit card info!
We've reached a point of no return
In a recent survey published by gamification company Badgeville, 53% of millennial generation respondents (those born between 1981 and 2000) said they'd rather lose their sense of smell than their technology!
Their sense of smell!
There is simply no way the smartphone and mobile Internet revolution will retreat. The products and services are too convenient, too useful, too amazing, and too profitable.
Most people are not on the NSA's terrorism watch list. Most people will come to no harm if Target sends them a catalog of highly relevant products. Most people are in no danger if Apple knows that at 10 a.m. on Tuesdays, you sneak out of work to go to the corner coffee shop. If your credit card information is compromised, Federal law limits your personal loss to just $50 in most cases.
The risks here are much more macro. With absolute information comes power and control. Whether it's oppressive government or subversive corporate tactics, it is the masses that have the most to lose.
This isn't doomsday, but we should all proceed thoughtfully
Without going over the deep end, a little thought can go a long way to protecting your assets and growing your portfolio.
Remember that everything you email or text can be read by others. Know that your phone is location-aware and is sending your data to companies around you. Remember that the Internet is still a Wild West, and only share your information with known, reputable companies.
Using a credit card for day-to-day purchases instead of a debit card will reduce your liability if your information is compromised. Diversify your portfolio to include some tangible assets -- real estate being a popular, immovable, and un-hackable choice. A very successful investor once suggested investments in companies that make something that "if dropped on your foot, would hurt... a lot."
Nothing is guaranteed, except that your privacy is a fleeting commodity.