Will the lawyers shut down the Web over privacy?

A class-action lawsuit accuses Google of leaking personal data to advertisers -- but would the Web survive if search engines and social networks really had to preserve your privacy?

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Four years ago, AOL released a huge trove of search date: the text of 20 million search queries for 650,000 users. It did so to help researchers, but reporters at the New York Times dug into it and were able to link a few searches to the people who made them. It was a huge embarrassment for AOL and a shock to the people who were, well, outed.

Yes, the reporters went to a good deal of trouble to make those links, something few advertisers or other parties would have the resources or even the motivation to do. But it wasn't as hard as you might expect, argues Paul Ohm, an associate professor University of Colorado Law School. In a paper published last year, Ohm says that removing the most obvious forms of personally identifying information (PII) doesn't guarantee anonymity [PDF]. He writes:

How many other people in the United States share your specific combination of ZIP code, birth date, and sex? According to a landmark study, for 87 percent of the American population, the answer is zero; these three pieces of information uniquely identify each of them.

How many users of the Netflix movie rental service can be uniquely identified by when and how they rated any three of the movies they have rented? According to another important study, a person with this knowledge can identify more than 80 percent of Netflix users. Prior to these studies, nobody would have classified ZIP code, birth date, sex, or movie ratings as PII.

Can Web business and privacy co-exist?
I don't why Gaos launched the suit; she hasn't returned my calls. As is common in class actions, the suit does not yet ask for specific damages. That amount will come as the suit progresses. For now, the class is a class of one, though attorney Nassiri says he is looking for others to join.

Maybe he's the equivalent of an ambulance chaser, or maybe he and his client are really fighting for the right of privacy. We'll see. But for me, the issue is the business model of the Web and how that is making it increasingly difficult to maintain privacy.

Last week, I wrote about the necessity of Facebook to at least condone (if not abet) privacy leaks via applications on its site. Because hundreds of millions of dollars in revenue are on the table, expecting Facebook to really crack down seems naïve. It's in business to make money, and sharing data with advertisers and app developers helps bring in the green.

What Facebook and Google do, so does everybody else on the Web, though usually on a much smaller scale. Advertisers were originally very skeptical of the use of Web-based advertising. They figured, rightly at first, that there was no way to know who actually looked at their ads, let alone who took the next step and bought goods.

Those questions have largely been answered, and Web advertising is overshadowing advertising in all other media. The knowledge of what moves users to and from particular sites is now a fundamental part of business on the Web.

Ohm makes several suggestions to minimize the damage, including a limit on how much search (and other) data may be stored and for how long. I haven't examined his ideas in detail, but will do so in a future post.

For now, I'm struggling to see how our need for privacy can be reconciled with the business of the Web, a business most of us are happy to participate in, as customers or entrepreneurs. Let me know what you think, and for now, don't beat on Gaos. She's raising issues of great importance.

I welcome your comments, tips, and suggestions. Post them here so that all our readers can share them, or reach me at bill.snyder@sbcglobal.net. Follow me on Twitter at BSnyderSF.

This article, "Will the lawyers shut down the Web over privacy?," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com.

Copyright © 2010 IDG Communications, Inc.

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