In honor of the release of Trendwatch 2012, we’ll be rolling out posts about sustainability and economic recovery. You can find them here all week, or read the whole set here. Please also join us for a free webinar on February 29th where we’ll be discussing the role of sustainability in economic recovery.
Transparency is now a ubiquitous term for business leaders and consumers. Consumers are becoming more conscious of their health, the environment, and treatment of their fellow workers and how the brands they patronize score on all counts. Companies that use unhealthy or environmentally unsafe ingredients or materials, utilize wasteful or energy-efficient processes or mistreat workers in this or other countries – suffer consumer backlash. In the past few years, calls for transparency have reached a fever pitch, with consumers’ voices growing louder and louder via social media.
It’s ironic, then, that the very medium consumers use to express their approval of or disappointment in an organization, is the very tool companies are, in turn, using to erode consumer privacy. People on both sides of this data tug-of-war are being exposed for all to see. With the advent of social media, the twenty-first century will evolve from the information age, to the personal information age. In the war between transparency and privacy, will we gain one only to lose the other? This trend where each side is demanding more transparency from the other is leading to a culture of mistrust, the very feeling transparency is supposed to dissipate.
David Connor, founder of Coethica, says,
“We are, consumers and businesses alike, at the overture of a thinly veiled data war. The corporate world (not followed far behind by governments) has for some time captured, interrogated and attempted to manipulate data to influence consumer behaviour. Consumers are at the same time demanding increasing transparency from the private sector and their meandering supply chains that they procure their everyday essentials and luxuries. They also endeavour to complete these transactions with a decreasing willingness to surrender personal information as awareness of data management and how it can be abused is made more public.”
Although the law lags woefully behind digital innovation, even the U.S. Supreme Court made mention of it in a recent ruling. As it ruled against GPS tracking of a suspect without a warrant, Justice Sotomayor expressed concern about the amount of information people routinely give to third parties (cellular companies know all the numbers you dial, ISPs can view your browsing history, online retailers can view your purchasing history, and on and on). Justice Sotomayor cited the decision in the 1967 case of Katz v. United States “[W]hat [a person] seeks to preserve as private, even in an area accessible to the public, may be constitutionally protected.”
Alice Korngold, a corporate social responsibility consultant, believes that users can still stem the flow of personal data.
“Consumers and investors are increasingly voting with their wallets in demanding greater transparency and accountability with regard to corporate governance, human rights, and the environment. With regard to companies using technology to erode our personal privacy, this is another area where we as consumers and investors can push back. The SOPA and PIPA campaigns showed that the public has a powerful voice via social media; hopefully, this is just the beginning.”
The More I Know About You, The Less I Like You
The biggest offender is Facebook. It is currently the most popular social media site on the internet with 845 million active users worldwide (as of the end of December 2011). The company is under fire for its constant revisions of its interface and privacy settings that, with each change, seem to become weaker, leaving profiles more vulnerable to outside eyes.
And even when users aren’t on Facebook itself, all social media roads seem to lead back to it as users are increasingly required to use their Facebook login information to interact with other sites, many of which report that activity back to the user’s Facebook profile. Add that to location information services like Foursquare, and Big Brother (and the world) can watch users’ every digital move.
Although it has long been a practice of businesses to gather information about consumers to better their products and services, many industries have veered into intrusive territory. Most people know that college admissions offices and employers use social media to check up on prospective applicants, but some employers are asking for applicants’ social media profiles and passwords to check up on them as part of the application process. An Illinois legislator is proposing a bill to block employers from this practice.
Social media is rapidly becoming the go-to place for institutions to find out details about people that they can’t legally ask about on employment, college or even loan applications, and businesses use it more often to deny applicants than reward them. A social network is supposed to be a personal place to interact with friends and family, now it is turning into an educational, professional and financial liability.
Many already mistrust the banking industry, and this latest move won’t help. Some banks are now considering using social media to help determine a person’s credit score. A group of new startups is working on algorithms gathering data for banks predicated on social relationships. It doesn’t end there. This approach takes into account users’ friends’ histories as well, using the erroneous logic that if a user’s friend handles money poorly, so must the user, and on the other side of the equation, a wealthy person must have wealthy friends.
Social media is impacting every industry. In 2009, a Canadian woman lost the disability benefits she was receiving due to diagnosed depression after she posted some pictures on her Facebook profile of a vacation she took with her mother. The company claimed that she looked happy enough in the photos, so she needed to return to work. A U.S. health care spokeperson stated that he didn’t know of any U.S. companies that employed this practice, but an insurance investigator interviewed by ABC revealed that he routinely checked the social profiles of people he was investigating to learn about their activities and routines.
Who’s the fairest of them all?
Andrea Learned, CSR strategist, believes that now is the time for companies to go against the greed tide and stand up for consumer privacy. “If we look at companies who have taken the risk and paved the way in CSR, who have drawn their own line in the sand and enforced it, they’ve led the effort. Transparency will continue to be a trend and the envelope will keep being pushed. As for privacy, companies take the high road, stand up and say ‘We have chosen not to go as far as we can go, because we believe that is more responsible as a company’ – will come out ahead, building customer appreciation, loyalty and faith.”
Both Microsoft and Google are trying to claim this high ground, and are fighting it out in the media. Both claim the other infringes on consumer privacy and its shaping up to be a long dispute.
Is the future about non-participation, surrender or balance?
Vocal opponents to social media participation, like Eben Moglen, a Columbia law professor, call it user-enabled spying. The only remedy is to unplug altogether. Moglen says that to continue down this road is to put your personal information in the hands of a third party over which you have no control, and watch your privacy rights continue to erode.
Is there a middle ground? Connor says, “Whilst the privacy versus transparency tug-of-war may indeed becoming more intense I believe both sides will remain delicately balanced for the foreseeable future. Consumers are a fickle bunch, if trust is lost then data transactions will decrease or seek more secure relationships.”
[Image credit: Josh Koonce, Flickr]