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"Got an e-mail list of customers or readers and want to know more about each - such as their full name, friends, gender, age, interests, location, job and education level? Facebook has just the free feature you're looking for, thanks to its recent privacy changes. The hack, first publicized by blogger Max Klein, repurposes a Facebook feature that lets people find their friends on Facebook by scanning through e-mail addresses in their contact list. But as Klein points out, a marketer could take a list of 1,000 e-mail addresses, either legally or illegally collected - and upload those through a dummy account - which then lets the user see all the profiles created using those addresses. Given Facebook's ubiquity and most people's reliance on a single e-mail address, the harvest could be quite rich. Using a simple scraping tool, a marketer could then turn a list of e-mail addresses into a rich, full-fledged set of marketing profiles, with names, pictures, ages, locations, interests, photos, wall posts, affiliations and names of your friends, depending on how users have their profiles set. Run a few algorithms on that data and you can start to make inferences about race, income, sexual orientation and interests. While that information isn't available for all users, Facebook changed its privacy settings in early December so that certain information can't be made private, including one's name, current city, profile picture, gender, networks and friend list (the latter can be somewhat hidden from public view). Anyone with your e-mail address can harvest that information, the company admits."

Probably not limited to FaceBook

Facebook has gone a long way to protect the privacy of users on its own site. But what happens when users share their Facebook profiles and friend lists with other sites? Are social networks responsible for defending data its members decide to take elsewhere? Those questions have taken on added urgency following the introduction of tools by leading social networks, including Facebook and News Corp.'s (NWS) MySpace, that let users interact with their friends on partner sites. Facebook Connect, for example, lets a user instantly share a movie rating on Netflix (NFLX) with all or some of his or her pals on Facebook. Privacy advocates warn that these services pose a whole new set of concerns about how user data are collected and shared among sites on the Web. Using these open-networking tools, thousands of companies can unearth a trove of new data about a visitor-age, gender, location, interests, and even what a person looks like. "I'm wondering if people really understand when they're using Facebook Connect that other sites get access to their whole user profile and social graph," says Pam Dixon, executive director of the World Privacy Forum. Announced last July, Facebook Connect has already signed up more than 8,000 partner sites, many of which plan to use data collected on Facebook members for their own purposes. Joost, a video-viewing site that integrated with Facebook Connect in December, checks the ages of viewers entered on their Facebook profiles to give its own content partners-CBS (CBS), for example-a better idea of which Joost users are watching CBS programming. Digg.com will let users display their Facebook profile photos alongside comments they make on the social news-sharing site.

Wikipedia told the controversial U.K. advertising firm Phorm on Thursday not to spy on Wikipedia's users, saying the company's plan to monitor what sites people visit on the net invaded people's privacy. Wikipedia now joins Amazon.co.uk in opting out of the Big-Brother-esque marketing scheme and creating the possibility of a mass opt-out by the net's largest websites. Phorm wants to pay ISPs -- such as British Telecom -- to let it build marketing profiles of its subscribers by installing boxes inside the ISP that monitor every url users visit and every search they run. Using those profiles, Phorm can charge advertisers high rates to serve targeted ads. But in an email sent Thursday, Wikimedia.org told Phorm not to record anything about urls from domains it controls, ranging from Wikiquotes to Wikipedia -- one of the most popular sites on the net. Phorm operates an opt-out system for sites and ISP customers, but it would be virtually impossible to verify if the company actually complied with such requests. "The Wikimedia Foundation requests that our web sites including Wikipedia.org and all related domains be excluded from scanning by the Phorm / BT Webwise system, as we consider the scanning and profiling of our visitors' behavior by a third party to be an infringement on their privacy," the email read, according to a Wikimedia blog post.

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The authorities in Brussels fired a warning shot across the bows of online advertisers today, signalling new rules to combat surfer profiling and breaches of privacy in the interests of commercial gain. In the strongest denunciation of the conduct of online advertisers, Meglena Kuneva, the European commissioner for consumer affairs, argued that personal data has become "the oil of the internet and the new currency of the digital world". She warned that surfers' privacy rights were being abused by the amassing of personal information and its supply to advertisers who targeted individuals who were often unaware of what was happening. "From the point of view of commercial communications the world wide web is turning out to be the world wild west. This could be very damaging," Kuneva told a meeting of industry professionals and analysts in Brussels. "Consumer rights must adapt to technology, not be crushed by it. The current situation with regard to privacy, profiling, and targeting is not satisfactory." The commissioner outlined European laws regulating the protection of privacy, commercial contracts, and countering discrimination, and indicated that the regulations were failing to keep up with the pace of developments on the internet. She called on the online advertising industry to come up with a voluntary code of conduct to protect consumer and privacy rights, but clearly signalled that the EU authorities would probably have to legislate to prevent abuses. The volume of personal data collected on the internet was growing exponentially and was increasingly being used for commercial purposes by tracking surfers' browsing habits, using cookies, and making the information available for individual profiling and targeting of consumers, she said.

For months somebody (I don't know who) has been running a Facebook profile that bears my name, my personal information and several photos of me. An old high school friend had connected with the faker, instead of me. Several of the people with whom fake Matt is friends also appeared to be fakes, including a copycat of Vertex Pharmaceuticals ( VRTX - news - people ) founder and chief executive Joshua Boger. (Boger has a real Facebook profile but isn't friends with me. He declined to comment on the fakesters.) I couldn't see this Fake Matt's profile myself, even by searching for my name.

Google never fails to surprise. It's the scope and scale of their ambitions that impresses me ranging as they do from relatively simple applications that are just way cool such as Sky Map, through their Chrome Web browser (which is now looking pretty stable), to the subject of this newsletter: Google Health. Google Health, which was launched as a beta (of course) in spring 2008, is a free repository for your personal health information. Using the service you can create online health profiles for yourself, family members or others you care for (these profiles can include health conditions, medications, allergies and lab results), you can import medical records from hospitals and pharmacies, share your health records with "your care network" (which may include family members, friends and doctors), and browse an online health services directory to find services that are integrated with Google Health. After you sign up you can import your medical records from Allscripts, Anvita Health, The Beth Israel Deaconess Medical Center, Blue Cross Blue Shield of Massachusetts, The Cleveland Clinic, CVS Caremark, Healthgrades, Longs Drugs, Medco Health Solutions, Quest Diagnostics, RxAmerica and Walgreens. What you'll wind up with if you update all of the sections is a pretty complete health profile, which means that privacy has to be a concern. Interestingly, because becoming a subscriber is voluntary it appears that the service is exempt from the provisions of the Health Insurance Portability and Accountability Act of 1996.

In my last post, Behavioral Targeting, I mentioned that I used a home-grown form of customer tracking when I worked on Wall Street. I explain a bit more about that in this post. I will describe more about the process in a second part to this post.
Early Adopters
The competition in the financial se

"All Facebook users can deactivate their profiles, but doing so quietly might not make quite the same statement as using another service to slam the door on the site. One such service, Seppukoo.com, created by the Italian group Les Liens Invisibles, drew attention late last year after launching a campaign to convince people to commit Facebook suicide. Wannabe ex-Facebook members can provide Seppukoo.com with their names and passwords and Seppukoo then not only deactivates their profiles, but also creates a "memorial" page that it sends to users' former Facebook friends. Facebook evidently isn't happy about this development. Last month, the company fired off a cease-and-desist letter to Les Liens Invisibles, complaining that users who provide log-in data are violating Facebook's terms of service. The company also alleges that the scraping of its data violates a host of laws, including an anti-hacking law, the federal spam law and the copyright statute. "

FaceBook is sooooo concerned about our privacy!

"Sherry Natoli is followed everywhere she goes while shopping online, but she doesn't mind at all. Natoli, who owns a seashell business in Tampa, does all but her grocery shopping on the Internet and even opts in whenever she's asked whether she's willing to have her online movements tracked by websites." Companies have been monitoring our online behavior for almost as long as there's been an Internet, often using our online footsteps (cookies) whenever we search, browse or buy online. Tracking technology has advanced so much that everything from how long we linger over a product description to whether we are searching for sexual-dysfunction drugs can be collected and stored on individual profiles. Our profiles are numeric descriptions, not our real names, but in some cases, it's not hard to determine personal information behind the numbers. Privacy concerns abound, and several privacy and consumer groups are urging Congress to enact laws on what can and can't be collected and for how long.

MPs have today launched an investigation into the use of snooping technology by ISPs which allows them to profile customers for advertisers and throttle or block specific types of traffic. An inquiry by the All-Party Parliamentary Group on Communication will examine issues such as the emergence of Phorm's profiling system, and the restriction of bandwidth available to specific applications such as BitTorrent. Both activities are reliant on Deep Packet Inspection (DPI) technology. "Now the Internet is part of daily life, concerns are increasingly raised about a wide range of online privacy issues," the group said in a background statement. "Should there be changes to individual behaviour? Should companies be pressed to prioritise privacy issues? Or is there a need for specific regulations that go beyond mere 'data protection' and address privacy directly?" The inquiry will also consider the impact of DPI technology on ISPs' "mere conduit" protection from liability for illegal traffic such as child pornography and copyright-infringing filesharing.

Social media is on the rise, and so are the privacy and security risks. Is it time to dial back on the whole Web 2.0 'friend' thing? The social media honeymoon is officially over. While it may not yet be time to fly to Reno for a quickie divorce, you might want to start thinking about sleeping in separate bedrooms for a while. Example du jour: Over the weekend, a rogue application spread across Facebook, warning users about bogus errors in their profiles. Clicking on the "Error Check System" app causes it to send false warnings to your entire FB posse, per the unofficial AllFacebook blog. There doesn't seem to be any payload associated with that app besides driving traffic, but the potential for abuse is obvious. But a bigger problem on social nets is an old familiar one: spam. So far, spam only accounts for about 5 to 25 percent of all e-mail passed on social networks, versus 90 percent of regular e-mail, says Adam O'Donnell, director of emerging tech for Cloudmark, which filters spam for some large social nets (but won't identify which ones). As more people start tweeting about what their cats ate for lunch and share their Facebook profiles with near-total strangers, though, that number will only grow. The type of spam on social networks is different too, says O'Donnell. Think fewer fake Viagra come-ons, more social engineering scams. In other words, the junk you get on social networks is more likely to be aimed at stealing your credentials or your identity -- and thus much more dangerous than garden-variety spam.

Three out of four Americans believe that individuals are responsible for protecting their own privacy online. That's the bottom line of a new survey conducted by TRUSTe, a company that certifies the compliance of websites with privacy standards and statements. Nonetheless, The New York Times reports that the Federal Trade Commission is trying to put more responsibility on website operators: Last month, the F.T.C. revised its suggestions for behavioral advertising rules for the industry, proposing, among other measures, that sites disclose when they are participating in behavioral advertising and obtain consumers' permission to do so. One F.T.C. commissioner, Jon Leibowitz, warned that if the industry did not respond, intervention would be next. "Put simply, this could be the last clear chance to show that self-regulation can -- and will -- effectively protect consumers' privacy," [FTC commissioner Jon] Leibowitz said, or else "it will certainly invite legislation by Congress and a more regulatory approach by our commission." Behavioral advertising, which records individual users' Web usage by inserting cookies into their browsers and keeping a log of where they go and what they do, is the most high-profile privacy issue today. Google-owned DoubleClick is tracks Web users across many sites, combining them into one profile at DoubleClick's end to be used for ad targeting. Some survey respondents use cookie-deleting browsers and anonymizing software to thwart tracking systems. Privacy advocates, TRUSTe, and the FTC all strongly encourage companies to post meticulous privacy statements for online visitors, and to follow them to the letter. Still, only 15 percent of TRUSTe's survey respondents said they actually read privacy statements.

We've all heard the argument before: "Why should you worry about the government looking into your personal records if you have nothing to hide?" Daniel J. Solove, an associate professor of law at The George Washington University Law School, analyzes that argument in a recently published paper titled "I've Got Nothing to Hide and Other Misunderstandings of Privacy." Solove argues that "the question assumes faulty assumptions about privacy and its value." Those who make the "nothing to hide" argument fail to understand the chilling effect that surveillance has on public discourse, the fact that small bits of private data (which an individual may not object to being uncovered) when put together form a larger and more intimate profile (which an individual may object to), and the mistake of having one's profile mistakenly associated with a group that is labeled as threatening. Here's an excerpt from the paper, which was published in the latest issue of the San Diego Law Review: [T]he problem with the "nothing to hide" argument is that it focuses on just one or two particular kinds of privacy problems - the disclosure of personal information or surveillance - and not others. It assumes a particular view about what privacy entails, and it sets the terms for debate in a manner that is often unproductive. It is important to distinguish here between two ways of justifying a program such as the NSA surveillance and data mining program. First is to not recognize a problem. This is how the "nothing to hide" argument works. It denies even the existence of a problem. The second manner of justifying such a program is to acknowledge the problems but contend that the benefits of the NSA program outweigh the privacy harms. The first justification influences the second, for the low value given to privacy is based upon a narrow view of the problem. The key misunderstanding is that the "nothing to hide" argument views privacy in a particular way - as a

One of my predictions for last year was that privacy would be a growing concern among mainstream users. I didn't repeat that prediction this year, but perhaps I should have. The reason? Apparently, younger web users seem to care more about privacy controls. Or at least, they use them more. According to Facebook chief privacy officer Chris Kelly, more teenagers than adults use privacy controls on the social network, at a rate of 60% to about 25-30%. That's surprising given the conventional wisdom that younger Internet users tend not to care about the privacy of their data. A recent study from Computer Associates confirms that many teens are at least somewhat concerned with online privacy. That study showed that 79% of teens aged 13-17 who are members of a social networking site like MySpace or Facebook protect their profiles from the general Internet in some way (i.e., only allow friends or friends of friends to view their information). Profiles on Facebook, of course, are automatically protected from viewing by the Internet at large, but protecting them from the rest of your network requires additional steps. That teens are more likely to utilize Facebook's granular privacy controls points to one of two things that lead to the same conclusion: 1. Teens care more about online privacy than adults, or, 2. Teens are simply more aware of social networking privacy controls than adults.

Visit the Amazon.com site to buy a book online and your welcome page will include recommendations for other books you might enjoy, including the latest from your favorite authors, all based on your history of purchases. Most customers appreciate these suggestions, much the way they would recommendations by a local librarian. But, what if you visited an investment site, only to find advertising messages suggesting therapies for your recently diagnosed heart condition? Chances are that you would experience what Fran Maier calls the "creepiness" factor, a sense that someone has been snooping into a part of your life that should remain private. Maier is the Executive Director of TrustE, a nonprofit that sets guidelines for online privacy and awards a seal of approval to companies meeting those guidelines. She was a speaker at the recent Supernova conference, an annual technology event in San Francisco organized by Wharton legal studies and business ethics professor Kevin Werbach in collaboration with Wharton. Creepiness Factor The creepiness factor is a risk inherent in so-called behavioral targeting. This practice is based on marketers anonymously observing a user's behavior on the Internet and compiling a personal profile based on interests and behavior -- sites visited, searches conducted, articles read, even emails written and received. Based on their profiles, users receive advertising targeted specifically to them, regardless of where they travel on the web. Consumer advocates worry that online data collection and tracking is going too far. Marketing executives counter that consumers benefit from seeing advertising relevant to their interests and contend that relinquishing some personal data is a reasonable trade-off for free access to Internet content, much of it supported by advertising.

"I heard a rumor that I hope isn't true. Specifically, I heard that opting out of behavioral profiling may not stop advertising companies from tracking you as you travel across the Web. Rather, according to the rumor, in many cases you merely opt out of seeing the tailored ads your web history might otherwise trigger. The ability to opt out of behavioral profiling essentially underpins the argument for self-regulation by the industry. The idea is that (1) people like tailored ads and (2) those that worry about the practice, for instance, from a privacy perspective, can opt out of it. Setting aside the apparent frailty of cookie-based opt out (when you delete your cookies, you delete your opt out as well) and the availability of other means to track users (like flash cookies), this seems pretty straightforward and convincing. But what does "opting out" mean, exactly? A close look at the Network Advertising Initiative website, which offers an opt out tool on behalf of most major online advertisers, turns up no guarantee that opting out will stop a company from logging where a user has traveled."

Companies in the technology, media and telecommunications industries (TMT) significantly reduced investment in security spending in 2008, according to a new survey from Deloitte Touche Tohmatsu. The third edition of the Deloitte TMT Global Security Survey reveals that 32 percent of respondents reduced their information security budgets, while 60 percent of respondents believe they are "falling behind" or still "catching up" to their security threats -- a significant increase from 49 percent over the previous year. "This year's results indicate companies are explicitly scaling back. With funding decreasing and the threats increasing, it is more important than ever for TMT companies to be highly cost efficient in addressing their security risks," said Irfan Saif, a principal in Deloitte & Touche LLP's Audit and Enterprise Risk Services practice. "Companies that do not have a sound understanding of their security risk profile, or who under-invest in security now, may find themselves exposed to significant and increasingly sophisticated threats that they are not equipped to mitigate." With the proliferation of digitized assets, security should claim a significant portion of a company's overall IT budget. However, only 6 percent of respondents allocate 7 percent or more of their total budget to IT security. This year represents a significant decline from the previous edition of the survey, which showed that 36 percent of the respondents allocated 7 percent or more of their budget to IT security. The survey also indicates that declining security investment is hindering adoption of new security technologies, with only 53 percent of respondents considering their organizations to be early adopters, or part of the early majority, down from 67 percent in 2007. Companies are focusing more effort on optimizing solutions that are already in place rather than investing in cutting-edge technology that can be capitalized upon during economic recovery.

"Lora Bentley spoke with Anzen analysts Megan Brister and Jordan Prokopy via e-mail regarding behavioral advertising - what companies are doing, what regulators want to do and what we, as advertising consumers, need to know. With their coworker Miyo Yamashita, the analysts recently wrote a guest opinion for IT Business Edge. Bentley: Why are so many concerned about privacy when it comes to behavioral advertising? What is it about the Internet that convinces consumers that information they share there is not being used? Brister and Prokopy: Most concerns stem from the lack of transparency around data disclosure practices. While consumers may value a Web site's product and service offerings, they are generally unaware that businesses share their information with an extensive group of other businesses in order to deliver targeted advertising. This group includes news Web sites, advertising networks, profiling services, and Web analytics providers, to name a few. As Pamela Jones Harbour, a Commissioner at the Federal Trade Commission (FTC), discussed at the FTC Roundtable earlier this week, there is an asymmetry between consumer perceptions and business realities. Once consumers are informed of businesses' data handling practices, they will want to have more control over how businesses manage their information. As we discuss in our article, some businesses engaged in online behavioral advertising have been slow to adopt transparent consumer data management policies. This is a concern particularly for vulnerable groups, such as minors or non-English speaking consumers, because they may not understand legally written policies. Consumer advocacy groups argue that without knowledge and control over the collection, use, and disclosure of data, Web sites may misuse or expose sensitive data about consumers' health, lifestyles and finances."

"Facebook founder Mark Zuckerberg told a live audience yesterday that if he were to create Facebook again today, user information would by default be public, not private as it was for years until the company changed dramatically in December. In a six-minute interview on stage with TechCrunch founder Michael Arrington, Zuckerberg spent 60 seconds talking about Facebook's privacy policies. His statements were of major importance for the world's largest social network - and his arguments in favor of an about-face on privacy deserve close scrutiny. Zuckerberg offered roughly 8 sentences in response to Arrington's question about where privacy was going on Facebook and around the web. The question was referencing the changes Facebook underwent last month. Your name, profile picture, gender, current city, networks, Friends List, and all the pages you subscribe to are now publicly available information on Facebook. This means everyone on the web can see it; it is searchable. I"

Zuckerberg should not be trusted with your personal data. The range of reader comments in response to this article are worth a read.

"The ubiquity of online advertising is a product of its importance to the internet economy, said a group of consumer advocates Wednesday during a debate on the future of online advertising. But the impact of new targeted advertising methods on consumer privacy and its potential to manipulate online experiences was the subject of heated argument at the event, sponsored by the Information Technology and Innovation Foundation. Privacy does not mean the same thing to all consumers in all situations, said Progress and Freedom Foundation Senior Fellow Berin Szoka. Advertisements are attempts to capture user attention - the "great currency of the Internet" - and when successful support a wide range of valuable content, he said. But in online life, "consumers have many values," Szoka added. "Privacy is one of them," he said, but it is not an absolute. Consumers must sometimes trade privacy for content, he said. "There is no free lunch." As more information and entertainment migrates to the internet, Szoka said it is "critical…that we find a way to support this media." Targeted advertising can fit the bill, he suggested - especially if technology gives users more control over their own preferences. Most consumers don't understand that advertising is a necessity for today's internet, he said. New technologies like targeting need to be given a try, he said, so content providers can recoup the value of their advertising - down 25 percent since 2000, he noted. Center for Digital Democracy founder Jeff Chester said Szoka's ideas about advertising's future represented a "false dichotomy." The real debate should be over the rules that regulate advertiser content, he said. Chester warned of a "Targeting 2.0″ system in which neuroscience combined with massive databases not only serve ads, but target content to users. "It's about influencing our behavior without our consent," he said. Chester pointed to the subprime lending cr