Cookies Are Not So Sweet

Don't you just love those discount cards your supermarket gives you? The cashier swipes the card, and you save ten bucks on a week's worth of food. And that shampoo that came as a free sample in the mail is so much better than your usual shampoo. How did the company know your hair type? As for the cigarettes you buy even though your HMO put you on a nicotine patch, well, no one will ever know. Right?Not unless a company buys the store's data base, complete with your name, address and every item you've bought since the customer cards were introduced. Welcome to the brave new world of database economics. These days, the miracle of data gathering does not stop at the store's front door. There's no law stopping credit card companies from selling marketers what they know about your buying habits. And if you're an Internet surfer, your grocery list looks pretty tame compared with the information about your interests you've provided to companies online.As many computer users know by now, some web sites attach "cookies" to surfers' login names that serve as information tags keeping track of your browsing interests -- with or without your knowledge. The New York Times politely asks your permission before attaching a cookie. Other sites are not so polite, secretly attaching cookies to track the type of software on your computer or the products you ordered electronically.Unless you set your computer specifically to refuse cookies, or to alert you when they show up, a database of your interests silently accumulates on your hard drive, waiting for a company to retrieve the information on who you are, and your online browsing and buying habits. Online advertisers can then target you with ads that fit your profile, or marketers can sell the data to companies you don't usually associate with the Internet.This is the price surfers pay for the web being "free" -- you're really paying with your privacy.For decades, credit bureaus have secretly gathered consumer credit histories that they sell, for instance, to banks looking for new credit cardholders. The detailed buying information from the Internet and retail stores is equally valuable. It makes it easy for a corporation to push products that seem to fit your profile -- like that conditioning shampoo that showed up in the mail. Or perhaps you've received offers for tickets to concerts by bands whose music you've purchased online, or seen car ads flashed by your web brower after you've searched online for a mechanic.Some of us may not mind losing a little privacy to allow companies to target our buying habits. We might want them to use our cookie- or consumer-card-created profile to feed us ads for products they know we'll enjoy. Perhaps we should be grateful that Barnes and Noble can recommend books that readers with profiles similar to ours bought. But it creates an increasingly manipulated and artificial environment that does not end when we turn off the computer. Companies can anticipate our needs, subliminally guiding us in the grocery aisles, and we won't even notice how circumscribed our interests have become, how we've become channeled into the same old directions by the brave new world of information technology.And perhaps, one day, we'll be denied health insurance because our shopping data reveals a cigarette habit. Or a prospective employer won't hire your aunt because a background check revealed she bought St. John's Wort or researched the depression-fighting herb on the web.Thankfully the system is now under attack -- not just the electronic data gatherers but the old credit bureaus too. And though Americans often see themselves as the world's best defenders of liberty, the attack is coming from across the sea, from the European Union (EU).That's because Americans have fallen down on the job in recent years in defending their liberty against corporate power. Under the U.S.'s weak privacy laws, companies secretly gather information on their customers to sell to credit bureaus without their customers' permission. This behavior would be illegal in EU countries. There, companies must ask customers' permission to gather information about them, informing them of exactly how it will be used. The companies must win new permission if they want to sell the data or use it for any other purpose. U.S. corporations are sweating now, because new EU rules require that they too adhere to these guidelines if they want to operate in Europe. That means no cookies secretly tracking their European customers' preferences. The EU is also demanding that the U.S. and other governments strengthen their own privacy laws for corporations to continue to do business there.Business Week warns the $32 billion electronic commerce industry will be especially throttled by the laws. But the information age comes with new threats not yet seen in the modern marketplace, and we would do well to recognize them before the world that is our imagination becomes smaller, and smaller.


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