Villing & Company

Online Privacy, Tracking, Cookies and Other Tasty Treats

On his way home, Larry stops by the local Sam's Club and picks up a half gallon of milk, then he hits a drive-through and pays by credit card. Next he stops by the gas station to fill up his tank and deposits a check in the nearby ATM. When he gets home, he fires up his computer and goes online. He opens up his browser to check the sports scores. Worried about his privacy, he first deletes all his cookies, disables JavaScript and turns on inPrivate mode. He breathes a sigh of relief that his privacy is intact.

There's a big problem with Larry's reasoning above. He mindlessly performed all his tasks on his way home without a single thought about privacy, and yet, when he went online, he was suddenly scared to death that he would reveal too much information to advertisers and businesses.

I think many people are in Larry's position because there have been a lot of high-profile, privacy-related issues in the press recently. In late 2012 Facebook agreed to settle charges brought by the FTC by agreeing to get approval from users before changing how the company handles their data. More recently, there's been debate surrounding the "Do Not Track" setting available in some browsers, which aims to allow users to opt-out of online tracking.

Paranoia and Confusion

This has led to a feeling of paranoia about online tracking that's not entirely justified, at least not any more so than paranoia about offline tracking. In both cases, businesses keep track of your activity, not because they want to know anything about your personal life, but in order to make business decisions (e.g. what items to stock, which coupons you'd be interested in, etc.).

Much of this paranoia stems from a basic confusion about online privacy. On one hand, there are the legitimate concerns that the personal information you provide to a website might be inappropriately shared without your permission. On the other hand, there are the overblown concerns about websites tracking your activity and personalizing your experience based on that activity.

Legitimate Privacy Concerns

When you share your salary information with TurboTax, there's a valid expectation that they aren't going to share it with random third parties. Likewise, when you share your personal information with Facebook, it's valid to expect that you have a certain amount of control over what is made public. However, there's a dramatic difference between these two websites. One is a personal financial tool, the other is a website specifically developed to share information with other people. While it's important to make sure that Facebook operates ethically, I also think there's a major component of taking personal responsibility here. Don't share anything on Facebook, or other social websites, that you don't want to be public. It's important to be mindful of what you are sharing online and especially where you're sharing it.

Overblown Privacy Concerns

Due to the public conversation about social media privacy issues, people often misunderstand and overreact to relatively innocuous things, such as website tracking and browser cookies.

Cookies are primarily used to help save your preferences for a website without requiring you to create an account. Cookies cannot store viruses or malware and are mostly harmless, because they can only be read by the site that originally created them. The privacy concerns around cookies are mostly about third-party cookies, which are used to track visitors across multiple websites.

Websites often use third-party cookies to determine basic information about their site (how many people are visiting, which pages are most popular, etc). For the most part, this information is anonymous and aggregated to determine trends. It's possible that your tracking information could be connected to you, but there's very little risk (unless you're doing something illegal). It's a little like the turnstyles you walk through to enter an amusement park; the point isn't that YOU visited that day, it's that 4,500 people visited compared to 3,400 the day before.

Some sites may also use third-party cookies to help personalize website advertising, but this isn't any different than grocery stores printing out customized coupons based on the items you purchased. This kind of thing happens all the time in brick-and-mortar retailing, the most common being member cards and frequent customer programs. It's surprising how much these companies know about you without ever needing to hire a private detective. But the point is that they don't actually care about YOU in particular, they care about predicting what customers like you are most interested in purchasing. While it may seem a little creepy at times, the actual personal privacy implications are quite overblown.

Online/Offline Consistency

The point I'm trying to make is not that you shouldn't be concerned about online privacy; it's that you need to put it in perspective. Like Larry, many people seem hyper aware of their "privacy" when it comes to online tracking and marketing, while shrugging off similar offline concerns. When it comes to online tracking and marketing, the actual privacy risk is very small.

However, that changes once you begin sharing sensitive personal information with a website. If you share something, it's possible that it will be made public. Don't share anything online that you wouldn't want to become public, unless you're certain that it's a website you can trust.

Filed Under: general

Villing & Company

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