Information Privacy

The Internet and electronic communications have created a host of issues surrounding information privacy. The articles in this section focus on the technology, legal and business issues surrounding the electronic collection, storage and dissemination of personal information.

The Technology of the Internet and Information

Originally published July 2000

New technologies have historically raised a host of privacy concerns, from interception of telephone transmissions to eavesdropping via miniature transmitters and recording devices. However, there is no technology in history that affords potentially greater access to personal, intimate and private information than the Internet. Any form of media capable of recording - text, sound, video, live performances - can be converted to digital information and transferred and shared electronically over the Internet. Electronic information is generally inexpensive to store and process. In addition, operation of the network often relies on electronic footprints that track business transactions, web activity and e-mail records. Internet technology aimed at traffic maintenance, storage and content delivery is fluid and rapidly evolving making the challenge of privacy advocates a race to keep up with new developments.

Electronic Trails

The Internet by its nature creates an electronic trail of virtually all activity conducted using the network. Every computer connected to the Internet is assigned an Internet Protocol (IP) address that allows users to connect to everyone else on the network without regard to geographical boundaries. A web Uniform Resource Locator (URL), a unique high-level IP address, is assigned to web site hosts by administrative organizations, allowing access to the web site and the pages of content or files contained within the site. The storage of information in computer memory (called cache) of individual users, on Internet service provider (ISP) computer's known as proxy servers, on network administrator equipment and on the servers of proprietors of Internet web sites, together with the transfer of information between IP addresses, is what allows the Internet to function efficiently.

Once information is accessible on the Internet, it must be located amongst billions of other pieces of information. A variety of tools are being developed to sort through the morass of data. Databases of links to Web sites URLs, such as YAHOOTM and more specialized search tools, such as LexMarkersTM, sort, categorize, compile and organize Internet destinations to streamline access to resources. Increasingly sophisticated search engines allow keyword searching on anyone and anything. Businesses and individuals have free or fee-based access to a wealth of data regarding other businesses and individuals and their personal affairs from a variety of public and private sources. Development of artificial intelligence tools is being undertaken to better match individuals with sought after data.

Aside from information available through Internet search tools, advertisers and marketers are compiling individualized information at an incredible rate. Under the mantra of one-to-one or customized marketing, a number of technologies are being developed that allow for the profiling of individuals and their on-line and off-line activities often on a real time or instantaneous basis. While some of this information is a matter of "public record", other information is gathered, without the knowledge or understanding of the Internet user through cookies, web bugs and other Internet tracking tools.

From the standpoint of businesses and marketers, the Internet contains a treasure trove of data for analyzing consumer behavior, targeting advertising and building relationships with consumers. Profiling consumers and their patterns, interests and preferences is accomplished through a variety of techniques. Most efforts are focused on aggregated anonymous and broad demographic data. Others' efforts are more aggressive, seeking to determine specific surfing and purchasing patterns of individuals. The ire of regulators was recently raised when web-marketer Double-Click proposed matching anonymous consumer behavioral data with profiles of actual people. This may be done explicitly, as in the case of permission based marketing where individuals are given incentives or prizes in exchange for providing personal information. However, it may also be done covertly without the knowledge of the particular individual whose information is gathered.

Web visitor data is particularly attractive to businesses seeking effective promotional targeting, merchandising and product assortment planning. There are millions of commercial web sites on the Internet with the numbers growing daily. Unlike many traditional forms of marketing, such as billboards, television advertising and print media, the Internet allows advertising to be targeted based on user characteristics, demographics, transactions and individualized information. Often times this is done through banner ads, static or multi-media advertisements used by web pages to generate revenue and by businesses to market to consumers.

For example, Double-Click, a leading developer of targeted advertising tools, processes over a billion banner ads per day. Computer software matches Internet user data with particular advertisements directed at the target market segment. Go into the Alta Vista search engine at www.altavista.com and type in "legal research." Chances are, the banner ad at the top of the screen will be for a commercial or quasi-commercial legal Internet site, courtesy of Double-Click or another "ad-server" company. Likewise, order a book from Amzaon.com and you'll soon find suggestions for other books you might enjoy given your particular profile. The customized approach to marketing creates an enhanced user experience while allowing businesses to more selectively focus awareness and customer relationship building efforts. However, it may also subject users to junk e-mail or spam based on their preferences or sites they visited or contain embarrassing information from users who have accessed sensitive, controversial or illegal materials online.

Cookies

Many techniques for capturing individual data incorporate the use of cookies. A cookie is a small file sent to the browser of a user to store information. Cookies may be used store passwords and user ids, order information, site personalization information, and web activity. Cookies cannot be used to get data or information from your hard-drive or files on your computer. In addition, individual cookie information may generally be accessed only by the site that deposited the cookie. Session cookies are used temporarily while the user is engaging in activity within the site.

Covert or surveillance cookies help track browsing behavior, typically on an anonymous basis. Cookies may be placed by either the visiting site or by advertising companies that place banner ads containing cookies within the site.

Cookies may be used for ad serving activity and data tracking to create user profiles. However, not all cookie usage impacts user privacy. Cookies are often used voluntarily for site customization. A particular site may recognize a return visitor through use of a cookie in order to provide customized information for the user, such as stock portfolio management or customized news services, or to store user ID and password information. Cookies are also used in electronic commerce by helping retailers keep track of a user's electronic "shopping cart" before completing a purchase and managing retailer awards programs.

Most computers have the ability to determine whether cookies have been placed on their machine. For example, on computers with Windows operating systems, go to the "Find" command off of the Start Bar and type "cookies" in the Find Files or Folders query box. Then click "Find Now." Windows will generate a list of files or folders with cookies placed by third party web sites. Double click on the cookie files and the text of the cookie, usually a string of numbers, can be viewed. These identification numbers allow an Internet company to recognize a user each time he or she accesses the web site. Cookies can be deleted by clicking on the particular cookie file and hitting the delete key.

Cookies can be disabled easily in either Netscape or Internet Explorer web browsers. In Netscape, open the "Edit" pull down menu and select preferences. Then select "Advanced" in the category column. Netscape allows you to accept all cookies, accept cookies placed by the original server, reject all cookies, or receive a warning when a cookie is being placed. In Internet Explorer, click "File", then "Tools" and then "Internet Options." Next click on the "Security" tab then select the "Internet" symbol (denoted by a globe). Click on the "Custom Level" button and scroll down to the "Cookies" section. There you can enable or disable or require a prompt for cookies that are permanently stored on your computer or used on a "per session" basis only. To see how prevalent cookies are, change your browser setting to require a prompt before accepting cookies. Disabling cookies can considerably slow down and interfere with your Internet session.
In February, 2000, the Michigan Attorney General filed a Notice of Intended Action against web marketer Double Click for its use of covert or surveillance cookies that enable the company to track Michigan consumer Internet browsing behavior. According to the complaint:

Double Click has intruded upon users' computers and covertly recorded and retrieved valuable personal and confidential information regarding users' browsing activities ... The covert placement of a "surveillance cookie" on a consumer's hard drive by DOUBLECLICK is neither apparent to nor authorized by most Michigan consumers. It is the consumer's lack of knowledge and consent to an invisible third-party implanting electronic files and subsequently using that information without the consumer's knowledge or consent, however, that makes DOUBLECLICK's particular practices unlawful.

In response to the action of the Attorney General and pressure from the FTC, DoubleClick abandoned its plans to aggregate anonymous and personally identifiable information and modified its privacy policies. Nonetheless, the DoubleClick experience has raised individual awareness of cookies and attendant privacy concerns.

Web Bugs

While users viewing banner ads can generally assume they may be receiving cookies, a new less obvious form of "tracking device" has recently been developed. Web bugs or 1-pixel gifs are designed in a fashion that the user does not know that activity is being tracked. Web bugs are very small graphics, about the size of a period, that are hidden in a web page or HTML e-mail. Web bugs act like cookie-serving banner ads that collect information from preexisting cookies as well as the IP address of the computer user, the URL of the page from which the bug was downloaded, and the time of the page view. Web bugs can also be placed in HTML e-mail to determine whether an e-mail was viewed, when and whether it was forwarded. However, unlike banner ads, web bugs may originate from pages where no banners are present and where individuals might not otherwise expect their activity to be tracked.

Web bugs collect information to add to a user's profile maintained by Internet sites and ad marketing companies. Web bugs are controversial because they collect information covertly. People using anonymous e-mail accounts or receiving newsgroup messages can be tracked back to their IP address through use of a web bug. This information can then be aggregated with other information collected in public and private databases. Because web bugs can track people who are, for example, reading newsgroup messages, there is a concern that web bugs may be used to track political and social activities. The federal government recently came under fire for using web bugs on a federal drug site, prompting Clinton Administration action and increased attention of this new form of tracking device.

In June, 2000, the Michigan Attorney General filed a notice of intended action against four different (but presumably carefully selected) Internet sites which sheds light on at least one governmental agency's view on web bugs and Cookies. At www.procrit.com, web bugs collected visitor information from Internet users looking up information on drugs associated with the treatment of cancer and AIDS; at www.AmericasBaby.com and companion site www.babyfurniture.com, web bugs were used but the site privacy policy said nothing about third party tracking; at www.stockpoint.com, cookies were used at a site that collected personal information, including email, age range, gender and on-line stock portfolios in the absence of a posted privacy policy; finally, at www.iFriends.net, an adult-oriented site, web bugs were present on pages including those devoted to fetishes and inter-racial sex, where the privacy policy was difficult to access and failed to note third party tracking. The use of web bugs and cookies in these fashions is alleged to be an unfair and deception trade practice.

Anatomy of an Individual Profile

The following example illustrates how cookies, web bugs and e-mail can be used to create an individual profile:

The Public Record Dilemma

While cookies and web bugs create concerns because new technology may be used in an inappropriate and covert fashion, a more troubling concern may be the ease of access to public information regarding individuals and their activities. A unique aspect of the Internet's interconnected network is the ability to render obscure or practically inaccessible public records and documents available to virtually anyone at the click of a mouse. A number of free and subscription based web sites have sprung up to bring so-called "public" information out of government repositories and into the homes and offices of millions of people on the Internet. These searchable databases of public information can make finding public documents effortless for interested parties, such as businesses looking for information on prospective employees, venture partners or competitors. However, they also raise unique privacy concerns and the specter of identity theft because of the amount and types of information that can be located by anyone, regardless of the purpose, online from anywhere with an Internet connection.

Court documents provide an interesting example of the types of information potentially available over the Internet or other electronic services. Court filings often contain reams of sensitive, personal or potentially embarrassing information, including unsubstantiated or unproved allegations in civil and criminal pleadings. Other information includes social security numbers, medical records, financial documents, depositions, transcripts and other documents or information. The unencumbered release of such intimate information can be embarrassing or damaging without appropriate restrictions on access and use.

While many courts allow unrestricted off-line access to legal filings, there are significant barriers that make the information practically inaccessible. For example, viewing the contents of a case file frequently involves a trip to the particular court where the records are kept, locating the individual files and then poring through files to find particular documents of relevance or interest. Finding and viewing the records takes hours at a minimum and can have numerous additional costs. However, if court records and pleadings are available on-line, the barrier to access is removed. The documents can be found and filtered in minutes anywhere in the world.

U.S. Courts have long recognized a general common law right to inspect and copy public documents, including court records. For example, in Nixon v. Warner Communications, 435 U.S. 589, a media led battle over the right to access the Watergate tapes for sale and publication, the Court recognized a common law right of access to court filings but further determined that the right is not absolute. Reasons for access in prior holdings include a "citizen's desire to keep a watchful eye on the workings of public agencies" and "in a newspaper publisher's intention to publish information concerning the operation of government." On the other hand, courts have supervisory powers over their records and files and access has been denied in cases where there was an intention to use the information to "used to gratify private spite or promote public scandal" or "serve as a reservoirs of libelous consumption for press statements."

In U.S. Deyt. of Justice v. Reporter's Committee for the Freedom of the Press, 489 US 749 (1989), a CBS correspondent and the Reporter's Committee filed a FOIA request seeking information about a reputed organized crime figure from an FBI database of criminal information records or "rap sheets." The Freedom of Information Act contains two important exceptions to the general principles favoring release of 'information accumulated by the government. Section 6c of the Act prohibits release of "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." Section 7c excludes records or information compiled for law enforcement purposes "but only to the extent that the production of such [materials] ... could reasonably be expected to constitute an unwarranted invasion of personal privacy".

The Court went to great lengths to distinguish compiled computerized data from data avail-, able through other means, which is "practically obscure." In holding the rap sheet information was not subject to FOIA release, the court noted:

Medico may or may not be one of the 24 million persons for whom the FBI has a rap sheet. If respondents are entitled to have the FBI tell them what it knows about [his] criminal history, any other member of the public is entitled to the same disclosure - whether for writing a news story, for deciding whether to employ Medico, to rent a house to him, to extend credit to him, or simply to confirm or deny a suspicion. Id at 775.

The Court concluded by holding "as a categorical matter that a third party's request for law enforcement records or information about a private citizen can reasonably be expected to invade that citizen's privacy, and that when the request seeks no "official information" about a Government agency, but merely records that the Government happens to be storing, the invasion of privacy is "unwarranted."

The Reporters case arose in the FOIA context and FOIA does not apply to Court records. As a general rule, case files are available to anyone that asks for them during normal business hours absent a protective order granted by the court, notwithstanding the fact that there may be sensitive personal and private information in the files. Historically, this unfettered access has been tempered by the practical obscurity of the information and the practical difficulty in finding and locating the information. Widespread acceptance of the Internet and the increased reliance on digital information is leading to electronic case management and docketing systems, such as the Case Management/Electronic Case Files system being developed by the Administrative Office of the United States courts. While the system allows for purging access to case files and particular documents or media within the file, access may be within the general discretion of the courts.

Courts currently testing the CM/ECF system generally permit the public to access documents and information on the system. State and federal courts may also allow for electronic public access to information and records remotely over the Internet. This, in turn, is raising a number of unanswered questions regarding privacy concerns with respect to the compiled information in court files that can be accessed and searched in minutes. While one position is "public is public", others are concerned that unrestricted Internet access to case files compromises privacy and exposes litigants and others to personal harm. The debate regarding appropriate restrictions on release of court files and related information has only just begun.

A Web of Information

Court files are just one example of "public" information, the disclosure of which deeply impacts privacy concerns. The following table is a sampling of the types of detailed information collected from individuals and available electronically. As discussed below, some of this information is protected through state or federal legislation and regulations. However, other information is currently available with nominal restrictions. Like many areas of privacy in the Internet environment, the boundaries of access are still being defined.

Opt-In/Opt-Out

Information regarding individuals and their activities can be collected and disseminated voluntarily or involuntarily from a variety of sources. In most cases, there is no ulterior motive behind the collection of information. However, consumers may neither want information collected about them or may want to restrict access to such information or how it is used. The choice of the individual with respect to their information is in many cases one of voluntarily permitting or excluding access through an opt-in or opt-out approach.

Individual's opt-in with respect to information collection and dissemination practices by voluntarily permitting information use and access. For example, individual's opt-in when they agree that information they provide can be used for marketing purposes. Many web sites will prompt the consumer to check a box or take some other affirmative action to allow their information to be accessed or shared. Individual's may also opt-in by participating in surveys and contests or registering for goods or services.

Individual's opt-out by directing parties collecting information to cease using or collecting information in a particular fashion or instructing parties not to use the information. Unlike opt-in, which requires some affirmative act before the information is collected, opt-out presumes that the information will be collected and used unless the individual directs otherwise. Businesses and advertisers in general prefer an opt-out approach because it is much easier to collect information unless an individual objects than it is to get an individual to voluntarily agree to access.

Many services allow individuals to opt out of the collection of information. Examples include the following:

• Many Internet advertisers, including DoubleClick, AdForce, AdSmart and others allow users to opt out of on-line tracking and profiling through banner ad services
  Various states allow individuals to opt out of having their vehicle record information shared with third party marketers

1. Excerpted from the chapter by Gary A. Kendra "Information Privacy and the Internet" in A Practical Guide to E-Business Law, ICLE (December 2000).