ECON 425/563 // CPSC 455/555

NOVEMBER 6, 2008

Online Online PrivacyPrivacy

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OutlineOutline Large amounts of sensitive

information flow around the web. Privacy-enhancing technology has

been developed and deployed (example: P3P).

Economic approaches to the management of private information

(Acknowledgements: L. Cranor, C. Lu, and H. Varian)

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Online privacy in the Online privacy in the comics!comics!

Cathy February 25, 2000

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Why is Cathy concerned?Why is Cathy concerned?

Cathy March 1, 2000

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How did Irving find this out? How did Irving find this out? He snooped her emailHe looked at the files on her

computerHe observed the “chatter” sent

by her browserHe set cookies through banner

ads and “web bugs” that allowed him to track her activities across web sites

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What do browsers chatter What do browsers chatter about?about?

Browsers chatter aboutIP address, domain

name, organization, Referring pagePlatform: O/S,

browser What information is

requestedURLs and search

termsCookies

To anyone who might be listeningEnd serversSystem

administratorsInternet Service

ProvidersOther third parties

Advertising networksAnyone who might

subpoena log files later

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A typical HTTP requestA typical HTTP requestGET /retail/searchresults.asp?qu=beer HTTP/1.0Referer: http://www.us.buy.com/default.aspUser-Agent: Mozilla/4.75 [en] (X11; U; NetBSD

1.5_ALPHA i386)Host: www.us.buy.comAccept: image/gif, image/jpeg, image/pjpeg, */*Accept-Language: enCookie: buycountry=us; dcLocName=Basket;

dcCatID=6773; dcLocID=6773; dcAd=buybasket; loc=; parentLocName=Basket; parentLoc=6773; ShopperManager%2F=ShopperManager%2F=66FUQULL0QBT8MMTVSC5MMNKBJFWDVH7; Store=107; Category=0

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What about cookies?What about cookies? Cookies can be useful

used like a staple to attach multiple parts of a form together

used to identify you when you return to a web site so you don’t have to remember a password

used to help web sites understand how people use them

Cookies can do unexpected things used to profile users and

track their activities, especially across web sites

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How do cookies work?How do cookies work? A cookie stores a small string of characters A web site asks your browser to “set” a

cookie Whenever you return to that site your

browser sends the cookie back automatically Cookies are only sent back to the site that

set them

browsersite

Please store cookie xyzzy

First visit to site

browsersite

Here is cookie xyzzy

Later visits

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YOU

Searchengine

Ad

Search formedical

information

BookStore

Ad

Buy book

Ad companycan get yourname and

address frombook order and

link them to your search

Readcookie

Setcookie

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Web bugsWeb bugs Invisible “images” embedded in web

pages that cause cookies to be transferred

Work just like banner ads from ad networks, but you can’t see them unless you look at the code behind a web page

Also embedded in HTML formatted email messages

For more info on web bugs see: http://www.privacyfoundation.org/education/webbug.html

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Referer log problemsReferer log problemsGET methods result in values in

URLThese URLs are sent in the referer

header to next hostExample: http://www.merchant.com/cgi_bin/order?name=Tom+Jones&address=here+there&credit+card=234876923234&PIN=1234& -> index.html

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A Technological ApproachA Technological Approach

The Platform for Privacy Preferences (P3P) is a standard, computer-readable format for privacy policies and a protocol allowing web browsers and other tools to read and process privacy policies automatically.

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Who created P3P?Who created P3P?

World Wide Web Consortium (W3C) – a nonprofit, industry-supported consortium including researchers and engineers from over 420 institutions.

Participants in the development of P3P came from around the world, including representatives from industry, government, nonprofit organizations, and academia.

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Why was P3P created?Why was P3P created? To increase consumer trust.

“If the ability to spend is the fuel that propels the economic engine, then consumers’ trust and confidence in that engine is the lubricant.”

To protect privacy by allowing informed choice.Privacy is the ability of individuals to exercise control over the disclosure and subsequent uses of their personal information. Hence notice is fundamental to the individual’s ability to protect his or her privacy.

To make choice easy.Privacy policies are difficult and time-consuming to locate, to read, and to understand; and they change frequently without notice.

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How does P3P work? (1)How does P3P work? (1)1. User sets

personal privacy preferences on a tool such as a browser.

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How does P3P work? (2)How does P3P work? (2)

2. Browser requests privacy policy from a (P3P-compliant) Web site.

3. Browser compares the privacy policy with the user’s privacy preferences and acts accordingly. (Symbols, pop-up prompts, etc.)

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P3P Policy Elements P3P Policy Elements Include:Include:

Who is collecting these data? What information is being collected? For what purpose? Which information is being shared with others? Who are these data recipients? Can users access their identified data? Can users make changes in how their data is

used? What is the policy for retaining data? How are disputes resolved?

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Purpose Specifications:Purpose Specifications: Completion and support of activity for which data was

provided Web site and system administration Research and development One-time tailoring Pseudonymous decision or analysis Individual decision or analysis Contacting visitors for marketing of services or products Historical preservation Contacting visitors for marketing of services or products

via telephone Other purpose

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What P3P AccomplishesWhat P3P Accomplishes

Makes privacy notices easy to locate and easy to understand.

Allows users to specify their privacy preferences once so that they can be automatically compared to a web site’s privacy policy.

Assists users in making decisions about when to disclose personal information, how much, and to whom.

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What P3P Does NOT What P3P Does NOT Accomplish Accomplish

Does NOT replace privacy regulations. Can NOT protect the privacy of users in

jurisdictions with insufficient data privacy laws. Can NOT ensure the companies or

organizations follow their stated privacy policies.“P3P does not protect privacy, in and of itself. It does, however, help create a framework for informed choice on the part of consumers. Any efficacy that P3P has is dependent upon the substantive privacy rules established through other processes – be they a result of regulatory, self-regulatory, or public pressure.”

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Controversy over P3P Controversy over P3P

“In the context of proper legislation, P3P is the most promising solution to cyberspace privacy. It will make it easy for companies to explain their practices in a form that computers can read, and make it easy for consumers to express their preferences in a way that computers will automatically respect.” – Professor Lawrence Lessig, Stanford Law School.

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Controversy over P3PControversy over P3P

P3P is:a) Pretty Poor Privacy, b) a Pretext for Privacy Procrastination, andc) “a tacit acceptance of the great increase in the tracking and monitoring of our minor activities that take place over the Web.” – Karen Coyle, Information Technology Specialist, University of California

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Support for P3PSupport for P3P

Provides notice and consent Promotes transparency and

accountability Intuitive Flexible and global Worthwhile process

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Criticism of P3PCriticism of P3P Lack of enforcement Used as a procrastination tool Unclear legal consequences Importance of default settings Unable to maintain current experience Expensive to implement and maintain Overly broad and vague purpose

specifications Ultimatum-style communication

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More Criticism of P3PMore Criticism of P3P Consumer and business confusion Rejected by the European Union Lack of actual choice Assumes the need to gather

information Does not address third-party data

collection Lack of control over an irreversible

choice

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Basic ConflictBasic Conflict

What is the real problem?

Lack of knowledge about how information will be used?

ORThe gathering of the data itself?

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Universal AgreementUniversal Agreement

Enforcement mechanisms are needed.

“A technical platform for privacy protection…must be applied within the context of a framework of enforceable data protection rules, which provide a minimum and non-negotiable level of privacy protection for all individuals. Use of P3P in the absence of such a framework risks shifting the onus primarily onto the individual user to protect himself” – European Commission, 1998.

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Economic View of PrivacyEconomic View of Privacy Non-adoption of P3P and other

privacy-enhancing technologies is not due to technological flaws. It is due to economic incentives.

Rational consumers want some of their personal information available to producers. They will experience more privacy (e.g., less intrusive marketing) and reduced search costs if their true preferences are known.

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Complication: Secondary UseComplication: Secondary Use Customers can benefit from

collection and analysis of personal information by merchants with whom they transact directly.

If that information is sold to a third party that does not know the customers, that third party will use it more clumsily and reimpose cost on the customers.

The seller of this information has externalized these costs.

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Privacy as a Property RightPrivacy as a Property Right Data collectors can externalize the costs of

secondary use because current law gives them property rights in the databases they construct.

Alternative: Vest the property rights in the data subjects, and compensate them for use of their data.

Varian gives examples of how to structure information markets and set prices: http://people.ischool.berkeley.edu/~hal/Papers/privacy

Opponents of this approach would rather ban sale of personal information altogether and establish a true “right to privacy.” Relying on property rights to control the dissemination and use of personal information ensures that only the rich will have privacy.