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Summary:

If the mobile industry isn’t proactive in addressing consumer privacy head-on from a technical, business, education and compliance perspective, there will be a strong push to pressure the government to regulate an opportunity that hasn’t fully blossomed yet — and in the process, hamper its evolution.

Over the past few months, the debate over privacy and its role in the continued evolution of information technology has been reinvigorated. To some extent, the controversy isn’t new, nor is it surprising. Whenever there’s disruption in the market and the boundary conditions are tested, there’s going to be consternation.

It’s also clear that if the mobile industry isn’t proactive in addressing consumer privacy head-on from a technical, business, education and compliance perspective, there will be a strong push to pressure the government to regulate an opportunity that hasn’t fully blossomed yet — and in the process, hamper its evolution.

In the digital economy, trust is the bedrock of the relationship between consumers and brands. Privacy is about the perception of control and transparency. While we expect corporations to roll out terrific products, any direct interaction with them should assume that our private information is not up for sale (at least not without explicit authorization). Any damage to that trust can not only destroy a brand’s reputation but open it up to lawsuits, government oversight and legislation.

Yet the mobile ecosystem, like that of online, has failed to take the issue of privacy as seriously as it should. The best way to address the issue of privacy is by ceding “control.” Only by giving customers the ability to determine when, how and who can access their data can the various facets of consumer privacy be adequately addressed. The more control customers have over managing their privacy, the more willing they’ll be to share their tastes, intent and desires — both explicitly and implicitly.

Mobile provides unprecedented capability and opportunity to personalize and target, to make every message and impression count. What it doesn’t provide is a way for customers to control what comes to them via tools they can access with the touch of a button or a finger. After all, one might be only interested in food- and beverage-related promotions and advertisements during the lunch hour or on vacation and will consider them an intrusion and/or ignore them in out-of-context situations.

Companies should work diligently to design their mobile campaigns around the following basic rules:

  • Be transparent
  • Listen to your customers
  • Give them control and access
  • Put strong policies, procedures and technology in place
  • Be aware of local laws/customs and cooperate/educate regulators
  • Provide value — in the form of savings, convenience, efficiency, timeliness or social currency
  • Ensure your partners adhere by the same principles (for example if users expunge personal data from your site, the relevant data should get deleted from your partners’ databases, too)

Another thing to keep in mind is that privacy requirements are going to be as diverse as the consumers using mobile services. Some will demand absolutely no leakage of information while others will care less. Some will like a simple on/off switch that controls privacy across applications and services with a touch of a button. Others will prefer 1,000 granular options to manage how their lives are shared and will get upset if their experience isn’t personalized to the nth degree. Solutions should address this wide array of requirements and not segment all users into one.

The mobile industry also needs to educate its consumers about sharing, privacy and advertising. Its various members need to work much closely together — warring factions only impedes progress. Finally, it needs to put forth effective enforcement strategies to weed out bad actors (and make sure its industry stalwarts aren’t the ones violating its guiding principles).

The mobile medium provides context, immediacy and personalization and a way to blur the line between ads and relevant, useful information that users can embrace. The winning solutions will be the ones that empower user privacy, not abuse it. Our focus should be to turn privacy into a competitive advantage, not a barrier.

Chetan Sharma is founder and president of the mobile and voice communications-focused Chetan Sharma Consulting and a GigaOM Pro analyst.

  1. The points covered in this post seem valid, but it would help to have some specific examples of what a user should be able to control, and how mobile privacy issues should be made transparent.

    With most Android apps I download there is a broad warning identifying the types of data that app will have access to on my phone. Although I can guess about how or when the apps will use the data they have access to, there is no real way to know from either the download process or my use of these apps.

    Forcing greater disclosure and user control of mobile apps could significantly increase legal liability, support cost and user dissatisfaction. Do I have to approve each read of my contacts database? Do I get to approve which contacts are being read, and how the data will be used? Imagine zillions of Vista-like pop-ups as you’re trying to use Yelp….

    On the other hand it’s a matter of time before some app hoses millions of users with privacy leaks (who doesn’t store a few passwords in their Outlook contacts?).

    Some apps should just come with warning labels attached. I checked into a medical office building recently and saw that Pam was the mayor of that building. Looking at Pam’s profile, I noticed that she was the mayor of 3 restaurants and a nail salon in a 4-block stretch of Taraval Street, and also the mayor of a bus line that went from her neighborhood to the medical building. Not tough to figure out where Pam lived and worked, and I hope it doesn’t come back to haunt her.

    And this leaves aside the issues (privacy, transparency, potential for abuse) of carriers being ordered to share data streams with national security organizations.

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  2. [...] Privacy As a Competitive Advantage in Mobile Posted on May 31, 2010 by sectorprivate http://gigaom.com/2010/05/31/privacy-as-a-competitive-advantage-in-mobile/ [...]

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  3. Fully agree with your article, great analysis. Privacy has and will alwyas be an indivuduals freedom an dthey should have the final say on when to share and with whom to share their personal information

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  4. There’s already a solution that meets your requirements for convenience, privacy and control on Smartphones. Do a search for the company name below my name.

    Cheers,

    Peter
    5o9 Inc.

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  5. I think you’re sixth suggestion needs to be bumped up and expanded a bit. Today, providing value, while essential, is not enough. Companies need to start doing a LOT better of a job in marketing the value of openness to the consumer.

    Easier said than done. Privacy is an emotional issue. It is natural to react strongly even when you perceive that your privacy might have been violated, regardless of specifics. As you note, once this has occurred, significant effort and capital must be spent in order to address this response.

    On the other side of the spectrum, is consumer openness. So far, companies have been relying, essentially on consumer ignorance for adoption. Sharing this sort of data is still relatively experimental and the broad ramifications –good and bad– of doing so are on the horizon. However, probably as early adopters become parents, the era of casual sharing will be over. Each public outburst of web privacy violations (e.g., Buzz, Facebook, etc.) hastens that end.

    In the face of real and emotional concerns, the value of a custom and targeted web experience must be clearly spelled out, in order to achieve consumer openness. Whether it is being the recipient of a real time relevant promo codes while shopping, having the menu and reviews of a restaurant you’re pointing your phone at displayed, or simply being able to type in a search for a particular product or service and get local results, consumer and potential consumer alike must already know what they are getting out of the deal.

    On a related note, I think we ready for folks to start dabbling more in unified web privacy management systems. Google, it seems to me, would be an ideal candidate, as they would benefit from the positive PR of providing consumer controls, continue their campaign of open technology, and reinforce their domination of web portal technologies.

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  6. Paul, Sanjay, Peter, Jack, thanks for your comments, suggestions. i will expand on some of them in future posts.

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  7. [...] GigaOM – Privacy as Competitive advantage in Mobile [...]

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  8. [...] may also want to think about how to allow a little more customization in its permissions, rather than just giving developers a binary choice between read-only and full write access. [...]

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  9. [...] GigaOM – Privacy as Competitive advantage in Mobile [...]

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