Internet companies are leveraging their advertising dollars by compiling and exchanging personal information that tells more about who we are and what we do than we might ordinarily admit.
Internet companies are leveraging their advertising dollars by compiling and exchanging personal information that tells more about who we are and what we do than we might ordinarily admit. Watching and being watched from afar, many of us have been overwhelmed by technology and commerce, and we have let our defenses down.

Electronic markers called "cookies" monitor and unflinchingly report our online movements to advertisers and others who are curious about our browsing and surfing habits, or paid to report or exploit them. Information that people casually or unwittingly disclose on faceless Web sites may be bought or subpoenaed by their bosses, spouses, insurers and banks. And the corporate appetite for minutiae, more ravenous than ever, may undermine any right of privacy we believe the Constitution guarantees. ASnitchware@ programs can now track the books and magazines we read and TV shows we view.

The trend is pernicious and irreversible. After all, the data-collection juggernaut efficiently and profitably uncovers and catalogs clusters of consumers with shared interests (read: buying patterns).

The Federal Trade Commission (FTC) recently endorsed a privacy policy drafted by a consortium of nearly all the major online advertisers. At first blush, the plan appears to advance the consumer's agenda.

It requires that consumers be notified about Internet profiling practices and be given reasonable access to their cyber-profiles. It allows people to opt out of an advertiser's database. Most important, it prevents companies from using personally identifiable information of a sensitive medical, financial or sexual nature, or Social Security numbers.

But, on closer examination, the industry's voluntary plan stops short. It specifically authorizes Internet-based advertisers to merge personally identifiable information with the record of an individual's online habits. Although marketers have been in no rush to mine private data, the Orwellian prospects are chilling: A dossier on each of us may be created, maintained and possibly exploited at the whim of any advertiser.

One tech firm hired by 11 drug companies is already testing the pact's limits. It is recording activities on its clients' sites to see who is interested in HIV or other specific drugs. The firm knows whether a visitor is a consumer, a physician, a journalist or a government official, and it plans to identify the people it surreptitiously tracks.

The FTC has backed away from its earlier call for a federal law to protect consumers' online privacy comprehensively. Weakened in its resolve, it is pressing Congress merely to ensure that all Internet advertisers follow the industry's modest, even dangerous, initiative in self-regulation.

But why, too few ask, should we relinquish our privacy and become willing victims of technology that accommodates the fast and easy collection and use of our personal data?

We dare not submit to surveillance without a fight. To allow our hard-won civil liberties to be compromised invites their dismantling, right by right.

The FTC's backpedaling leaves no alternative for those who are worried but self-censorship and self-help. Some already feel forced to cover their electronic tracks with encryption techniques. Others are adopting digital pseudonyms.

This fall, the U.S. House of Representatives is expected to consider creating a special commission to examine concerns about privacy in the information age. But, if history is a reliable predictor, only when abuse leads to outrage will the political process responsibly protect the interests of the individual.

In the meantime, public confidence in Web commerce remains fragile. And, ironically, we run the risk that the fear of scrutiny will stifle the very creativity and eccentricity that have built the Internet.

About the Author

Marc Lane is a business and tax attorney, a Master Registered Financial Planner, a Registered Financial Consultant, and a Certified Investment Specialist. Marc is the author of 30 books on business organization, taxation, and personal finance. His newest book, "Advising Entrepreneurs: Dynamic Strategies for Financial Growth" draws from his experience working with those who have successfully built their businesses. Marc is an Adjunct Professor of Law at Northwestern University and an Adjunct Professor of Business at the University of Illinois. His practice areas include Individual Taxation, Corporate Tax Planning, Business Tax Planning, Estate Planning, Investments, Retirement Planning,Elder Law, International Trade, Business Law, and Wills, Trusts and Estates. Additional articles, case studies, and a free email newsletter are available at www.marcjlane.com.