The Privacy Premium....a.k.a. the 'Privacy Tax'

To continue in the vein of my last post, I wanted to dilate a bit on the idea of the privacy premium. As I started earlier, I don’t think it is too unreasonable to imagine a society in the not too distant future where privacy and security, or the privilege of it, becomes monetized enough to the point that it is not just marketed as a competitive advantage, but as an added ‘feature’ that company will charge you to implement.

We have had for years small examples of this idea in practice. Think about the security on your house; you have locks on the windows and doors but that’s about where it ends. For an additional cost, you can contract with a security service that will provide additional security piece of mind over-and-above what you practically get for free now. Recall my previous blog example of how today you pay an extra cost for not having your name in the phone book. Think about that for a second – we actually pay extra so that people can’t find us! See what I mean? What was once a status symbol, has become a privacy albatross.


At the far end of this spectrum will exist a service that erases all of your digital existence from any and every site or network you ever used or registered. So, no Google or Bing search will ever bring back any indication that you ever even looked at a computer. All for a fee.

Today, we already have two very stringent state data security laws, Massachusetts and Nevada, which call for, among other things, encryption of sensitive on any devices that are portable (what device isn’t these days?). Any size company that holds or processes the data of the residents of these two states are impacted, regardless of whether or not they are a ‘financial institution.’ Encrypting data is not easy; and it is not cheap. Small companies will inevitably be unduly burdened. The extra costs that these companies incur will have to be passed on somehow. Where and how do you think the costs will go and in what form? Higher costs of goods and services to the end users, of course. Translation: a privacy tax.


How does this sound for a marketing pitch? “We back-up all of our customer’s data on media that goes offsite every week to ensure continuity of business. Want to ensure that your data is truly private and secure, and from the threat of being lost or stolen? Of course. You will want to ensure that you select the “Assurity” option when you enroll in our program. For only an additional $5.95 a month, you will have the piece of mind of knowing that your personal information is put onto our secure, AES 256-bit encrypted tapes which reside in a hardened vault, safe and secure from prying eyes….”

Privacy À La Carte

Maybe you've already heard of a recent incident in a Philadelphia suburb where a school district gave a student a laptop to take home and use. What the student did not know was that the web cam on the laptop could be remotely activated and images could be captured and viewed by teachers. (Ostensibly, the laptop was configured to capture images of the machine’s user if it was lost or stolen.) The way the student found out that something was wrong was that a teacher reprimanded him for “inappropriate behavior” – at home! (Via the webcam, the teacher thought the student was taking pills, but it tuned out to be Mike & Ike’s candy. I know, I know…happens to me all the time, too.)


The lack of boundaries of privacy has only been exemplified with this web cam issue. The lines are increasingly grayed between where one’s responsibilities end and another’s privacy begins. Technology has all but shattered the partitions that used to exist in society used to areas of black and white. What is curious though is that the boy  and his family are screaming about his privacy violatd, but he and his entire family have already begin the media tour, appearing on CBS' The Early Show the Saturday after it happened. (Translation: We value our privacy, unless we can extract some value out of it....)

The genie is out of the proverbial bottle with the state of privacy we once enjoyed. I envision a near future where privacy is no longer the quasi-right that people think it is today (BTW, the word ‘privacy’ is not mentioned even once in the Constitution); it is or will be a monetized privilege. Sort of like a drivers’ license is. Consider privacy as a ‘pay for service in future. You want privacy? You pay extra – like the extra cost you incur for not having your name in the phone book.

As we surrender ourselves evermore to the Siren’s call of convenience that technology sings to us, you either plug your eyes and ears (that is, stay off the grid, or at least off Facebook, Twitter, MySpace or any reality show), or do what Ulysses did when he and ship passed the island of the Siren’s; he had his crew tie him to the mast and refuse to let him go no matter what he said.

That is, he dealt with it

Note: Wikipedia notes that “the term "siren song" refers to an appeal that is hard to resist but that, if heeded, will lead to a bad result”.