Social Media's Password Law Teapot Tempest

As of November 2013, 12 states have passed so-called ‘social media password’ laws. These laws are designed to prevent employers from asking existing employees or prospective applicants for their credentials to access their social media sites. The intent of the laws is to prevent employers from prospectively, and possibly erroneously, getting an idea of the behavior, opinions, lifestyle or actions or existing or prospective employees so as to, ostensibly, determine their current or future merit as employees, and, I guess, to pre-judge whether or not this person truly represents the ‘values of the company’. Companies are still free to view social media pages of people that have no restricted access on their sites, have information that is publicly available, are open to all, or are voluntarily offered by the employee/candidate. (As an amusing aside, the names of the laws range from the innocuous and vague – ‘Internet Privacy Protection Act in Michigan’ – to the laser-focused and definitive – ‘User Name and Password Privacy Protection Act’ in Maryland.)

Since mid-2012 there has been what I can only define as a legislative vogue as states trip over each other to pass these kinds of laws. I wonder: is there really some kind of epidemic among employers or HR departments asking employees or interviewees for their social media passwords? You would think there was by the kind of activity you see in state legislatures on this topic. The issue began in Maryland from a case where an interviewer requested a Division of Corrections officer’s Facebook account information during an interview after the officer returned from a leave of absence. Rumor has it that the request was more of a demand that the officer surrender his credentials, or lose his job. You might reasonably wonder why we need laws like these when people are perfectly happy to post and tweet all kinds of self-sabotaging things about themselves and their opinions on a variety of topics without any kind of restrictions or privacy controls in place.

So really, why the need for laws to eradicate the scourge of social media password requests like it’s the polio of our age? First, demagoguery aside, I think the drive is primarily perception. It shows that politicians who are often accused of doing nothing can actually show some bi-partisan cooperation once in a while and pass a law benefiting their constituents. Second, it makes the politicians look like they are in-tune with technology and are addressing real-time concerns about issues that real people can relate to.

So what’s the fuss? I think most companies (finally) realize that protecting their employee’s privacy is as important and relevant as protecting the data of their customers. You want to send the right message to employees that ‘we care about you’, yes? (FYI to HR Depts: You know, that kind of stuff does help attract the right talent). Altruism aside, the concern of many companies, especially those in the financial services and academic worlds is the conflict that some of the existing laws have on employee oversight vs. employee privacy. Most states have an exception to the law if the request is related to an investigation of alleged employee/student misconduct or illegal activity or to ensure “compliance with securities or financial law and regulations.” But not in all cases! In fact, not in Maryland, Michigan or New Jersey. For example, once cooler heads prevailed and the New Jersey law was amended, a provision in the law originally said that no access to employee social media was allowed “in any way.” This significant restriction would have posed an enormous challenge for financial institutions that must oversee and audit (per the SEC or FINRA) what their registered representatives are saying to customers about financial products, returns, performance, etc. If access to what your employees were saying (possibly as a representative of your brand!) is not able to be monitored and reviewed, how could an institution reasonably say that they were providing supervision of their employee’s actions?

In a worst case scenario for employers who operate in multiple states, they may have to one day decide: whose law do I violate? The State of Maryland’s or the SEC? So far, this case has not been tested in a court of law. Once it does, the teapot may just bubble over.

Bitcoin: Bank's Betamax?

Is anyone else as fascinated by the concept of Bitcoin as I am? For those of you who are not aware of Bitcoin, it is a virtual currency which is nothing more really than encrypted computer code that is accepted as a form of payment among users and businesses. The value of the currency fluctuates and is set by a market and not by any country or central bank. (As of October 24th, 1 Bitcoin is worth $196 USD) Bitcoin is a system to replace a centralized banking intermediary (that we have to trust to accurately record electronic financial transactions), with a decentralized intermediary that we don't have to trust. That decentralized intermediary is the network of Bitcoin users.

People frequently call Bitcoin a peer-to-peer electronic currency, which like music and file sharing peer-to-peer networks, implies that you could share or send bitcoins directly to someone else with no intermediary involved. However, there is a third party involved; it's just that the third party is a decentralized network of people rather than a single centralized institution like a bank. It is 'peer-to-peer' in the sense of being a payment system under the control of no single institution, but it involves more than just two parties to a transaction. What is also interesting about this virtual currency is that, unlike hard currency and bank notes which can be printed in quantities at any time by central banks, the Bitcoin money supply will be capped when it hits a pre-determined total number of 21 million bitcoins.

To me, the most interesting aspect of this new technology is what the threat might be to traditional financial outlets and channels, like banks. Bitcoin and the threat it might contain, if more broadly accepted and adopted, may go beyond what alternative payment channels (e.g. PayPal, Square) now pose to traditional financial institutions. More and more mainstream websites and retailers are starting to accept Bitcoin as a means of payment. The biggest issue to more widespread acceptance and usage of this currency now, however, is the perception of Bitcoin as a way for criminal activities to hide behind and be facilitated. Money laundering, drug purchases and even gun purchases allow buyers to avoid the usual screening and background check processes.

Financial institutions, to the degree that they are aware of or acknowledge the existence of alternate currencies like Bitcoin have argued for their demise and asked legislators to rule them as unlawful for some of the reasons noted above. But I think it may be closer to the scenario which existed when the Betamax player was released in to production in 1980s. In the early ‘80s, Jack Valenti, head of the Motion Picture Association of America lobbied against the creation of the VCR. Valenti actually said, in front of Congress no less, that the “VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” Yet, what did the VCR eventually do the movie industry? It saved it! Imagine how much better off the industry might be today of the fear of that new and unknown technology was embraced rather than discouraged. Let's hope that financial markets and institutions in general can learn from past, otherwise, they may be doomed to repeat it.

When Privacy is on the Menu, But You Order off the Menu...

"Vicarious goal fulfillment." 

You may not have heard of this phrase, but you may unknowingly be guilty of doing it. Here is the idea behind the term: In a recent New York Times article, we learned why otherwise healthy-eating people sometimes take a very unhealthy u-turn on their diet. The psychology of why this occurs struck me that this kind of similar self-defeating behavior in eating, can also make its way into privacy-related decisions. 

More so than ever before, restaurants and other venues have begun to add healthy food options to supplement their classically unhealthy offerings. The thought is that making nutritious alternatives more available will lead customers to select the superior food choices. However, a number of studies have shown that merely having but one healthy food option on a menu of unhealthy choices cause people to both select the least healthiest option on the menu, and yet feel still like they have fulfilled their goal of healthy eating - even if they didn't choose the health option. And, ironically, the study goes on to say, this consequence is strongest for people with a high-degree of self-control. That is, people who should know better.

Think this topic can't possibly relate to privacy? The parallels are striking. Think about how the mere presence of the privacy policy on a mobile app you use on your phone or tablet comforts, or how the policy on the website you visit gives you a false sense of security that the company has a privacy policy to begin with, and that they actually honor the actions outlined in that policy. I have written about this before, especially where we read that consumers outspokenly demand high levels of privacy and strict adherence by businesses to the use of the customer data they collect, yet their behavior in many cases blatantly contradicts what say they want. (Trade your password for a bar of chocolate anyone?)

Just like sex sells, so do the unhealthy food selections on most menus, even if healthier options exist side-by-side. The restaurants say that they only offer the people what they want, and it is not their dominion to police people’s eating habits or modify bad habits. It is still a free country, yes?

So why shouldn’t we take the same tact with companies, browsers, applications or services that simply give the people what they want – entertainment, free access, little or no costs apps, etc. – and their privacy be damned? Does the notion of privacy hold more currency than a person’s health? As long as there is no unfair or deceptive practices occurring, and there is full disclosure on what is being done with the data, why shouldn’t people be allowed to act in a manner that is not in their best self-interest? We do it every day with food, tobacco, alcohol and spandex already. Should privacy be a loftier goal? If it is, then it should be achieved directly, and not vicariously. Like seeing a Cobb salad on the menu, but ordering the Double-Double Bacon Cheeseburger.

Boston, Big Data, Privacy and other Trade-offs.

As the world awaits the resolution of the Boston marathon bombers situation, one thing is clear: what led to their identification and, hopefully capture, was a combination of two elements: Big Data, and what might be termed the ‘lack of privacy’.

The contribution of Big Data to the identification of the criminals is evident: by collecting and collating millions of images and videos from myriad sources, the FBI and police were able to do a phenomenal job of pinpointing likely suspects who did or were likely to have committed the crime in question. Getting to the same place without Big Data may have been possible and eventual, but only because of a preponderance of data and the correlation activities was the situation that is happening now able to occur so quickly.

As to the ‘lack of privacy’ element, this was the obvious result of the hundreds of video/CCTV cameras in question all around Boston, and most evident along the marathon route that captured (in astounding clarity, by the way) the two primary suspects toting around black backpacks.

At this point, I wonder if we’ll see any hardcore privacy advocate step-up and say that though there was a positive by-product of all of this covert surveillance and yielding of privacy expectations, we should still not indulge the urge for more of the same. I doubt anyone will be so fearless. On the other side, it may be more likely that we will see more advocating for the existence of or proliferation of the ever-present ‘eye in the sky’ that is leading the authorities to an efficient conclusion of this tragic event.

I think the conversation will continue, as it usually has, around the practicality of trading-off more security for less privacy, along with the benefit to the greater good (i.e. more personal privacy) versus the loss of solitude or discretion, even in public places. At this point that most of us think we have no or should have no expectation of privacy in public places, but if you watch closely some of the surveillance footage that captured the two suspects, you can see other people doing things that I am sure they would not necessarily want broadcast on public TV (that is, scratching places and picking places our mothers told us not to…).  

The easy question at this exact moment is ‘Do we ask folks to surrender their humility to the greater good of catching bad guys?’  I think many people at this point in time, with emotions running so high at this horrific and senseless act of brutality, would say ‘Absolutely. That is an easy trade-off.’ And so we tolerate the inconveniences and make sacrifices.

What I think is the ultimate question though is ‘What is the right amount of trade-off?’ Where is that sweet spot of just enough security and just enough privacy? The answer is of course, highly personal and subjective; it is also contextual. Though most of us agree (or are not disagreeing) with what is being done by the authorities in Boston right now, I am not sure that we would accept another lockdown of a major American city for anything less than the most extraordinary series of events. Though data gets bigger all the time, our tolerance for trade-offs, however, gets smaller.

In 2013, Companies will need to differentiate themselves with data (Guess whose data?)

As more online applications and services begin to proliferate in the webisphere, the likelihood is that the similar services will all begin to converge to sameness as competitors race to fill in the void of uniqueness. As the characteristics of distinction begin to dissipate between all of the various services and applications, there leaves but one thing that the companies will rely on to differentiate themselves from their competitors - data. And of course whose data will they use to achieve that distinction? Yes, of course. Yours.

If information is the new oil of the 21st century, then companies will need to constantly be 'drilling' or mining for it in the form of data collection - be it overt or covert. Right now companies that collect data for personalization purposes do it in a way that reminds me of awkward and unsophisticated teenagers fumbling their way through the initial stages of romance. But a few years from now - 5 years at the most - the level of personalization that online companies will offer up to users will be so slick and fine-tuned it will be transparent to the average person how the decision to offer up that product was arrived at.

Remember that scene in the movie, Minority Report, when Tom Cruise was walking into the Gap store and the store's cameras were reading his eyes and offering him personalized ads and even clothing suggestions? That is the future - both literally and figuratively - for consumers. The irony of course in that scene is that Tom Cruise had just had his eyes replaced with another set from a dead person so that the police would not be able to successfully track him. If you recall the scene in the movie Cruise had had a set of eyes from a Japanese man, so the ads (and the accompanying hologram lady) was personalized for him. ("Welcome back to the Gap, Mr. Yakamoto. How did the assorted tank tops work out for you?").  This is approximately the state where we are at now with personalization, all due to the rudimentary way data is collected on us now as we move across mobile platforms online.

Most (rational) people agree that the Faustian bargain that the internet has offered us all in exchange for its low or zero cost is the trade-off for our data and small pieces of privacy. You would be hard pressed to find people willing to pay for the free service they have enjoyed for the last 10 or fifteen years, just so that they don't see any ads. What most of us object to really I think, is the misguided ads or offerings that waste our time and screen real estate. (Do I need to see ads for e-cigarettes if I am not a smoker?)

Big Data is what it's called but it might be better called 'Big Dumb Data.' At least for now. Yet, some companies are very rapidly moving up the pace of innovation and sophistication with the use of the resources that they are filling their Oracle databases with. Slowly but surely you can see the flashes of refinement happening, and you see a unique company or two take the lead with the information that they possess and truly differentiate themselves from their competitors. As I said, 5 years from now when  we may even be at a point to be able to make sure it is indeed Mr. Yakamoto who is in need of some more tank tops when the pitch is made to him. And the only way that can be done is with data.

A gift to yourself this year? How about a better privacy profile?

A headline today in the Motley Fool's great online financial site entitled The Best Gift to Give Yourself This Year, made me think about what might really be a great gift to give yourself, and at little to no cost. How about the notion of enhanced privacy? Or really what we are talking about is more anonymity, especially online.

In the last year I have seen and have personally used a number of great technological tools and best practices to help minimize my exposure and vulnerability to excess data proliferation.

Now, I am no technological Luddite or privacy alarmist, and I believe in and understand how the Internet works and how the low-cost model has benefited the modern world thanks to advertising. Yet, I am sure you have all seen quite often in the press the exaggerated reviews about services and applications that if used on your smartphone, would threaten the very existence of Western Civilization!?!!. I benefit fro many of these applications myself, but we are very very quickly coming to the point where the value proposition is tilting too favorably in the other direction against regular consumers. 

First up a couple of behavioral changes that you should consider adopting in 2013. For example, don't get in the habit of logging in to new applications or websites with your Facebook or Twitter or any other 3rd party credentials. I realize it is expeditious and convenient, but it allows not only the 3rd party site (Facebook, Google, Twitter, etc.) to continue to build a profile of you, but it lengthens the bread crumb trail of your actions and activities on the web. If you every want to disappear forever, you'll have a rough time of it since you left so many clues as to your possible whereabouts and past behaviour.

Second, start to take notice of new windows that pop-up in and around websites offering you the ability to control the cookie and ad choices that are shown to you.  You can begin to be much more proactive about what cookies some websites are allowed to leave on your machine when you visit that site. Most European websites (and some of the more forward-looking U.S. sites) now offer up an express consent option when you visit the site for the first time, to control how the site will track you now and in the future. A great product from a company called Evidon which services up the "AdChoices' icon on some websites will allow you to proactively opt-out of being tracked by hundreds of tracking companies with one click on a page on their website. Thru Evidon's Open Data Partnership (ODP), users can easily manage the profiles that different companies have created about them and their interests.

As for technology, and for the more paranoid among us, I have been using a browser called Tor lately that really hides or disguises your activities online. The service works by 'bouncing' your communications around a distributed network of relays around the world you connect to which is run by volunteers (i.e. you, if you use the browser). Tor prevents someone from watching your Internet connection and building a profile on you via the sites you visit. An added benefit is that the browser prevents the sites you visit from learning your actual physical location, and it lets you access sites which are blocked - which your IT guys at work will no doubt love. (as I was writing this blog,  I fired up the Tor browser and the IP address that my machine was displaying to the outside world made it appear as though I was in the Czech Republic. Good stuff!) 

This is just a short list of technologies and behavioral changes that you can easily adopt to  improve your privacy posture in the new year. Almost all of these services and activities are free. In most cases, the cost is nothing more than a few extra minutes of your time to set a profile or check a box on a website. Generally, there is nothing to pay for. All you need to do is start to pay attention.

Happy Holidays and Happy New Year!

"Secure data access in a mobile universe" - Interview with the Economist Intelligence Unit

I was recently interviewed by a journalist,  Lynn Greiner, who was working on a paper for the EIU and we talked about data security, mobility and the ever-common phenomenon of BYOD (bring Your Own Device to work).  

The full white paper is here (http://tinyurl.com/a76vfow) but here are some excerpts:

Preventing the data from being stored on a mobile device at all is another strategy. Al Raymond, vice president of privacy and records management at Aramark, a US foodservice supplier, says authorised users who need to access company information remotely do so over a secure virtual private network (VPN) from their laptops or mobile devices. No data other than email are stored on the device itself, making it relatively easy to protect corporate data assets should the employee leave, or lose the device.

Some companies that have BYOD policies expect executives and employees to make sure they have necessary software on their devices, at their own expense. Others reimburse all or part of the cost of programmes required specifically for business. Proper configuration and good usage practices must be monitored and enforced centrally, Aramark’s Raymond says, adding that regularly reinforced security awareness training also keeps secure data access fresh in employees’ minds.

Aramark’s Raymond says his company takes an alternative approach to device-centric mobile security administration. Workers use the mobile device purely as a viewer, leaving company data on Internet-connected (remove this) securely accessible  corporate servers that do the heavy computing, and not on the device itself.

The average cost of a corporate data breach incident hit US$7.2m in 2010, according to the Ponemon Institute, a consultancy. That’s more than double the average cost in 2005. Mr Raymond thinks that these figures ring true, given the number and types of breaches, adding that there are hundreds of small incidents each year and a few major ones that may hit US$25m–US$500m.

Before the introduction of Aramark's formal mobile policy ten months ago, people had no defined rules telling them what devices and operating systems were eligible to be connected to the company network. With the new policy, entailing role-based access and approved devices and configurations, the company knows precisely who has access and to which data. "It's no longer a wink and a nod," Raymond says. The higher the visibility of your program, the more likely it will be adhered to.

Mr. Raymond says that, although his business doesn't require it, separate environments for business and personal use are important, but if the policies surrounding them, or any other security measures, are not enforced, there will be issues. He says he is always surprised, when speaking with his peers, at how much of security in large organisations is just "smoke and mirrors". The words are there, the enforcement isn't.