In the Press

Privacy Experts Trade Barbs Over Studies

By Ray Schultz

The fur was flying in the narrow world of privacy experts today as one figure trashed another’s report. And the war of words continued in interviews.

Michael Turner, an economist who left the Direct Marketing Association last month to form the Information Policy Institute, issued a lengthy critique of a study published in March by privacy consultant Robert Gellman. And it did not appear to be a strictly academic exercise.

Gellman had criticized several industry sponsored privacy studies, including one by Turner, as having "serious flaws, poor definitions, and questionable methodology."

But Turner countered that Gellman’s study is "flawed in so many ways, that for any legislator to use it as the basis for such a wide-ranging bill would be a great disserve to the millions of American consumers who rely on our government to protect their privacy."

As to which legislator that would that be, Turner said in an interview that "The Beltway has read it, and linked it to Hollings." Sen. Fritz Hollings introduced last month introduced the Online Personal Privacy Act of 2002, which would mandate an opt-in for use of sensitive personal data.

And what erroneous conclusions did Gellman draw?

For one thing, Turner debunked Gellman’s seeming argument that consumer privacy concerns are all equal, requiring one response. Today’s information economy is based on "a heterogeneous network of business practices that are not conducive to ‘one-size-fits all’ approaches," Turner argued.

He continued that Gellman lumps all consumer concerns together—everything from identity theft to old-fashioned direct mail— and that opt-in is not the solution for all of them.

In an interview, Gellman said he never advocated one approach, and added that his report did not recommend opt-in or anything else.

But Turner countered that while Gellman says he didn’t suggest opt-in, "he sees it as an elixir for every privacy woe that’s ever afflicted anyone. You can’t have it both ways."

And he added that Gellman’s effort to quantify the cost of not having an opt-in rule is "premised on dubious assumptions." (Gellman had written that "a privacy sensitive family could spend between $200 and $300 and many hours annually to protect their privacy).

"People have their telephone numbers unpublished and abandoned shopping carts for reasons that have nothing to do with privacy," Turner argued.

Turner also argued that "Gellman’s failure to disaggregate business processes leads him to assume without proving that information sharing is part of an old and now-discredited business model."

And he lashed out at Gellman’s alleged suggestion that the American information business system is largely without government oversight. (Gellman written that "credit data is subject to relatively strong privacy laws but marketing data is almost completely unregulated.")

Turner’s view: "A massive body of law already regulates the flow of all kinds of data in the United States, especially sensitive financial, medical and children’s data that citizens care the most about," Turned wrote.

Turner, an economist, also challenged Gellman’s prediction that permission-based like Yesmail.com are setting the future course for direct marketing," and that many investors lost money on dot-coms whose business models were "based on exploiting personal information obtained from Internet users."

"Many infomediaries and permission-based online retailers were victims of the dotcom implosion (certainly not because they weren’t privacy sensitive." Turner observed.

He concluded that the Gellman study could be "substantially strengthened by toned down the rhetoric and rethinking some of its claims."

Gellman had not seen the Turner report when contacted by DIRECT Newsline. But he reiterated his view that some industry privacy studies are not objective.

"They take a preordained perspective," he said. "My study recognized that there was another side."

Gellman’s study, "Privacy, Consumers, and Costs," was sponsored by the Digital Media Forum and funded by a grant from the Ford Foundation, does not represent the views of either group, Gellman said.

Gellman added, "I know that privacy has costs for business—I embrace that—but it has costs for consumers, too." He concluded that there is "plenty of room to discuss points of view."

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