Facebook's missing privacy chapter

Facebook's new semi-automated photo tagging using facial recognition technology has raised the ire of data protection regulators at the European Union.

The new feature, which was automatically enabled, requires Facebook users to opt-out by customising their privacy settings. And it's this that has the EU concerned, as it argues tags of people on pictures should only happen based on people's prior consent and should not be activated by default.

The EU may be worried, but few others appear to be as Facebook skyrockets towards one billion users.

Despite data breaches making headlines on a daily basis, Australians, and consumers around the world continue to willingly hand over their personal information to social networking sites, trading in security for connectedness.

Why do we trade our privacy so willingly?

Nigel Cameron of the Centre for Policy on Emerging Technologies says the world is currently lacking a real understanding of what online privacy means, missing what he calls “a language of privacy”.

“It's meaningless to say to people we want more online privacy because we haven't yet got into a modality in which questions have found their way into our policy community,” says Cameron.

“Every day we're a little more libertarian, every day our governments have less control over what happens through these technologies, for all sorts of reasons.”

For any real change to occur, Cameron hypothesises, it would take the collapse of a major internet brand in a privacy scandal. Something akin to what happened to BP, but without the oil reserves.

“All it would take is the collapse of one of these major brands to produce a situation in which overnight the unique selling proposition is your privacy: (companies would say) we will take the most care of your privacy on your terms, you'll be able to understand the privacy questions we ask you, and come what may that's our core value.”

Despite the posturing of the European Union, market-based solutions seem the most likely to solve growing concerns about privacy, since regulators are finding it difficult to write laws fast enough to keep up with the types of companies now dominating the online world.

As consumers wise up to the importance of their data, a different paradigm could emerge.

For example, says Cameron, why doesn't Google offer a service that allows users to pay one cent per search, and in return opt-out of having their behaviour tracked?

Everyone loves the fact Google and Facebook offer almost everything for free, but it pays to remember if you're not paying for a service you are often part of the product, and not the final consumer. In many cases advertisers are, and they're paying for your data.

“You're basically being bought off in a way that makes it difficult for you to reflect critically on an operation which has its own interests,” says Cameron.

It's time we wised up.

Mobile tracking might be just the trigger required argues Bob Egan, mobility expert and chief executive officer of research and advisory firm Sepharim Group. Egan recently visited Australia, along with Cameron, to speak at AMP's Amplify event for thought leaders.

As marketers including Google move from assuming what people are doing to anticipating what people are doing, using location-based data, a shift in consumer behaviour will occur argues Egan.

“Consumers are going to realise that the information about them has a lot more value and shouldn't be given away for free.”

What might such a world look like?

To begin with, instead of offering to pay for a service in return for being invisible online, consumers might seek some kind of financial reward or compensation for being open with their data.

As long as that privacy isn't abused, argues Egan, people are going to start making decisions about who they'll sell their activity information to.

One real life example of this kind of behaviour in action is Empire Avenue, a virtual stock market for people and brands, based on their social media clout.  Empire Avenue uses a virtual currency called Eaves to allow users to purchase shares in other players. Eaves can be purchased with real-world currency via PayPal, but cannot be exchanged for real-world currency, though features are expected to emerge to allow players to exchange Eaves for real-world rewards.

Barter arrangements seem the most likely option to emerge – think loyalty points and vouchers in exchange for data. Facebook Forex anyone?