Profiling

Online profiling generated heated opinions for both pro and con as e-commerce achieved prominence in the late 1990s and early 2000s. A method by which online businesses trace browsing and shopping habits of Internet users and compile detailed information files for future marketing purposes, online profiling was seen at one and the same time as an invaluable marketing tool and an affront to Internet users' expectation of privacy.

The most obvious and overt way in which personal data is collected electronically is via online forms, which are often required when making a purchase or downloading software. Items such as names, e-mail addresses, and so on are stored in the site owner's database for future reference. Usually, such companies maintain privacy policies, available to customers, that spell out exactly what will and will not be done with accumulated information.

Other methods of online profiling are far more covert, however. One of the main profiling vehicles employed in the 1990s and early 2000s worked in concert with the banner advertisement. Many companies operate their Web sites via the click-through model. In these cases, the Web site garners some or all of its revenue by selling space on their pages to other companies, who advertise on the pages with banner ads—large graphics that promote the company and provide a link to its Web site. Embedded in many banner ads are "cookies," coded identifiers that are shot into the Web surfer's hard drive and which allow the owner of the banner ad to track subsequent movement on the Web for the purposes of building comprehensive profiles of individuals. Cookies record the universal resource locator (URL) addresses that the Web user visits, and profilers infer from these online movements some general characteristics about the customer. For instance, if a cookie records visitations to several Web sites relating to children's clothing and education, the profiler may conclude that the user is a parent; repeated visits to online bookstores and literary sites would lead the profiler to conclude that the user is an avid reader. After compiling such information, the profiler either uses this information to target specific advertisements to the customer or sells the profile to other companies—in this example, to bookstores and children's outlets.

In these cases, individuals are almost entirely unaware that any profiling is occurring, and privacy advocates charge that this practice, even when used benignly, represents a potentially dangerous breach of individual privacy. In the late 1990s, privacy and consumer groups began to organize against these practices. For instance, in 1999 consumers brought a class-action lawsuit against Seattle-based Real Net-works, claiming that the company failed to notify customers who had downloaded its free music-listening software program that it was tracking their listening habits. RealNetworks settled the lawsuit by fixing the software to eliminate its ability to profile users and by issuing an apology.

Advertisers insist that online profiling is a cornerstone of their business, and they put a proconsumer spin on the practice, arguing that profiling ensures that they can target advertisements in such a manner as to most benefit customers by ensuring that they can acquire what they want when they want. In this way, they hold, the consumer society is made even more efficient, since advertising spending goes to its optimal location. By improving the shopping experience, moreover, e-commerce players hold that profiling ensures continued growth in e-commerce to the advantage of all businesses and the economy as a whole.

So, for instance, online retailers can notify select customers of upcoming sales in product areas of particular interest to those customers. Additionally, companies might be more able to sell off older inventory by targeting specific customers with special reduced prices. The logic behind these kinds of arguments holds that the more information in circulation, the better for all involved.

Beyond simply compiling information, online profilers have launched a new industry in the sale of accumulated information to other companies. By virtue of implementing the systems to conduct profiling, the profiler essentially becomes the owner of that information and may choose to profit from it directly or by selling it to interested parties. The individuals profiled, however, have no control over what happens to the information compiled on them. To hedge against a rising backlash toward the practice of online profiling, many companies choose to provide opt-out features, allowing users to prohibit the use of their information after registering for a software download or filling out an online subscription.

According to the Washington, D.C.-based Electronic Privacy Information Center, online profiling is largely invisible to the public. That is, most individual shoppers and Web surfers are unaware of how much and what kind of information about them is being compiled and analyzed. This is one of the primary alarms for privacy advocacy groups; if individuals remain in the dark about online profiling, they are in a poor position to decide for themselves whether engaging in Internet-based shopping and other activities is worth the price they have to pay in lost privacy.

A 1999 report by the Pew Internet and American Life Project found that fully 86 percent of Internet users worried that businesses, governments, or other entities could acquire information about them or their families without their knowledge or permission. These fears, especially prevalent in the United States where the expectation and valuing of privacy run especially high, meant that businesses wishing to continue utilizing this practice had to tread lightly and not give off the impression to customers of any sort of dishonest or underhanded profiling. The same study, however, revealed that only 10 percent of all online users had disabled cookies in their Web browser, while 56 percent of users weren't even aware of the existence of cookies or what they do.

In 2000, the U.S. Federal Trade Commission (FTC) issued a report on online profiling calling for the practice to be informed by five "core fair information practice principles": notice, choice, access, security, and enforcement. In other words:

• Web sites should be bound to disclose their profiling practices.
• Consumers should be given the chance to opt out of the practice or at least have a say in how the information is used.
• Once information is collected, profiled individuals should have access to their profile.
• The profile should be secured from unauthorized viewers.
• Enforcement mechanisms should be in place to ensure that Web sites meet their own requirements regarding their profiling practices.

The most ominous possibilities of online profiling remain a part of privacy advocates' critiques of the practice. Such critics fear that profiling conjures visions of Big Brother forever monitoring individuals' behavior. Relatedly, critics worried that such information in the hands of governments, corporations, or other entities could potentially be used for ill purposes. For instance, critics point out that profiling could be used to identify political beliefs, sexual orientation or tastes, medical information, religious affiliation, or other behaviors. Critics worry that, unless kept in check, such practices could lead to widespread discrimination or otherwise undermine democracy and civil liberties.