8/29/2002 BOULDER, CO
Privacy articles are often a lot like science fiction stories: they both take the latest trends, such as wireless location tracking via cell phones, and attempt to predict or prevent an Orwellian, “Big-Brother”-is-watching future. Often such privacy predictions come true, as in the recent murder case of 5-year-old Samantha Runnion. Police believe suspect Alejandro Avila’s cell phone location tracking system placed him near the scene of the crime. Looking back at the past 12 months, privacy in America has undergone a significant shift.
After the September 11 attacks, Americans willingly traded their individual privacy for the promise of increased security. Trust in government went up and people allowed their public servants permission to peer into the details of their once-private lives. Has it is gone too far? For the ex-Army researcher suspected of playing a role in last year’s anthrax attacks, the answer would probably be yes. In the example of the quaint small town where everyone knows everyone else’s business, government secrecy and individual privacy is minimal.
Such transparency can keep people honest, but even then, information is often aggregated by a few gossipers. Simply put, not everyone needs to know everything about everybody. With access to such information comes the temptation for abuse. When government has the power to keep its activities private but has the ability to peer into the lives of its citizens without concern for the rights of the individual, such control often takes the shape of South American dictatorships and war-torn, warlord-controlled fiefdoms in Africa.
On the other hand, when individuals have the ability to protect the release of their private information from prying government eyes, the temptation to avoid paying taxes and commit fraud and abuse against other individuals can take root. In Russia, a group of men called the oligarchs rule the still-developing economy with a form of crony capitalism that’s beyond the reach of the weakened, post-Communist government. In the U.S., CEOs of companies like Enron and others felt that they too were beyond reach. Even professional baseball players have in the past used their positions of considerable economic power to avoid “invasive” drug testing.
If individual privacy is about controlling access to and the release of personal information, strong individual privacy is only possible when the rights of the individual are held in higher regard than the collective rights of the community. Much of American society is based upon the notion of the “rugged individualist,” where one person exerting the sheer force of will can shape and change the world around him or her. This concept has allowed countless men and women armed with ambition, an idea and an entrepreneurial spirit to build new companies, create medical breakthroughs and offer a better world – complete with microwave ovens, Post-It notes and air conditioning.
Even our roads and cities are based on individualistic constructs. The automobile is the personal transportation device that allows a person to go from one strip shopping center to the next without having to rely on the slow and undesirable “mass” transportation systems. Why are mass transit systems so undesirable to so many Americans who love to drive their gas-guzzling SUVs? Because taking a public bus takes control away from the individual and forces them to rely on the bus or train schedule of the masses. So what is the answer for individual privacy in a post-September 11 America when even the FBI has the power to investigate the phone records of the Senate Committee on Intelligence for possible national security leaks?
Perhaps it’s a balance of power between the branches of government: the FBI keeping a watch on the Legislative Branch while the Department of Justice keeps the FBI’s new Patriot Act powers in check. Perhaps it’s the freedom for writers like me to share thoughts that may be unflattering to the government without fear of ungrounded retribution, and perhaps it’s the interest of readers like you who vote for our elected government representatives who in turn make laws, appoint judges and manage our law enforcement officials. I think the answer lies not in any of the extremes, but in a careful balance between them all.
by Jeff Finkelstein
MLB Drug Testing: A Brilliant Bargaining Chip
BOULDER, CO – Why is random drug testing for steroids and other performance-enhancing substances a part of the NBA, NFL, NCAA and Olympics but not major league baseball? And how have team owners used the issue of drug testing – traditionally a privacy issue – as a brilliant bargaining chip to help avert a strike?
The issue is power.
Major league baseball (MLB) players have traditionally held a lot of collective power, often quite a bit more than their counterparts in other professional sports organizations. So while the MLB organization is a Congressionally sanctioned monopoly, players have had enough bargaining power in the past to keep requirements like random drug testing from becoming part of their employment contracts.
Said freelance sports writer Mike Celizic: “The players are already taking in half of baseball’s total gross of about $3.55 billion. Out of the other half, teams have to pay stadium rents and travel costs, support a half dozen or more minor league teams, maintain scouting departments, pay debt service, buy insurance, and [pay for] all the other costs – of which there is almost no end – [to run] a franchise.”
With a great deal of money and power, major league baseball players like Ken Caminiti and Jose Canseco were able to keep their use of performance-enhancing steroids private. Thus with power came privacy.
Steroids and other performance-enhancing drugs give players that take them an unfair advantage over “clean” players, and without drug testing, a disincentive is created for players not to take drugs. Team owners leveraged the fact that even the idolized star player Mark McGwire admitted to using androstenedione (an over-the-counter muscle-building supplement) during his record-breaking 70-home run season with the St. Louis Cardinals.
By bringing the issue of steroid use to the forefront of baseball fans and government regulators, team owners were able to shift the balance of power away from the players. Players – facing a tarnished image, increased public scrutiny and the threat of federal regulation – finally dropped their opposition to drug testing late last week.
According to team owners’ attorney Rob Manfred, the drug-testing proposal is “very significant. It is the kind of proposal that will put us very easily on the path to a very timely agreement.” Like movie stars and rock musicians, professional baseball players are often in the public spotlight. To many fans, major league baseball players are still the heroes who have the talent to play America’s favorite pastime. Fans watch their every action.
Mundane tasks like going to the grocery store or visiting a movie theater become newsworthy events, especially if a celebrity has a scrape with law enforcement. Because of the scrutiny placed upon them by the public, celebrities often crave privacy and anonymity and use their powerful positions and large sums of money to screen themselves from the watchful eye of the public.
Lord Acton once wrote: “Power tends to corrupt, and absolute power tends to corrupt absolutely.” With an imbalance of power, players were able to make sure that drug testing didn’t occur, but team owners realized that the players’ power was based on public perception and image and used drug testing as an issue that wrested power away from the players.
So for major league baseball players, the slogan “just say no” no longer refers to “no drug testing”. It means that players must now play by the no-drug rules adopted by nearly every other sports organization.
8/1/2002 Boulder, CO
Last week, Yale University accused rival Princeton of seeing the confidential decisions of 11 candidates that applied to both schools. According to reports, undergraduate admissions officers at Princeton purportedly used applicants’ last names, birth dates and social security numbers to gain entry to the system this past April. Although no official reason for the supposed breach was given by Princeton or Yale, observers speculate that Princeton could exploit the inside information to woo students being accepted at both schools with additional solicitations and improved financial aid packages.
Your bank, credit card company, phone company, hospital, health insurer and yes, your university, has your social security number and date of birth in their records. So while Yale felt Princeton “hacked” into its system, it’s really a privacy and permission issue. Information was collected for purposes of evaluating students for college admission but not for additional use. The admissions department, for example, did not have permission to start conducting criminal background checks or examining applicants’ credit reports or medical histories.
Students sent their information to the admissions departments at Yale and Princeton as a requirement for their applications to be processed. Their social security numbers were used to tie their application to their standardized SAT and ACT test scores. Even though the Princeton admissions department had the keys that unlocked the door to the Yale admissions site (students’ social security numbers and dates of birth), they did not have permission to use the information to peer into private areas of an applicant’s life.
Laws in the health care and financial/banking industries help protect consumers from the unauthorized use of information that has been collected for one purpose and then used for another. In the online world, the Federal Trade Commission has imposed stiff penalties on companies that publicly say they will “never ever” sell their customer information, but then turn around and auction the “asset” off to the highest bidder. Toysmart, for example, tried to sell its customer database when it filed for bankruptcy, but was ultimately blocked from selling because doing so would have violated their customer’s privacy. In addition, there are long-standing rules at the IRS that prohibit its employees from browsing needlessly through the tax return records of celebrities.
Prior to the rules, the U.S. president’s tax return was one of the most frequently examined tax returns by curiosity seekers inside the IRS. The IRS implemented a “fingerprinting” technology that digitally stamps each record every time it is accessed, making sure that employees who may have access to records safeguard the privacy of American taxpayers. A similar audit trail ultimately caught the Princeton admissions department red handed. Whenever you visit a Web site and request a page, the server receives the request and sends it back to your computer. In the process, your IP address (a string of four numbers that are your computer’s location information when you’re on the Internet) is recorded and saved in the server’s records of what pages were requested and by what computer.
What the Princeton admissions department didn’t realize was that anyone at Yale was tracking their non-permissioned access to the Yale system. Criminals’ alibis are now corroborated or disproved by credit card transaction information and cell phone location information that records where they were when a crime took place. A couple months ago, I wrote about how a college in Indiana accidentally posted the social security numbers of past students on a public section of their Web site and the ramifications of how this sensitive information can be used by thieves to open up fraudulent bank accounts or run up costly credit card or cell phone bills.
If businesses and organizations continue to use social security numbers as universal identifiers (there is no current federal legislation that discourages this practice), expect such incidents to continue to increase. The irony of the Yale-Princeton admissions debacle is that the Princeton admissions department didn’t realize that their privacy-violating Web browsing activities weren’t exactly private.
7/17/2002 BOULDER, CO
You thought your medical information was private, right? So did a Florida woman who received an unexpected trial pack of once-a-week Prozac in the mail, writes privacy advocate Jeff Finkelstein. “I found it appalling and frightening to receive free samples of a very powerful medication by mail when I didn’t know the package was coming,” said the woman, identified only as S.K. According to attorney Gary Farmer Jr., the privacy issue comes to the forefront because other people could have access to the package and accompanying literature and deduce the kind of illness the recipient has.
Believe it or not, it’s actually easy to purchase lists of people with any one of 60 ailments, such as diabetes, depression or high blood pressure. The Medical Marketing Service has cross-referenced 16 million households with “ailment” information compiled from 250 to 300 million surveys. You can purchase lists based on age, gender, income, education level, prescription information and type of ailment, and send personalized product information to breast cancer survivors, glaucoma patients or people with high cholesterol.
Drug manufacturers spend many years and hundreds of millions of dollars bringing new medications to market, and deserve to use advertising and marketing to help create awareness of their products and get medication into the hands of people that can benefit from treatment. Yet pharmaceutical companies should place the same care in their sales and marketing systems as they do in the research, development and manufacturing of multibillion-dollar medications.
Pharmaceutical companies need to realize that business success relies on an unbroken chain of consumer trust. When a doctor hands you a pill and tells you that it will make you feel better, you have to place trust in your doctor (that she knows what she’s doing), your pharmacist (that she’s dispensing the right medication and correct dosage), and the manufacturer of the medication (that the pills are safe and effective).
The Food and Drug Administration (FDA) regulates products accounting for 25 cents of every dollar Americans spend, and is in charge of making sure that new drugs introduced by pharmaceutical companies don’t cause harmful side effects like the thalidomide birth defects that plagued the late 1950s and early 1960s. While America’s trust in the federal government has increased ever since the events of September 11, there are only so many inspectors that can watch over the companies that sell $1 trillion in products a year.
It was only after many soldiers reported adverse side effects of the anthrax vaccine to Congressional investigators that the FDA investigated the vaccine’s manufacturer, BioPort. After finding “numerous deficiencies,” the facility was shut down in 1998. In October 2000, the FDA found 18 violations of “manufacturing procedures” at the facility, and in October 2001, the FDA was so concerned they prohibited the company from shipping the anthrax vaccine, despite terrorist-related anthrax attacks.
So you’d think that Prozac manufacturer Eli Lilly would understand that trust begins with respecting the users of their medication. In an effort to convert users of Prozac (the patent expired in 2001) to a new weekly version (with many years of profitable patent protection), Eli Lilly, Walgreens and participating doctors mailed S.K and others free samples. Eli Lilly paid the pharmacy an undisclosed amount each time a prescription was filled. The Florida attorney general’s office is currently investigating whether Lilly violated the state’s unfair trade law and will forward the case to the Florida Board of Medicine.
So why did this direct mail campaign break a fundamental chain of trust? It’s because the data was not permissioned. In the U.S., laws often cover sectors of the economy. Your bank and medical records are held to different standards than the information that is gathered and shared every time you make a purchase out of a catalog or at a grocery store. So when Eli Lilly used information that was supposed to be protected by privacy regulation and legislation, the net result was a large lawsuit against all the parties involved.
How could Eli Lilly have done permission marketing correctly? By getting permission directly from the patient as new information becomes available about their condition. Yet Eli Lilly has had problems with doing even that. In July 2001, Lilly sent out an e-mail newsletter to 669 people who signed up to receive just this kind of permission-based, Prozac-related information via e-mail. But instead of using a professional e-mail marketing solution (or simply using the BCC: line), they simply pasted all 669 people’s e-mail addresses in the TO: line. The people who were already depressed and taking Prozac were even more depressed when they learned their identities had been compromised.
In that case, the Federal Trade Commission (FTC) took action, and Eli Lilly agreed to settle the FTC charges regarding the unauthorized disclosure of sensitive personal information collected from consumers through its Prozac.com Web site. In the most recent direct mail case, S.K. is currently suing her doctors, the Walgreen Company pharmacy chain and drug manufacturer Eli Lilly & Company for invading her privacy and other alleged violations of Florida law.
Wake up, Big Pharma. Applying the non-permissioned direct marketing techniques used by soap companies to get consumers to try new brands simply isn’t appropriate for a medication like Prozac. Marketing a medication to consumers requires the same care and attention that is used to research, test and manufacture the drug. We consumers deserve nothing less.
Boulder, CO: 06/19/02
Skipping TV Commercials Equals Stealing? Advertising Execs Think So.
Do you have the right to skip over TV commercials, in the privacy of your own home? According to TV execs, technology that allows you to skip ads amounts to stealing. Am I stealing from the TV networks when I get up during a commercial break to get more pretzels to dunk in my jar of peanut butter?
As a courtesy to all of us who wander into the kitchen between the action-packed segments of our favorite shows, advertisers usually increase the volume so that we won’t miss out on their messages during our food-gathering journeys. New digital video recorders allow you to easily record your favorite shows regardless of time of day or VCR programming skills. (How many of you have a piece of tape over the flashing 12:00 clock on your VCR because you’ve given up trying to even set the clock?) These devices use inexpensive computer hard drives instead of analog videotapes, but to save storage space, the software can detect that telltale increase in volume and skip over the commercials.
It’s also easier than ever to record, for example, all instances of Star Trek during the next week. And when I want to watch four hours of back-to-back episodes, I don’t have to wait for the prescribed, mass-broadcast time. Like surfing around the Internet in search of information, a digital video recorder puts me in control. Once the information is digitally recorded – it’s easy for me to zap a copy of a favorite episode to a friend via a high speed Internet connection. TV executives could embrace this new way of viewing television programming. But rather than figure out a way to leverage this opportunity into a business advantage – the old-school, mass-broadcast establishment lashed out and attacked. TV executives are visibly threatened by this personalized, pre-recorded television viewing experience – and have fought hard to ban the devices from the United States.
Such digital recording devices threaten their bread and butter – the beloved 30-second TV commercial. What else but a Superbowl ad can command $86,000 per second? The courts have ruled that it’s okay for me to record a few episodes of Crime Scene Investigation (CSI) onto a videotape, and send the tape via snail mail to my long-lost relative in a different part of the world where they can’t watch the show. If I sit in front of the VCR and hit ‘pause’ at the beginning of a commercial break and press ‘start’ when the show begins again, it’s still permissible. So why is it suddenly not okay to use technology to skip commercials and my DSL connection to send the same program digitally? Because it’s digital, I’m a thief? This sounds a lot like a conspiracy with the post office – the organization that is already worried about becoming obsolete due to email and online bill paying?
The 30-second TV commercial won’t go away anytime soon. But the days of annoying the entire football-watching population of the world with an irrelevant, $2.6 million message on Superbowl Sunday are slowly giving way to targeted, permission-based marketing. Perhaps the network television execs should spend their time embracing a different model instead of trying to ban new technologies. One such model is the advertising-sponsored email newsletter – where you, the reader, find stories like this one compelling enough to read that you actually sign up to receive an email message, five days a week. With an advertising-sponsored email newsletter, advertisements are embedded between paragraphs, or stuck out in the right margin. They don’t require you to stop reading, mid-sentence, for a commercial break. And if an ad is more interesting than the article, then you can meander and find out more.
Advertisers who think that the reader of this newsletter may be just the audience they want to reach – can get their message across in a very cost-effective and timely way. (Hint to prospective advertisers: you can probably have your message placed in the right column for a bit less than $2.6 million a pop). Paid content providers like cable and satellite providers claim that people who use digital recording devices to zap a digitally-recorded program between devices over the Internet are stealing from their protected content. Viewed through the lens of a different business model, forwarding a digitally-recorded television program to a friend isn’t a “theft of service” but a way that like-minded viewers can share interesting shows. Advertisers will benefit because their messages are actually displayed in greater numbers each time the episode is shared.
In the information age, power comes from sharing information with others, not hoarding it behind private walls. But until television advertising shifts from its current model of 30-second commercial breaks, take comfort that when you answer the telephone in between segments of your favorite show, it’s the telemarketer on the other end of the line who is “stealing” commercial time from the network execs.