Reasons for privacy invasion
Text Source:
This is a text from : Location privacy in ubiquitous computing by Alastair R. Beresford.
The reasons for privacy invasion are wide and varied. Governments, while wildly varying in political constitution, all demand information from citizens; examples include earnings, family make-up, religion and qualifications (everything from driving ability to medical training). The stated goal of data gathering is that of collective good for society; in many cases the benefit is clear (for example, the regulation of medical practitioners) but in some cases the societal benefits are less obvious, for example, the record of racial origin.
Commercial organisations are primarily concerned with profit, yet companies are often much more invasive than their governmental counterparts. Traditionally, marketing, advertising or brand loyalty have been suggested as the major motivation, but more recently price discrimination-the act of charging individuals a personalised price based on the amount they are prepared to pay-has been suggested as a strong motivating factor.
Odlyzko provides a good introduction to price discrimination and the Internet. Discriminatory pricing works best in markets with large, fixed, up-front costs and low marginal costs. With the centralisation of services and reduced cost of communication, and transportation, more and more industries fit this model. Price discrimination is not a new phenomenon: it was used extensively throughout the early development of the railways in the US and Britain until a customer backlash introduced extensive regulation. Traditionally its use has been limited by the lack of technology to perform detailed customer profiling.
Commercial organisations are primarily concerned with profit, yet companies are often much more invasive than their governmental counterparts. Traditionally, marketing, advertising or brand loyalty have been suggested as the major motivation, but more recently price discrimination-the act of charging individuals a personalised price based on the amount they are prepared to pay-has been suggested as a strong motivating factor.
Odlyzko provides a good introduction to price discrimination and the Internet. Discriminatory pricing works best in markets with large, fixed, up-front costs and low marginal costs. With the centralisation of services and reduced cost of communication, and transportation, more and more industries fit this model. Price discrimination is not a new phenomenon: it was used extensively throughout the early development of the railways in the US and Britain until a customer backlash introduced extensive regulation. Traditionally its use has been limited by the lack of technology to perform detailed customer profiling.
More recent price discrimination examples include flights, computers and even DVDs. The ability to automate the collection and analysis of consumer profiles (often referred to as data mining or data profiling) has greatly enhanced corporations ability to dynamically and differentially price products. Odlyzko uses economic theory to suggest that price discrimination combined with efficient customer profiling results in a more efficient market and thus without regulation its use will become widespread.
Data mining or profiling (whether for marketing, brand loyalty or price discrimination) will have a stark impact on consumer privacy. Not all users appear to be concerned with data collection and retention policies; provided a majority of users are content with such processing, industry-wide practise may force other less content consumers into participating either through lack of any choice or high discriminatory prices for those wishing to retain privacy.
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