BUSINESS

Preserving individual privacy

New technology has made trafficking in personal data a huge industry

BARBARA WICKENS April 26 1993
BUSINESS

Preserving individual privacy

New technology has made trafficking in personal data a huge industry

BARBARA WICKENS April 26 1993

Preserving individual privacy

BUSINESS

New technology has made trafficking in personal data a huge industry

Until Jan. 18, 1993, checking out licence plates was a $5-million-a-year business for the Ontario ministry of transportation. For a $5 fee, anyone could walk into their regional vehicle licensing bureau, fill in an application form and learn a wide range of details about a vehicle—including the owner’s name and home address. According to ministry spokesman Anne McLaughlin, most people conducted searches for legitimate reasons: they wanted to know the history of a used car they were thinking about buying or they needed to track down a witness to an accident. But some searches clearly resulted in gross violations of privacy. In November, an Ottawa woman, who declined to be named, complained that a man found out where she lived by tracking her licence plates and asked to take her out. McLaughlin said that the ministry “was aware of a few of these situations” and, as a result, stopped providing names and addresses to the general public. Now, she said, the ministry will only provide that personal information for specific purposes, including court proceedings and police investigations.

The collection, compilation and trafficking in personal data has become a huge industry: some privacy experts say that it is worth as much as $300 million a year in Canada. It has grown, in part, because rapidly evolving technologies, including telecommunications and computers, have simply made it easy to do. Said Evan Hendricks, editor of Privacy Times, a Washington-based newsletter that tracks privacy issues worldwide: ‘The paper trail has become the electronic trail.” But as technology has become more pervasive, so has the sense that it is increasingly difficult to ensure that private matters remain private—as Premier Robert Bourassa’s aides discovered during the referendum intercept of cellular calls and the chatty Prince Charles and his lover Camilla Parker-Bowles now know. As a result, organizations ranging from the federal Office of the Privacy Commissioner to the Canadian Standards Association (CSA) and the Quebec government are taking a new look at the issue.

At the heart of the matter is a delicate balancing act: the right of the individual to privacy versus the legitimate needs of government or business to gather information. Privacy advocates express concern, however, that it has

become much too easy for organizations to gather, store, use and manipulate data about an individual. “The average Canadian’s name is being crunched through various computers five to 10 times a day,” said Bruce Phillips, the privacy commissioner of Canada and a strong advocate of restraint on snooping.

A joint study between several federal government departments and four private-sector

organizations indicates that many Canadians share Phillips’s concern. In Privacy Revealed, a survey of 3,000 Canadians released late last month, 60 per cent said that they have less personal privacy than they did a decade ago.

Nevertheless, the trend towards collecting ever greater amounts of data is bound to continue. The advertising and marketing industries are two groups that are increasingly using consumer-profile data. Part of the reason is that companies need better information on targeting the fickle markets for consumer goods. At the same time, there is increasing fragmentation in television. In the age of the TV zapper and the proliferation of cable TV channels, advertisers can no longer be certain that they are reaching their target audience. As a result,

they are turning more often to other alternatives, including data-based direct-mail campaigns. To reduce the cost of mailings, direct marketers attempt to reach customers who have indicated an interest in a given area. S.I.R. Mail Order, for one, a Winnipeg-based firm specializing in hunting, fishing and camping equipment rents its customer lists to others who want to attract rural subscribers.

In December, Quebec became the first jurisdiction in North America to attempt to regulate personal information in the hands of the private sector when Communications Minister Lawrence Cannon introduced Bill 68. Although the federal government and most provinces have privacy acts, they apply only to information in government records. Still, many consumer advocates say that Quebec’s proposed legislation, which should be in force by the end of June, does not go nearly far enough in protecting individual rights. On the other hand, some executives say that the bill places so many restrictions on how companies may share information with third parties that the bill will add greatly to the cost of gathering data. Said Jean-Claude

Chartrand, chairman and chief executive officer of Montreal-based Equifax Canada Inc., the nation’s largest credit bureau: “That will add to the cost of credit, which in the final analysis will cost the consumer.”

Several industry organizations in Canada have attempted on their own to deal with privacy concerns. The Canadian Bankers Association adopted a voluntary privacy code in 1990 that spells out how banks should collect, store and use customer in formation. Since 1990, Canada’s six major chartered banks have implemented the code or devised their own. Still, the Royal Bank of Canada sparked controversy last month when it revealed that it sometimes included client-card numbers along with names, ages and addresses among the information sent to market-research firms that were testing demand for new products. Although a Royal Bank spokesman insisted that the practice was not an invasion of privacy, the bank has since stopped releasing client-card numbers for research purposes.

Another industry group that has passed its own privacy code is the Toronto-based Canadian Direct Marketing Association. Effective next January, members must obtain a customer’s permission before they sell or trade any information about that customer to a third party. Association members must provide customers with an easy mechanism, such as a box to check off on an order form, that allows them to remove their names from marketing lists before those lists are transferred to other marketers. Said association president John Gustavson: “This way, our customers can receive information on the things they want and avoid the stuff they don’t want.”

On another front, the CSA, a Toronto-based nonprofit organization that has traditionally restricted itself to the safety testing and certifying of electrical appliances and other consumer products, is also turning its attention to privacy issues. In December, 1992, the CSA established a committee that will try to establish a standard to recommend to companies across Canada. David McKendry, head of the consumer affairs consulting practice with Price Waterhouse in Ottawa, is chairman of the committee, which also includes members from government, the private sector and consumer groups. He said that privacy is a logical issue for the CSA to tackle. “Safety is changing in the marketplace,” McKendry said. “Privacy is a safety issue in the information age.”

Many privacy advocates say that they welcome the attempts by various sectors to come to terms with privacy issues. At the same time, however, they note that Canadians still need more legal protection. “I’m all in favor of self-regulation,” said David Flaherty, a Canadian professor of law and history,

currently on sabbatical, at the Woodrow Wilson International Centre for Scholars in Washington. “But it doesn’t have the force of law.” Flaherty said that many Canadians are surprised to learn that they do not have a constitutional right to privacy. “The word ‘privacy’ is not in the Charter of Rights and Freedoms,” he said.

For his part, Privacy Commissioner Phillips, a former newspaper and television network reporter, said that he agrees with Flaherty that privacy should be included in the Charter. “It would be a benchmark for the entire country,” he said. Many experts, however, maintain that Canadians have adequate protection. Simon Chester, a lawyer with the Toronto firm McMillan Binch, said that there are better ways to protect individual’s privacy than spelling it out in the Charter. The charter, which applies only to government and not the private sector, is too blunt an instrument, Chester said. “It is much more important to have specific legislation,” he added. Equifax’s Chartrand said that, as a z result, his credit bureau operates its I systems to meet the toughest stanU dards in the country, which, he 5 says, are usually Ontario’s laws. Phillips: protection should be placed in the Charter That means, Chartrand said, that

consumers across Canada enjoy the

same level of protection, even if they live in the two provinces that have no consumer credit laws. Clearly, however, Canadians will continue to be concerned about whether technology has moved ahead faster than the law’s ability to protect their privacy.

BARBARA WICKENS