Online Privacy: The Opt-Out Revolution Is Almost Here

What if two-thirds of the people on the Web were invisible, secretly visiting websites and searching for products and services while leaving Internet giants like Google and Facebook in the dark about what they were doing?

With no information on those people's activities, there could be no targeted advertising for them and much of the multi-billion-dollar ad Web market would collapse, forcing big changes in the business models of today's biggest and most powerful Internet companies.

While such a scenario won't come to pass overnight, a new study by market researcher Ovum indicates that millions of people could start "vanishing" from the Web within a few years, causing major disruptions to the Internet economy. The reason so many people may go data dark? Privacy concerns.

The Future Is Here

Signs exist today that the procession of media stories showing Internet companies compromising user privacy in favor of advertisers are having an impact on more and more people's psyche. Recent examples of the kinds of stories that over time erode trust include Facebook acknowledging to USA Today that it keeps a running log of the Web pages each of its 1 billion monthly active users visited over the previous 90 days.

Other examples include a half-dozen federal class-action suits filed against Google and Viacom, accusing the companies of collecting data on children visiting sites such as Nick.com and NickJr.com and then sharing the information. And Canadian and Dutch authorities reporting that WhatsApp, an instant-messaging smartphone application ranked as one of the world's top five best-selling apps, violates international privacy laws by forcing users to provide access to their address books. 

The regularity of such bad behavior over the last several years has taken its toll on the reputation of the tech industry. In a survey of Internet users in 11 countries, including the United States, Ovum found that only 14% believed Internet businesses were honest about their use of people's personal data. Worse for the future of online advertising, 68% would choose to block all tracking, if that option was easily available.

While Web browsers and some Internet companies, including Facebook and Google, provide tools for limiting the sharing of data, they are not easy enough for most people to use- and they are not marketed in a way to maximize use, Ovum analyst Mark Little says. As a result, many people are open to alternatives, and entrepreneurs are moving in.

Examples include Personal Inc.Respect Network, Allow and Abine. This segment of the tech industry is growing with a message that goes beyond just blocking companies from online tracking. They also market personal data vaults and reputation management that searches and deletes data on the Web.

These tools are not widely used today, but in time, as privacy concerns continue to grow and these products get easier to use, consumers will likely start taking control of their personal data. "It's not just about blocking because you are concerned about your data and how much people know about you," Little said. "People are also blocking because they are feeling like companies are getting rich on them. They're feeling exploited."

People's Changing Attitudes

An indication of changing attitudes toward guarding personal information can be seen in the ballooning popularity of Snapchat, which lets users send pictures and videos that self-destruct in 10 seconds. As of last weekend, the app was the third most popular photo and video app in the U.S., according to analytics company App Annie. Snapchat claims that 50 million "snaps" are sent every day.

Snapchat is popular mostly with teenagers and young adults, who often use the service to send naughty pictures. However, there is also a growing unease among young people about having a permanent social record on Facebook or Google+, Bloomberg Businessweek reported this week. It makes sense that this age would be most sensitive to having personal information on the Web, since they are under constant surveillance by people who can have major impact on their lives, such as teachers, college admissions officers and parents.

The desire for impermanence and control of data is also growing among older Web users. A 2010 survey by researchers at the University of California at Berkeley found that roughly nine in 10 people aged 18-to-24 years and 45-to-54 supported a proposed law that would require websites and advertising companies to delete all stored data about a person on request.

Zuckerberg Was Wrong

In 2010, Mark Zuckerberg, co-founder and chief executive of Facebook, said he believed people's attitudes toward sharing personal data had become much more open. "People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people," he said in an onstage interview with TechCrunch founder Michael Arrington. "That social norm is just something that has evolved over time."

Zuckerberg was wrong.

As people become more aware of how Internet companies are using their personal data and how it affects their lives, they will start sharing less and demand more control. When that happens, a lot of Internet companies will have to dramatically change their relationship with users or make do with a lot less data to sell to advertisers.

Image courtesy of ShutterStock.