Transparency as a Competitive Advantage: Think Very Carefully About Communicating Your Data Sharing Initiatives

In the weeks following revelations that the National Security Agency (NSA) has a domestic spying network that taps the electronic and telephone communiqués of nearly every American — a data-gathering exercise that crosses domestic boundaries — consumers have become more vocal about their concerns with corporate complicity in government data snooping.

Mikogo, an online meeting and web conferencing provider, recently sent out a newsletter in response to the many questions it has received from users asking where its servers are based, how it handles user data, and the origins of the company. Mikogo’s response is telling:

[B]ecause we are not a U.S. company, we are not bound by the Patriot Act. Consequently, by no means are we ever obliged to give anybody access to our users’ data.

Mikogo’s user community’s skittishness leads to the question: Are we at the beginning of a consumer backlash that will stymie expected economic growth related to data-sharing? Or are consumers resisting the inevitable: a new era of diminished privacy?

Time will tell.

Recent Harvard graduate Melissa Oppenheim (now working in policy development for Facebook) submitted a thesis in 2012 called The Dark Data Cycle: How the U.S. Government Has Gone Rogue in Trading Personal Data from an Unsuspecting Public, suggesting that a vicious cycle exists between the U.S. government and corporations that need to consume data and citizens that produce that data. This Data Cycle has three ‘nodes,’ according to Oppenheim:

1. The government mandates and collects certain pieces of information from Americans under the premise of using that information for specific purposes (voter registration, for example).
2. This information is later given or sold to private third parties for other purposes, unlimited in scope. Many private companies enhance or augment the government’s data by associating the government’s datasets with externally gathered personal information. As individuals increasingly share large amounts of personal information online, private companies capture this information and use it to enhance government datasets and turn a profit.
3. The information originally collected by the government from individuals is later repurchased or re-acquired in its enhanced version by the government, using taxpayer dollars. The government agency that acquires this information may use the enhanced version for purposes other than that for which the information was initially collected, and the cycle continues again.