As a general rule, large corporations never realise they are in big trouble until it is far too late. The private-equity industry didn’t understand how unpopular it had become until suddenly it couldn’t grab any more takeovers without facing a storm of protests. The big supermarket chains were blind to the fact that they were seen as too powerful until they couldn’t open new stores without provoking riots. What’s the next crisis in the offing? That’s easy: privacy.
Over the last decade, companies have started storing more and more details about our lives, and using ever-more complex computer programmes to exploit this information. The revelation that computing giant Apple’s iPhones automatically track and record the movements of everyone who owns them is just the latest, if most jaw-dropping, example. A backlash is inevitable. If companies are smart, they’ll get on the right side of this argument before it is too late. With their usual arrogance, however, most probably won’t – and they will suffer the consequences.
Take Apple. It may be the third-biggest company in the world, measured by market capitalisation, but its increasingly creepy control-freakery suggests it is heading for a very hard fall (as an aside, you don’t want to be owning the shares when it happens). When it emerged that iPhones and iPads track your movements and store the information away – not even particularly securely – the company didn’t apologise, or even deign to comment.
Soon afterwards, it emerged that Google’s Android system, the main alternative to the Apple software for smartphones, does much the same thing, although it claims the data is collected anonymously. And Google did at least try and explain itself, arguing the data was useful for providing maps and information about local services based on where you are.
But those are just the latest examples. Think about loyalty cards. I’ve noticed that if I don’t shop in a particular supermarket for three or four weeks, I get sent a special offer. No doubt their computers have logged my absence, and are trying to tempt me back. The store cards track just about everything we buy, work out the state of our finances, and so pitch their special offers at just the right moment. Likewise, the internet, phone and satellite broadcasting companies know just about everything we watch. Our email providers track our messages. Facebook knows who our friends are, what are interests are, and can target advertisements accordingly. The banks know all our account details. Employers routinely scan their staff’s emails.
Corporations have, in short, killed any idea of privacy. Does that matter? You could argue that it is all voluntary. No one forces us to buy a smartphone, own a store card, or even have a bank account. Then again, unless you want to go and live like a hermit in the Scottish highlands, it is very hard to avoid giving away vast amounts of data about yourself.
You might argue there is nothing disturbing about the information being collected. There’s some truth in that. Most of the firms storing details of your life don’t want to do anything more sinister than send you a few vouchers offering money off orange juice or a text to your phone alerting you that there is a good pub around the corner. There is nothing Orwellian about that, so why worry?
Firstly, we don’t know what the data might one day be used for. We already know the police access mobile-phone records to find people. Who is to say iPhone data won’t be used by divorce layers to help nail the movements of a straying spouse? Or by firms looking to dismiss an employee? Or by repressive regimes cracking down on dissidents living abroad? Just because the information is being used relatively innocently for the time being, that doesn’t mean this will always be the case.
Next, nobody really gave permission. Imagine the fuss if the government decided to collect data on our daily movements around the country, and store it forever, and did so without even bothering to tell anyone, or explain why it wanted the information. Everyone would be up in arms. In truth, the corporate world’s massive data-collecting spree is a form of theft. The information about who we are, what we like, where we go, and so on, belongs to us as individuals. Companies collecting it are, in effect, stealing from us.
People may seem relaxed about the invasion of their privacy now. Then again, they were relaxed about the asset-stripping of the private-equity industry for a long time. And they weren’t bothered by the expansion of the supermarkets for many years. Then suddenly, a tipping point was reached and it became a big issue. Privacy will be much the same.
Smart companies should ready themselves now, by controlling the amount of information they collect on their customers and being careful about how they exploit it. Unfortunately, many more will arrogantly assume they can just do what they like. And, no doubt, they will be surprised when one day they find they are in a lot of trouble over it. They will, however, have only themselves to blame.