Privacy for Sale

Welcome to the brave new world of encryption apps, real-time marketing, and using your face to shop.

Are you ready to turn your face into a customer loyalty card? That's essentially the premise behind a new service that Red Pepper Lab, a marketing agency based in Nashville, Tennessee, is developing. Called Facedeals, the ?service is "an automated check-in system using passive facial recognition to notify you of in-store deals that are customized just for you." First, participating retailers install stylish surveillance cameras outside their front doors. Then, these cameras authenticate you by scanning your mug as you enter the premises and comparing it to verified photos of you from your Facebook profile. Once the system successfully IDs you, it draws on information from your Like history to deliver personalized deals from the store you're in to your smartphone.

While the terrifyingly soothing pod-person narrator in Red Pepper's promo video does his best to create a mood of resistance-is-futile compliance, the thin line between consumer paradise and totalitarian nightmare isn't just a 10 percent discount on a new sweater that algorithmically correlates with your digital thumbs-up for Ruby Sparks. At least not yet. Facedeals will only try to authenticate you if you've opted in for the service.

Still, if Facedeals mostly just streamlines check-ins while letting you extract value from the dossier you're already willingly amassing on yourself at Facebook, its biometric, real-world deployment adds a visceral dimension to the ongoing discourse about the way Big Data is transforming our lives. It may be opt-in only for now, and opt-in vaporware at that, but it certainly seems like one step closer to that oppressively transparent future when, whether we've opted in or not, every billboard, cash register, point-of-sale display, hang tag, and shelf talker functions like God crossed with a T-Mobile mall kiosk salesman: all-knowing, all-seeing, and determined to make us a deal. How closely are we really willing to be watched? How much time are we prepared to spend keeping abreast of 45,000 word privacy policies and toggling profile preferences?

Around the same time Red Pepper was unveiling Facedeals, a service called App.Net was making news too. Billed as a "real-time social feed without the ads," App.Net is a lot like Twitter circa 2006—if Twitter circa 2006 had been charging $50 to $100 a year for access.

Back then, of course, the only way to get users to pay $50 a year for Web content was to give them hardcore financial data or a beach house filled with lots of 18-year-old models and very few shower curtains. In 2012, however, App.Net convinced more than 12,000 people to contribute $803,000 in less than a month to fund the service's development.

At App.Net, the goal is to create a platform where the temptation to undermine the needs of users and developers in favor of serving advertisers better will never occur; advertisers are banned from this Eden. While privacy doesn't really seem to be a big part of the pitch, it's a natural byproduct of this approach. At most websites these days, job one is monetizing personal data by making it more useful to advertisers, data aggregators, and the like. At App.Net, pleasing developers and users will come first, at least in theory.

So does this mean at last, in 2012, a market for privacy is finally developing? Two years ago, on the world's first-ever Data Privacy Day, CNET's Declan McCullagh pointed to an Atlantic Monthly article from 2001 that documented the "surging" privacy industry of that era. One company had developed "disappearing" email. American Express had a plan to generate "a random, unique card number for each online purchase." Zero-Knowledge, a start-up that raised $75 million in venture capital, was pitching an annual $49.95 service it called Freedom 2.0. "An impenetrable online cloaking device" according to the Atlantic, it utilized "the strongest encryption available" and allowed users to create "as many as five untraceable pseudonymous digital identities."

Six months after the Atlantic article appeared, Zero-Knowledge dumped Freedom due to almost non-existent sales. (McCullagh reports that it generated just $400,000 from Freedom that year.) Selling privacy to Internet users in 2001 was like trying to sell bacon cheeseburgers to vegans. Indeed, as it turned out, the masses were much more interested in sharing photos of their lunches with strangers than they were in cryptography. And, as Napster and others were proving beyond all doubt in that era, the price point that really resonated with Internet users wasn't $49.95. It was "free."

Thus begat the "attention economy" and the idea that we'd "pay" for the services we used and the media we consumed by tolerating and maybe even occasionally clicking on ads. This sort of thing wasn't new, of course—except on the Web the "attention economy" quickly evolved into the "personal data economy." Radio stations and TV networks had been letting us pay them with attention for decades, but they'd never been able to compile 1,400-page dossiers on our viewing habits or tell third-party marketers exactly how many minutes we spend watching yoga instruction shows each month.

Living publicly online, promiscuously over-sharing our lives, has great benefits, of course: At any given moment now, we know where the nearest pizza place is and what 473 other pizza lovers think of it. Power like that comes at a cost though. In her 2012 book, I Know Who You Are and I Saw What You Did, Illinois Institute of Technology law professor Lori Andrews, details numerous cautionary tales: The school teacher who got fired for posting a vacation photo that showed her drinking a beer. The Fitbit users who posted details about their sexual activity without realizing they were making such information public. The businessman who had his credit limit lowered because other customers who'd shopped where he'd recently shopped hadn't paid their bills on time.

With every tale like that, with every new news story about the hundreds of companies that now track our online behavior, the realities of the personal data economy grow clearer. And yet it's one thing to be confronted by them on your trusted tablet or smartphone—oh, look, that L.L. Bean ad is following me around the Web again—and another when random billboard at bus stations start bringing up Google searches in 2002. "Hey, buddy, if you're still looking for Valtrax, that store on the corner's got it for half off!"

Of course, at this point, it's already too late to really turn back. Twitter has made having electronic conservations with people in private—i.e., what we used to call email—seem paranoid and conspiratorial. Amazon doesn't ?just keep track of the books we buy now—thanks to Kindle, it knows exactly what parts of them we underline.

And yet as old-fashioned anonymity and privacy grow all but impossible to attain, their value becomes increasingly apparent. Four million people have downloaded Ghostery, a browser extension that helps users block web trackers on the sites they visit. Another 750,000 have downloaded Disconnect and Collusion, which offer similar functionality. Perhaps we'll even begin to see social networks where posts only last for a certain amount of time before they're permanently deleted; start-ups in the vein of iPrivacy.com, which aimed to facilitate private online buying via fictitious identities, coded postal addresses, and disposable credit card numbers; and most importantly, services of all kinds whose business model is based on charging customers rather than selling them.

At the very least, expect the fetish value of privacy to flourish. Next month, for example, encryption pioneer Phil Zimmermann is introducing Silent Circle, an app that will offer encrypted email, texts, and calls on mobile phones, for $20 a month. So while we may never again know what it's like to walk through a mall without being faceprinted, analyzed, aggregated, and marketed to in real-time, we will at least have the power to engage in retro moments of vintage discretion.