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For Whose Eyes Only?
The RealNetworks fiasco illustrates why it's tough to trust the Net

November 4, 1999
Web posted at 9:30 a.m. Hong Kong time, 9:30 p.m. EDT

OOPS! It's been red faces this week for the U.S. Internet-streaming company RealNetworks. It breached its own online privacy policy, and that means a big potential problem for e-commerce.

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The Seattle-based RealNetworks, best known for its RealPlayer and RealJukebox software that sits on the C-drives of about 14 million computers, was discovered by an American electronic security expert to be deriving information about consumers gathered via special data-mining code installed in its Real Jukebox software.

That's a big no-no in free-wheeling Net culture, where any hint of Big Brother is anathema to the anything-goes ethos of the Net. It was enough for RealNetworks chairman Rob Glaser to issue an apology. "We made a mistake in not being clear enough to our users about what kinds of data was being generated and transmitted by the use of RealJukebox," the statement says. "We respect and value the privacy of our users and we deeply apologize for doing anything which suggests otherwise."

Fair enough. RealNetworks seems to have learned its lesson; the company is providing a downloadable software patch to placate outraged RealJukebox users. But the issue does speak to wider concerns about privacy on the Net. Recent surveys in the U.S., Australia and Britain all showed that a majority of surfers were worried enough about Net privacy to have second thoughts about fully realizing the advantages and convenience of e-commerce.

And the Asian Net industry didn't get off to a great start when it was discovered earlier this year that a Singaporean service provider was snooping around user desktops while its subscribers were online--to check for viruses, it claimed.

Security and privacy over the Net is an issue at the very heart of the transformation of the economy online. Consider the depth of information we provide when we register for a site or make an online purchase of, say, software from a company like RealNetworks. It goes way beyond mere names, addresses and credit card numbers, often extending to the type of job we do and how much we get paid for doing it, how many kids we may or may not have and sometimes what type of car we drive. That's valuable information for corporations and marketeers, enabling them to tailor products and information to our presumed tastes--and income bracket.

But the problem at RealNetworks goes further still. The RealJukebox player allows for downloading and playing music from the Net, commonly via the MP3 compression format. If, for example, I was downloading the latest from the Red Hot Chili Peppers, it might follow that I'd be interested in buying a pair of Vans and maybe a Mambo T-shirt. If I were 35 and over, that would suggest I'm grimly clinging onto my lost youth. Perhaps I'd be interested in buying something to combat hair loss, or a Harley.

And on it goes. Of course, we're all different but to marketeers we're often very much the same. Already I receive about 10 junk e-mails a week and I have absolutely no idea how these companies got my address.

The information about us that we subconsciously provide via our Web usage habits tells a lot about us. Already there are columns written around the world that ask readers to guess who a particular person might be by the type of websites stored in a bookmarks list. When we blithely tap our personal details into cyberspace, we are giving away so much about our personalities, in our eager embrace of what is hot and new. Until e-commerce companies can absolutely assure us that what we do online is for our mutual eyes only, we consumers will always be reluctant to fully trust them.

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