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Mary Culnan: A Privacy Guru in the Public Spotlight The Georgetown professor's study on Web-site privacy policies could set the agenda for possible federal regulation Mary Culnan wasn't ready to be a mommy, but the geniuses of marketing didn't know that. After she bought a friend a baby gift in 1986 or 1987, she was bombarded with catalogs from companies who assumed that she must have had a blessed event. What she had instead was an epiphany. "They told me they sold their list," Culnan recalls today. "They didn't tell me they segmented it and told people about [each customer's] purchases. It wasn't fair." The case of that gift -- a nursery wall switchplate -- prompted the Georgetown University information systems professor to become one of the nation's leading academic experts on online privacy. Now, the question of whether the Internet will be subjected to tough new federal rules may turn on a Culnan study due next month. The issue is the collection of personal information on the Web, and whether sites are doing enough to guard the privacy of their visitors. Whether Culnan's research changes many minds in a debate marked by hard positions taken early, her facts will likely form the basis for opinions of every stripe. Culnan's goal is to quantify the extent to which a flurry of industry efforts over the past year to reassure consumers on privacy has really changed things. The Federal Trade Commission, for one, has been skeptical of the Web industry's accomplishments on privacy. Last year, FTC Chairman Robert Pitofsky said the Clinton Administration would reevaluate its stance favoring self-regulation if Web sites failed to develop and post policies. He wants the policies to tell consumers what information the sites gather, what the information is used for, whether the site sells it to third parties, and what rights consumers have to see, challenge, and restrict the use of their information. An FTC study last June concluded that 85% of sites collect personal information but that only about 2% post a comprehensive privacy policy. Recent industry studies have shown rapidly improving numbers. EYEING TOP SITES. Culnan was retained by a coalition of companies after the FTC told the industry it didn't have the resources for a follow-up study. "She obviously understands the privacy issues, but she also understands the real world," said Russ Bodroff, chief operating officer of the Better Business Bureau's online privacy seal program. Starting on Mar. 8, Culnan's team has been surveying 360 of the 7,500 most-visited sites. That differs from the approach of the FTC, which based its study on a wide sample of random sites. The criticism of that methodology is that it places as much weight on the privacy policies of one-doctor medical practices as on those of E-commerce giants. Culnan says that standards for the new study were devised by advisers from both industry and privacy lobbies, and she insists that her role is only that of a referee. "The study will be just data," she vows. "My own views will not be in it." Even so, Culnan's views may influence the debate simply because she's a focal point. The 54-year-old educator places herself between those who believe goverment regulation will protect consumers and those who think the free market can do the job on its own. For instance, she doubts whether government could ever make fines for improperly disclosing information high enough and certain enough to make companies obey. She also questions, however, whether industry-backed programs that rely on kicking privacy violators out of a seal-of-approval program have enough teeth. "It's going to be interesting to see how they work," she says of such rules. THE "SECOND EXCHANGE." In her academic work, Culnan has argued that when consumers and merchants exchange personal information they both benefit. She believes that if consumers part with selected information, they'll get better service -- and that if companies use such information responsibly, the resulting consumer gratitude will translate into sales. "We're not preaching to business that this is the right thing to do," says Sandra Milberg, another Georgetown professor who with Culnan co-authored a chapter in an upcoming privacy book. But Milberg concedes: "We're designing studies to show [that privacy protection boosts sales], because we have no data." For the most part, Culnan thinks consumers rather than government should set the terms of what she calls "the second exchange." This transaction is the swap of detailed information in return for speedier answers, better product recommendations, or steeper discounts. She says consumers usually are smart enough to decide whether marketers are offering a good enough deal to make the exchange of such information worthwhile. "I don't like other people to make choices for me," she says, "and I don't want to make choices for other people." She feels that Web-site operators will have to make consumers' choices clear, however, so people will know what they're agreeing to before they decide what to do. And she says site operators should tell their customers how they're crunching consumer data. In a debate marked by high-church views on both sides, Culnan's ideas part company with those of both the strongest privacy advocates and those of the most avid backers of free-market free-for-alls. Direct Marketing Assn. Vice-President Patricia Faley says the industry is concerned about how regulators might react to Culnan's view that consumers should have at least some access to information gathered on them. That could open the door to security breaches as consumers traipse through companies' databases, she contends. And even though Culnan once did volunteer work for privacy advocacy groups, some of those groups now view her with suspicion. "Follow the money," snipes David Banisar, policy director at the Electronic Privacy Information Center, referring to industry's funding of the Georgetown study. Culnan has the resume to command respect, however, plus an even temperament that usually wins the trust of even people who disagree with her. She served on the Clinton Administration's commission on critical infrastructure protection, assessing the impact of hackers and other threats to the Internet. She is editing her second book, and has been a regular witness before Congress on privacy issues."DMA is kind of the evil empire on privacy, and there's concern that Mary is working for them," says Bob Gellman, a former Hill staffer who is a consultant. "I'm not that concerned about it. This appears to be a well-defined project, and Mary has the authority to do what she wants." In any event, it isn't clear how many minds the facts will change. Senator Conrad Burns (R-Mont.), has already filed a bill that would extend to adults many of the restrictions of last year's law aimed at protecting the online privacy of children. Senate Commerce Committee Chairman John McCain, a spokeswoman says, is still against regulating information exchanges by adults without clear evidence of problems. Culnan says she harbors no illusions about the impact of her report. "They just want the data," she says of her survey's sponsors. "Then the real food fight will begin." A messy metaphor to be sure, but apt as both sides gather more ammo. Tim Mullaney covers electronic commerce for Business Week in New York _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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