Lee & White

Do you want to tell a seller that you want to pay more?

Picture this, you’re in your favourite shop and you spot this dress... you want it!

You look at the price tag, is this a good price for this dress, is it an item that will be marked down in the next sales, do they have something similar in your other favourite shops, would your friends think you look gorgeous in this dress?

And then you decide, buy now, buy later, leave it.

Moving to the digital world: You browse on your favourite shop's eCommerce site and you spot this dress... you want it!

You look at the ‘price tag’, is this a good price for this dress, etc, etc?

Now know that the price of this item can be changed at the flick of a switch, based on supply and demand, or even calculated on the fly.

A few factors can be taken into account for this calculation:

• You came to see this dress for the 5th time in just as many days... you really want it, perhaps a small downwards nudge on the price would convince you
• You really ‘like’ this dress (on Facebook) – perhaps you want to pay just a little bit more
• You’re the right gender, age, build and style
• You’re married/engaged/befriended to someone with those properties and their birthday is coming up/tomorrow/today/yesterday...
• Your ‘friends’ really ‘like’ this dress, some of your ‘friends’ came back several times to look at it, and perhaps some even purchased it. – perhaps you don’t mind paying a bit more
• You looked at similar – more pricy – items at other stores, perhaps already adding it to your basket, without checking them out

From the point of view of the seller, how much can they ask for this dress? The answer? As much as they can get (from you), or in other words, as much as you would be willing to pay.

In French, the expression ‘A la tête du client’ is used, the best English translation being a price based on the customer’s appearances. In tech/marketing it is called ‘Behavioural Pricing’.

Behavioural pricing consists of calculating the asking price on the fly based on your personal data. This can include any of the following personal data, some of which are sensitive data and not allowed to be used for this purpose:

• Your age, gender, build, style, address, job, job level, medical history, tastes and dislikes
• Your browsing and purchase history
• Your travel history and plans
• Your friends and the above properties thereof

Farfetched? Possibly. Feasible? Certainly. Applied? Who knows?

In any case, the lesson to be learnt here is to not spread your personal data around unless absolutely necessary and justified, for the purpose only for which you are giving it, and only as long as they need it and you want them to have it.

Organisations know an awful lot about you and are starting to deduce and predict your every move, and you are giving them the means to do so, willingly, knowingly.

Getting to know you, getting to know all about you... sounds familiar, but unfortunately, it has nothing to do with Rodgers and Hammerstein's musical The King and I, nor is there an ounce of good, wholesome fondness to that phrase.

Rather, the phrase is cloaked with an ulterior motive - Money, Money, Money (and this is not with reference to ABBA's song).

What's wrong with that? Everyone is entitled to pursue that ultimate goal, and surely everyone does - or at least tries to make more money.

True. Perhaps it is safe to say that every business is set up for the purpose of making money, and more money if possible. The question in any business case for an expense is whether there will be a profit to gain - apart from ensuring the customers' happiness and satisfaction, of course.

Alright, enough about the musical influences, and down to more serious business.

Businesses are trying to get to know you. They want to get to know you better. The better they know you, the better they can get more out of you. To do just that, they need your personal information - from your name to how you spend your leisure time, every bit counts. This desire to obtain personal information is not new of course. But how far is that desire corresponding with the individual's best interest? The privacy right?

By researching and analysing an individual's browsing habits on its e-commerce site, coupled with his/her personal information already obtained, an online retailer is able to advertise products/services which are most relevant to that individual.

It is also the case for those companies/retailers which seek to match the type of products/services/brands to the individual customer's taste. Shops with their own payment cards to facilitate quicker payments at the till (to obtain a card, just fill in your personal information in the given form) analyse the information obtained at every purchase (of the type and quantity of things bought...) to send catalogues relevant to the individual customer/household. If toys/stationery items are the most frequent products purchased, the customer finds a catalogue filled with the latest promotions on toys/stationery items in his/her mailbox.

To an extent, it does seem quite harmless as the individual gets what he is interested in and it does save his time and effort in looking for the 'right' or 'most suitable' product/service/brand. And better yet, businesses carrying out these forms of advertising are actually saving cost. No more unwanted, wasted printing materials. No more spending a fortune on advertising products which a particular individual will never take a second glance at.

A very recent report in the New York Times showed that companies can even make predictions about their customers.

Companies can learn your secrets. 

A statistician from Target, a large retailer from the US, divulged that two colleagues from Target's marketing department popped the odd question, "If we want to figure out if a customer is pregnant, even if she didn't want us to know, can you do that?"

Timing is essential in this case. As most new parents are almost immediately bombarded with offers and advertisements on baby products from the moment the birth records are made public, the key is to get this group before any other retailer knows that a baby is on the way. By being able to identify these mothers-to-be as early as their second trimester (the time when most of these women are changing their lives and buying pre-natal vitamins, maternity clothing and baby stuff) the chances of keeping them for years to come are great. These women are then likely to buy diapers from Target, pass by the baby food aisle and grab a box or two, and on the way to the till, add a few more items to the cart. Once the customers get comfortable with the offered products, they will keep coming back - and for more.

The questions for the businesses are:

• Did you tell the individuals clearly that you were doing/are doing/will do this?
• Did you give them a chance to opt out?
• Did you ensure that the individuals can always exercise their rights under the data protection law any time?
• Are you ensuring the security of their personal information both organisationally and technically?
• Can you ensure that if there is a transfer/sharing of their personal information to third parties, that these third parties will ensure an adequate level of protection of their personal information too?

Answer all these with a YES, and you're likely to be a trusted organisation and you understand the business case for privacy. Privacy is profitable. Personal information is an asset. You protect that asset and you will gain trust, the customers that go with it and the profit that comes from doing business with them.

The questions for the individual are:

• Did you ask for any of this?
• Did you ask for your shopping behaviour to be scrutinised? checked? spied on?
• Are you aware of all that they know about you?
• Do you mind that they can build your profile almost spot on?
  For example, Spying On You Mart knows that Mr.Joe Customer who lives at 123 No Privacy Lane and shops at Spying On You Mart, has an estimated salary of $$$. He has at least one son and one daughter (judging from purchases of boys and girls toys) of the ages between 5-8 years of age (judging from the age group of the toys purchased) and potentially has a wife/female partner who is a size 38 (EU) (again judging from the several pieces of female clothing purchased) and they like barbecuing in the summer and eat Activia yoghurts.
• And with this information that they have about you, do they share it with third parties?
• And if they do, what are those third parties going to do with it?
• Will they protect that information from getting into the wrong hands?
• Did you opt in without realising?
• Can you ever stop them if you wanted/needed to?

Answer all these with a YES, and you've consented with full knowledge and with full trust in that organisation. If you can truly exercise your rights as a data subject, and know that that organisation is protecting and will continue to protect your personal information,  then the protection of your personal information is upheld and the duty of that organisation to you is fulfilled.

But in all cases, think very carefully, read the fine print, and do not give your personal information out unless you know what you're in for, your rights and how to get out. Otherwise, it's Hush Little Baby, Don't Say A Word.

"Privacy law is not allowing us to do this", "We're not allowed to do that". But what can proper personal data management, protection and handling actually do for you... Create business!

On our many encounters we regularly have lively discussions with professionals of all backgrounds and all levels, not surprisingly quite often on our favourite subject, personal data protection and management.

Most feedback we receive however, is related to the repressive perception of data protection law, and how it does not align with the commercial goals and roadmap of the organisation, more likely to limit rather than to offer opportunities.

What we try to explain in such cases, is that the law on the one hand forbids and regulates, but on the other hand enables and guides.

The law forbids that you do anything illegal with the data and use it in a way that can harm the individual identified by the data. It regulates the way that the individual can keep control over his property, i.e. his personal data, and what purposes this data can be used for.

On the other hand, the law creates the framework that allows you to handle personal data and guides both yourself and the data subjects on how to interact in an official and transparent way. You stay in full control but if you mess up, the law is there to enable the individual data subject to exercise his rights.

The basis of the law is the relationship between you and the data subject.

• It needs to be a live relationship.
• Both parties need to be in control.
• New relationships with other parties only with permission and knowledge of the data subject.
• The relationship needs to be transparent.
• Once the relationship ends, the data is no longer of any use and should not be used anymore.

The benefits are many:
As a company, you have many individuals with whom you regularly interact and who support you fully. You do not waste time on stale or dead relationships and do not waste resources on it. Your investment in personal data yields the maximum return. You send out communications to people who want to hear from you and will hear what you have to say.

As an individual, you know which companies you are working with and what they are doing with your information. Once you decide to move on, you know your personal data is not retained and can never be abused.

The downsides of not following this guidance:
As a company, your databases, cupboards and backup tapes are clogged down with stale information of people whom you once worked with but might never work with again. The information of 'live' relationships is hidden and lost in the noise of 'stale' data.

As an individual, your data is lingering forever and you have no control over what will happen with it. Will it end up in the company's archive forever, or in a hacker's database, or somewhere on a hard disk on eBay?

In our personal data workshops, we help every department within organisations maximize the full potential of handling personal data, exploring new potential and advising on ways of using the personal data, within the limits and spirit of the several international data protection legislations. The combination of the detailed knowledge and experience of our team in all related disciplines (data protection law, CRM, marketing, online presence, social networking) together with the knowledge, experience and market savvy of your team, creates novel and powerful new applications with many quick wins and long term benefits.

More information on our Personal Data Workshops and other services can be found here.

It is looking good for Data Protection in Belgium and the EU as Ms. Viviane Reding, Vice-President of the European Commission and EU Commissioner for Justice, Fundamental Rights and Citizenship, announced groundbreaking changes to EU Data Laws to be introduced in a Bill to the EU Parliament this week.

Speaking at the “Digital, Life, Design” conference in Munich on January 22^nd, 2012, she confirmed that personal data is indeed an asset, a  message which has already begun passing around since the UK Information Commissioner commissioned a report on privacy by design to help articulate the business case for proactive protection of privacy in 2008 and which we believe and preach with conviction. “Personal Data is the currency of today’s digital market, and like any currency, it needs stability and trust. Only if consumers can ‘trust’ that their data is well protected, will they continue to entrust businesses and authorities with it, buy online, and accept new services.”, she stated. And the amount of data, including Personal Data, is growing by a whopping 40% a year worldwide.

Given the fact that 72% of European Citizens said in a recent poll that they are concerned about how their personal data is used by companies, and given that businesses are concerned too, how can they keep control over data which races around the globe in a virtual cloud?

“Trust has to prevail”, states Ms. Reding. Rightly so. If the population is to give the current growth continued support, they need to have a good understanding of the issues and be able to trust that their data is not being abused. They entrust the EU with the task to draw up the rules and follow up on their correct implementation and execution. Trust is the key to any relationship - and how much more in the business world?

We have a unified currency in the EU, but Data Protection law is fragmented into 27 different, and sometimes conflicting, regulations. Whilst some member states are top of the class, others have watered the 1995 EU Directive down so much that it is no more than a sign on the wall showing how bad things are. A lot of burden has been added, sometimes in the form or red tape and lengthy cumbersome administrative procedures. As such, it has all been a futile exercise as it missed its economic goal.

Ms. Reding states “Privacy concerns are one of the most frequent reasons why people don’t buy goods and services online.”. She is adamant about the way forward: “This needs to be changed.”

Two legislative texts will be proposed:

“First, a Regulation to enhance opportunities for companies that want to do business in the EU's internal market, while ensuring a high level of data protection for individuals.

Second, a Directive to ensure a smoother exchange of information between Member States' police and judicial authorities in the fight against serious crime while at the same time protecting people’s fundamental right to data protection.”

The first point, legal certainty, will be achieved by one Data Protection Law in the form of a directly applicable Regulation which will apply to all Member States in the European Union, and to all organisations offering their goods and services to consumers in the EU – even if their servers are based outside the EU.

This new Regulation will unleash the potential of the Digital Single Market, and will save businesses around 2.3 billion Euros per year, removing barriers to market entry, which were especially affecting our clients, the small and medium-sized enterprises. It will simplify the regulatory environment and drastically cut red tape. Current notification requirements are replaced by a duty for companies to be responsible and accountable for the protection of Personal Data in their business field. Each company will have to appoint a Data Protection Officer.

There will be one law, applicable to all member states, and companies will only have to deal with a single Data Protection Authority linked to the country of its main establishment.

All Data Protection Authorities will have the same adequate tools and powers to enforce the EU Law.

They will:

• Deal with complaints
• Carry out investigations
• Take binding decisions
• Impose effective and dissuasive sanctions.

The rules for international data transfers will be strengthened and simplified - a necessary step in a world where data travels freely around the world and major companies have made it their specialty to circumvent the more ‘difficult’ countries by operating in or via countries with weaker Data Protection legislation.

Trust from the individuals will be earned through a few key principles, boiling down to one point: Transparency.

• Informed
  • People need to be informed in simple, clear, and unambiguous language.
• Consent
  • People need to freely give their specific and informed consent.
• Control
  • People need to have control over their own data at all time. Aside from the control we know already, it will also include portability, the possibility to take one’s data and easily move it from one provider to another, and the right, not the option, to be forgotten.
• Alert
  • Individuals need to be swiftly informed, within 24 hours, when any of their personal data is lost or stolen.
  • Companies suffering such a breach need to notify their Data Protection Authority without undue delay, i.e. ‘within 24 hours’.

Ms. Reding concludes:

"We will get a strong, consistent and future-proof framework for data protection, applied consistently across all Member States and across all European Union policies. We will make our data protection legislation fit for the digital age so it encourages innovation and development of new technologies and services.

We will adjust the rules to the reality of multinational businesses. And will adjust the rules to the reality of people's lives. Europeans live, work, shop and travel freely in the EU, so their data must travel freely as well: Freely and safely. The reform will become a golden opportunity for business: complying with the EU’s laws on data protection will lead to a competitive advantage. European data protection rules will become a trademark people recognise and trust worldwide. I would welcome if everyone here put these new rules to life."

Well said. Data Protection without a doubt enables businesses to make more and better business, leading to a competitive advantage over competitors, having a solid and healthy relationship with loyal customers. Any organisation would pay good money for this.

You can read the full text of Ms. Reding's speech here

It will take some time to bring the new law into practice, but organisations should be aware and prepared, making the necessary changes sooner rather than later.

If you need to assess your current status with relation to the new Data Protection Law or need advice on implementing or improving compliance with current or the next legislation, review our services and contact us.

Is this a typo? No, it isn't, the outlook for data protection is bleak, and no immediate improvement is to be expected.

First of all, the team at Lee & White would like to wish you a Happy New Year.

Happy because you chose to come here on your own accord and happy that we did not spam you with - probably sincere but spam wishes all the same and which are likely to be loaded with the inevitable commercial 'opportunities'.

As the new year has just started, we are hopeful that protection of personal data and control over use of your own personal data will improve significantly.

But looking back, what happened in 2011?

• A year of major privacy incidents that made it harder - but still normal to many- to ignore the importance of such incidents.
• The rise of moguls that devour personal data and any other data they can 'find', who make it difficult for you to control who is (ab)using your data, and even make you want and think it is normal to share your most personal of data with the world, but mainly the moguls themselves.
• Personal data collection devices with functions such as recording, tracking, spying, eavesdropping, ... commonly known as smartphones.
• ...

2012 will be the year of

• Street View becoming even more commonplace, exposing your most private locations.
• Spies recording your every move and thought using their personal data collection device.
• Full commercial exploitation of our most personal data of all... our face.
• Automatic identification and tracking through techniques such NFC, RFID, Bluetooth, GSM, Wifi, face and car registration recognition.
• Economic crisis... if privacy does not obviously have a positive business case (despite the fact that it actually does), then it gets deferred or cancelled.
• Basically, no place to hide or control who processes your personal data.
• ...

Technology is moving very fast, lawgivers are trying to keep up, priorities are economic and profit rules.

Well, I'm sure privacy will be top of the agenda in 2013.