Huge Changes Are Coming for Your Privacy

Opinion is divided about the popular comedy show South Park. Generally, people either love it or hate it. There is no middle ground.

I happen to be in the former category. I know it’s risqué, but like me, the show has no tribal allegiances, and it often cuts right to the heart of an issue in a way no one else can. I like to think of it as America’s court jester — allowed to do and say things forbidden to everyone else.

Occasionally, South Park even provides me with inspiration.

For example, last week I watched an episode in which one of the kids, Kyle Broflovski, is abducted by representatives of Apple, who plan to use him for experiments. When he protests, they point out that he agreed to this when he activated his iPhone.

That was all I needed to get started on today’s Sovereign Investor Daily

Thanks, Europe!

On Friday, the European Union’s General Data Protection Regulation (GDPR) goes into effect. Even if you’re not a European, that has important implications for you.

The GDPR implements strict privacy preventions and data protections for users of companies like Facebook and Google. These protections go far beyond those here in the land of the free.

Because it’s not practical for technology companies to have one data privacy setup for Americans and another for Europeans, U.S.-based tech companies have been updating their terms of service to comply with the GDPR. That’s why lately you have been getting privacy policy updates from every app, service or operating system you’ve ever used.

They typically follow a standard formula. First, the company tells you what data about you it collects. Second, it tells you why it wants that data, and with whom it might be shared — third-party advertisers, for example. Finally, the policy tells you your options to exercise control over this information.

One of the requirements of the GDPR is that privacy policies be written in easy-to-understand language. Even so, the new policies are on average 25% to 50% longer than the old ones. That’s because thanks to the new European rules, companies must be much clearer about what’s going to happen to your data.

It turns out that they do an awful lot of stuff with our data — more than they had been telling us. So, the chances are that like Kyle Broflovski, you’re not going to read through those — you’re just going to click on “I agree” and get on with your life.

Fortunately, thanks to the European Union’s rules, the new policies are much easier to understand. Some of them even include paragraph-by-paragraph summaries.

Take a Shortcut

We can expect to see expert analyses of these new policies in the coming months. There’s a whole cottage industry of tech journalists who specialize in translating this stuff, like ancient priests who spoke the special language of the gods.

In the meantime, one way to find out what’s in the new policies is to search them by keyword. Here are those I consider most important:

  • “Third parties.” Does the company share your data with outside developers and marketers? Does it acquire information about you from third parties and combine it with their own to create a profile of you?
  • “Retain” or “store.” How long does the company keep your data?
  • “Personalization” and “opt out.” What options do you have? Can you opt out of certain data collection practices?
  • “Delete.” Can you see a copy of your data? Can you ask that it be deleted permanently?

I suspect that if there are major variations between the U.S. and European versions of these policies, it will involve the last point. The European Union now recognizes “the right to be forgotten.” If a citizen wants their data to be deleted from a company’s records, they must do it.

That won’t happen in the U.S. without a fight. The entire basis of the modern digital economy is ownership of data about us. Data is capital. Giving us the right to delete that data dilutes that ownership … something the big U.S. tech companies will resist bitterly.

Europe Gets It — When Will We?

I’m a firm believer in “verum comoediarum” — that there is truth in comedy. Although Kyle Broflovski’s failure to read Apple’s privacy policy produced absurd consequences, the point is entirely valid.

In a recent Bauman Letter Weekly, I argued that there was no plausible alternative to government regulation of the privacy and data protection policies of technology companies. It is a classic case of market failure, and there is no free-market solution.

I certainly didn’t expect the current U.S. political system to address this issue, however. It’s too dysfunctional to do anything that sensible.

The Europeans just have. I encourage you to have a look at these new privacy policies and see what’s possible when government actually pays attention to the wishes of ordinary people.

Who knows? Someday that may happen to us.

Kind regards,

Ted Bauman

Editor, The Bauman Letter

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