This is the first time that voters in a state have had the chance to toughen privacy protections set in the federal Gramm-Leach-Bliley financial modernization law, which allows financial services firms to freely share information without consumer consent.

Of the approximately 115,000 votes cast in yesterday's referendum, nearly 74% voted to require consumer consent before data is shared. The state elections board offered vote results online.

"This is the beginning of a consumer backlash against the sharing of information," said Avivah Litan, an analyst at Gartner Inc. in Stamford, Conn.

Litan said a "good business strategy is to proactively ask your customers, 'Do you want to keep your information private, or are we allowed to share with other organizations?'" The value in asking that question is customer retention, Litan said.

Privacy advocates say the vote reaffirms opinion polls showing that customers want stronger privacy protections. "It's no longer speculation -- people want opt-in," said Chris Hoofnagle, legislative counsel at the Electronic Privacy Information Center.

The vote comes at the same time Congress is considering legislation by U.S. Sen. Ernest "Fritz" Hollings (D-S.C.) that would preempt the ability of states to do what North Dakotan voters did yesterday.

"It's becoming clearer that preemption of state law is an attempt to prevent strong privacy protections," said Hoofnagle.

Dennis Behrman, a privacy analyst at Meridien Research Inc. in Newton, Mass., said the vote "shouldn't be anything that disturbs their true revenue potential. This is just another step in the trend toward restricting customer data to third parties."

Litan said firms sell data without customer identification to marketing companies. But, she said, these firms find it relatively easy through data-mining techniques to identify that data. "It's kind of like this unspoken dirty secret going around," Litan said.

PRIVACY   Recent Headlines FTC vows to keep closer tabs on privacy breaches U.S.-Europe Rifts May Spill Into IT Report finds businesses, consumers slip on privacy issues Feds eyeing smart-card use as security tool   Additional Coverage View our Privacy special coverage page Computerworld news, feature and opinion articles about privacy issues.

Source: Computerworld

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