Define Bad Guy

One of the big differences between big business lobbies and those representing small businesses is their attitude toward peers who cut corners.

Big businesses can handle the regulatory burden of finding and punishing those who skirt the boundaries of the fraud statutes (without going over). By policing the boundaries they hope to protect their own reputations. Small businesses see the burden, not the benefit, and the idea of getting in trouble without actually breaking the criminal law seems patently unfair.

This split is often created after some mini-scandal sullies the industry’s image but doesn’t cause a peasant revolt. The Doubleclick-Abacus scandal and RealNetworks’ privacy policy, are examples of this. Few people were really hurt, and while some big businesses made some public noise, the issue wasn’t really joined.

That may be about to change, warns Rodney Joffe. He sees small businesses skirting the present privacy law with policies that will create a growing demand for regulation.

“One of the problems with demanding Privacy Policies on every web site is that sooner or later, when every site has one, visitors will stop looking at them,” he writes. “And finally the bad guys have realized it,” he adds, citing the example of eSweeps, a lottery site.

Like Amazon, eSweeps has posted a privacy policy. But take a look at it, Joffe suggests. Article 3 states “eSweeps.com reserves the right to post collected data on eSweeps.com’s web site, or share, rent, sell, or otherwise disclose data it collects to third parties.”

Joffe, a long-time privacy advocate, is aghast. “They spell out in simple words that they are going to capture all the data they can from you, including credit card information, etc., and then they reserve the right to publish it and sell it!!! They have over 5 million suckers who have signed up, and they’re covered by law now.”

The CEO of eSweeps is Steve Hardigree, profiled in a 1998 Network World article titled “A Day in the Life of a Spammer“. eSweeps is housed in the same building in Delray Beach, Florida, as OptIn Inc., an email list broker of which Hardigree is CEO. Hardigree is also quoted as CEO of eSweeps in an Orlando Sun-Sentinel story posted on a competing lottery site, Windough.com, 18 months after the Network World piece.

This doesn’t prove Steve Hardigree is a bad guy, but he’s no Bill Gates.

Hardigree isn’t the only small entrepreneur using loopholes in present law to build a market in the data of greedy users. Joffe also pointed to Netsetter, which identifies itself as a research company but whose FAQ claims its software can improve the performance of your Internet connection. Its privacy statement, Joffe says, is no better than eSweeps’ – the language is just more obscure.

My point today is that Real and Doubleclick are big businesses, while eSweeps and Netsetter are small ones. When challenged, the big businesses backed down. I’m betting the small ones will defend themselves vigorously. My question is where will you stand, once their push comes to the public shove?

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