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Monday, December 10, 2007 

Vol. 3 No. 27

“I Spy”…A Follow-Up as Recent as Today’s Headlines…

Joseph White’s “Eyes on the Road” Column in the Wall Street Journal this Week Provided a Timely Report on “Big Brother”

So last week we went from simple fleet telematics, to the new movie “Look,” to the new Facebook software Beacon, all in the name of privacy, or what doesn’t pass for it these days. This week Joe White’s “Eyes on the Road” automotive column in the Wall Street Journal provided yet another example of automotive surveillance, aptly entitled, “Here’s Looking at You, Kid.” It was so interrelated that I had to add an update blog comment on it.

It seems that there is now a new device that many insurance companies are offering, which monitors how a car is being driven. Just as with the fleet telematic devices outlined in the last blog entry, these systems use global positioning systems (GPS) to gather and transmit information about a vehicle’s location and speed, and go one step further to offer detailed driving patterns, (breaking,) and even video record the drivers and passengers. While offered as a way to keep tabs on newly licensed drivers, that is, so parents can watch their teens driving, which I guess has some merits one would think, these devices certainly aren’t limited to that function, and word is some insurance companies may even offer discounts for usage, although that’s not been adopted now by most and even any formal roll out is controversial, for privacy reasons.

You see, the economic issues relating to privacy are very real. If one of these “back seat driver” camera and monitor things is installed, controlled, or available to insurance companies, the very real worry is that insurance companies can and will begin to deny accident claims where they can, where there is evidence, through these devices, to identify negligent or gross negligent driving which lead to the accident. As Joe White aptly observes in his article, when he quotes Roger Parker, the Assistant Vice President of Consumer Driven Innovation for Allstate Corp., “Parents may want to know what their teens are up to in the car, he says, but they probably don’t want the insurance company to know or to have the power to use information to penalize them by, for instance, denying a claim based on video-recorded stupidity.”

Nevertheless, Mr. Parker says that Allstate plans to offer several different products to consumers as well as commercial accounts within a year, and, Joe White transcripts, “As insurers develop solutions to the privacy issue and the cost of hardware goes down, Mr. Parker expects on board vehicle monitoring will get big fast...We think it could be huge,” he says.

An in-car camera installed near the rear-view mirror to record unsafe "events" when a teenager drives.

Well, that may be true, and I enjoy those gecko and cavemen commercials as much as the next guy, (and just was enlightened to find out that it’s actually Talia Shire, Mrs. Rocky, that plays the analyst in cavemen commercials), but if anyone really believes that the insurance industry will push these devices on folks for the good of humanity and not as a method to save a buck and deny a claim, or that the Facebook folks introduced Beacon as a device to help their members, well, let’s just say those are probably the same people that believe in talking lizards…

And Developments on the Facebook “Beacon” Front (a ‘beacon’ is a warning, right?)

Apparently lots of others feel the same way as I do about Facebook’s Beacon, by the way, as last Wednesday it was reported that the advertising platform has, in the words of the Wall Street Journal, “prompted a user backlash so severe it has sent advertisers running.” This major controversy comes “as Facebook struggles with the huge valuation a handful of new investors have placed on the firm.” That valuation tops $15B, not too shabby considering its revenues are expected to total $150M and come mostly from Microsoft, its primary investor for a few hundred million. It seems that old Facebook went from introducing Beacon as an automatic service, then when users “recoiled” it made it into an opt-in participation. But even that was a bit deceptive, as it was learned that the Beacon spying still functions and Facebook still receives all of the users’ purchase information, even from “opt-out” users. “That has raised privacy concerns severe enough to prompt partners like Travelocity and retailer Overstock to withdraw their support. Even advertising clients fear the system is too intrusive”…now that says something about Facebook doesn’t it, when they pursue something so invasive that even the advertisers that benefit run for cover from it? When user privacy is so highly disregarded by something as “hot” with young ones as Facebook…maybe we should all be afraid… Frankly, I feel much better to know there was such backlash.

And So…

So, while intuitively when I first read the “Letter to the Editor” from Automotive Fleet Magazine that started this whole topic I was sort of skeptical of their being any privacy issue in fleet use of telematics, I now find myself skeptical in a reverse sort of way. I think maybe there are serious privacy issues afoot, perhaps not today in the way telematic information is used, but coming possibly down the road in the very near future…

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