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The rise of social networking services like Facebook has created significant digital privacy concerns. And new geolocation-based services like Foursquare are creating a whole host of new concerns.

But privacy doesn't necessarily have to be a touchy subject for today's most prominent social networks. Prominent venture capitalist Fred Wilson, whose firm has invested in Twitter and Foursquare, thinks that there may actually be an opportunity for companies to charge their users for additional privacy safeguards.

At the Geoloco conference in San Francisco this week, Wilson was quoted as stating: 

When you reveal your specific location, it's very important that you have control over that... There are business opportunities in privacy-related services. The challenge is to get someone [whether business or consumer] to pay $2-$10 dollars per month to ensure that sort of premium privacy.

Obviously, users should be aware of the privacy policies of the sites they join, and the risks of sharing too much information. When they don't, they can only blame themselves when their privacy is 'violated'. That said, some of the sites that have come under fire over privacy concerns, namely Facebook, have changed their privacy policies dramatically over time in an opt-out, not opt-in fashion.

Wilson is certainly correct when he notes that "The challenge for large social networks is to undo permissions that they've already given. Meanwhile, a startup is at an advantage as they can build something from scratch that allows the user to predefine the data terms for sharing." But the only way for large social networks to undo the permissions they've already given is to ask the users they've made promises to if they can change the terms of their relationship. Anything less than that is 'bait and switch'.

From this perspective, I'm not so sure that there's a legitimate proposition for 'premium privacy' offerings. Companies should think carefully about how the information their users provide is going to be shared, and they should be committed to adhering to the spirit of the privacy policies they initially create -- whatever those policies are. Period.

This is not only the right thing to do ethically; long-term it's the smart thing to do from a business standpoint. That's because the information users provide is often a company's most valuable asset. Changing how it's used without explicit permission is a violation of trust that is likely to damage a company's reputation over the long haul. Telling users they can pay you to not use the information they share under terms different from the ones you set when they provided it is, in my opinion, more likely to be perceived as extortion than it is to be perceived as a legitimate business model.

At the end of the day, the mainstreaming of online social networking has created significant new business opportunities and made it possible for businesses to know their users in ways rarely possible before. The thorny privacy issues that have arisen because of this are issues that most businesses didn't have to grapple with before. But social networking hasn't changed the concept of trust.

Trust is established when actions and words are consistent with each other; when promises are kept. If I tell you that your secrets are safe with me, the trust in our relationship depends on me keeping your secrets. In the world of social networking, any business that believes that users should pay you to act in a trustworthy manner probably won't be in business five or ten years from now. Put simply, in business as in life, you shouldn't make promises you're not prepared to keep. There's not a (paid) app for that.

Photo credit: rpongsaj via Flickr.

Patricio Robles

Published 22 July, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2391 more posts from this author

Comments (6)

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Kate

Companies are legally obliged to protect the privacy of their customers/users - anyone trying to force a situation where online privacy is only available for those who can afford it are going to find themselves swiftly and resoundingly kicked in the unmentionables by a lot of people.

about 6 years ago

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Joe Collins

Hello,

I need to pay for what when I join a web site. Privacy, perhaps Fred has missed some of the currents laws around companies and what they required to do around personal information. Tell Freddie boy to look at the most recent requirements in Mass.

about 6 years ago

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Riccoboni

Charge me for privacy?

This is a ridiculous idea. Perhaps Fred Wilson would also like to charge me for breathing?

I wouldn't even entertain using a social media application that did this. Surely this is a prime example of someone who is completely out of touch?

about 6 years ago

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Clerkendweller

The "premium privacy" is the minimum, not the maximum, at least in Europe.

"$2-$10" is the cost of doing business using personal data.

about 6 years ago

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John

I just read yesterday someone say that companies are 'paying' for our private data by giving us free services (as opposed to charging us for those services).

I think the only way this is acceptable is for there to be a negotiation. I don't think it is wrong to start a conversation about it.

In the final analysis, I think people should put a price on their privacy. Celebrities and the rich will naturally place a higher value on it than will someone without enough food to eat every day. However, there must be a clear agreement and not simply assuming that a company like Facebook or TrulyMail or Twitter can reveal information on what you post, to whom you connect, and when (and from where) you login.

Privacy must be the starting point. Revealing information must compensate the user. We do not assume companies can reveal all they know about a user, we assume the opposite.

about 6 years ago

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Bangalow Accommodation

There are definite trust issues to consider, I am not convinced that 4Square is not a security risk in disclosing my location. Even if I do pay a premium to keep my location secure - how about hackers that mine their way into a location database?

about 6 years ago

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