A leading privacy researcher is urging companies to say no to government requests for data, arguing that it's good for business.
"Or rather, saying yes can be really bad for business," said Chris Soghoian, an Indiana University PhD candidate and security and privacy researcher.
Speaking on Monday at a Law Seminars International event in Seattle, Soghoian offered companies tips for handling law enforcement requests for data.
Consumers do care about their privacy and their reaction to news about companies that too willingly help the government access their data -- or resist such requests -- proves it, he said.
For instance, in 2005 it was revealed that a few years earlier the National Security Agency had illegally asked telecom providers to install wiretap equipment in their facilities. Qwest said no. "When the news came out, there was widespread praise for that company and the strong position they took, whereas AT&T and the others were criticized," he said.
In 2004 airline JetBlue voluntarily provided customer data to the Department of Defense. The action led to a lawsuit that was ultimately thrown out, "but in the meantime their name was dragged through the mud," he said.
In addition to bad publicity, such incidents aren't cheap. "Not only do government requests lead to loss of reputation but when you get sued by civil liberties groups and your customers, the government won't pick up the tab," he noted.
In another instance, the Department of Justice asked search engines to reveal information about search terms. Most of the big search engines complied but Google declined, not on privacy grounds but citing proprietary information, he said. "If you ever have the fortune to discuss privacy with a Google privacy person barely two minutes will go by before they tell you about the time they said no to the DOJ. They receive thousands of requests a year that they say yes to, but this one instance they've been able to trumpet," he said.
A lawyer who spoke at the conference on Monday agrees that resisting data requests can be good for business. There is increasing scrutiny from consumer groups about privacy issues and companies may be able to maintain competitive differentiation if they are careful about law enforcement requests and if they are open about their policies, said Daniel H. Royalty, a lawyer at K&L Gates in Seattle. "It may be that increasing transparency in this space can lead to differentiation."
With a bit of forethought, companies can avoid getting into situations that could lead to bad publicity. "Providers have a lot of flexibility in what they do and the way they design their networks and respond to government requests. If you think about this ahead of time, you can spare yourself a bit of heartache," Soghoian said.
One way is to simply not store the data. "If you don't log it, there's nothing for them to come and get," he said. He cited a case where prosecutors went after Indymedia.org after the organization didn't comply with a subpoena asking for information about visitors to the site. "They fought it and the prosecutors eventually dropped the case but it was moot because they didn't keep any logs. There was nothing for them to deliver," he said.
Companies that charge users a set fee for service, such as an ISP that charges a monthly fee rather than one based on data used, don't need to keep logs of individual activity, he said. "If you bill $30 every month, the only thing you need to log is if the credit card transaction went through," he said.
Companies that store data for users can encrypt it, providing the key only to the user so that the company is unable to provide that data to law enforcement, he said. SpiderOak is an online backup service that does that.
Soghoian urged companies to charge the government for turning over data as a way to reduce superfluous requests. The law allows companies to charge the government a reasonable cost for data retrieval.
"The problem with free is our brains get hotwired when we see the magic number zero. The government asks for more than they need and more often because it's free," he said.
Yahoo and Google charge the government for such requests while Facebook, MySpace and Microsoft don't, he said. Soghoian has been making requests under the Freedom of Information Act to find records of what the companies charge.
Companies should donate the money they receive from such requests to charity. "Don't keep the money, it looks bad. No one wants to be in the position of selling information to the government," he said.
It's a uniform policy across the industry for companies not to charge for requests related to child exploitation cases, he said.
Companies that do decide to charge for such requests should be open about it. Cox Communications, for instance, has had its pricing information on its Web site for the last ten years. "So it's not controversial," he said.
When company policies about such charges are leaked, those companies often face a backlash from customers, he said.