Data collection feed fears for privacy advocates

This week's news that Google, Twitter and other popular Internet companies have taken liberties with customers' data have prompted criticism for privacy advocates and lawmakers, Reuters reports.

The companies have apologized, but this is the latest of several errors these companies have made in pushing privacy boundaries. Despite the discussion of online privacy and data protection laws in Congress, Silicon Valley is in the midst of an arms race of personal data collection that is intensifying.

Only a few U.S. laws prevent these companies and others from collecting a variety of information--from credit card numbers, names and addresses to buying patterns  and web surfing habits-- then selling the data to advertisers and other third parties. For both the buyer and seller of the advertising, the business advantage goes to the participant with the most knowledge. This is what drives companies like Google to learn as much about its users as Facebook does.

Facebook base most of their services on the ability to personalize, which is what requires them to know their users well. Their business models depend on the ability to target a banner advertisement or other marketing pitch to an individual. Millions of times every day, the right to advertise to specific user is auctioned off in a fraction of a second by computers communicating with one another.

Internet companies and their investors argue that data-collection is essential to their businesses and enables them to provide services that would otherwise be impossible. Consumers get more accurate search results, more relevant advertising and more intimate connections with friends and others.

Auren Hoffman, CEO of Rapleaf, a company that that compiles profiles of Internet users, said that he doesn't like that people are tracking his location, but that on the flip side he wants to know what some nearby Italian restaurants his friends have liked.

The equation is a little different in Europe which has a long-standing  data protection laws that limit some practice that are not the standard in the U.S. The European Union is weighing updated rules that would allow any resident to ask companies to delete the information on file about them, while the U.S. only has equivalent rights for those under the age of 13. Privacy advocates in the U.S. say that they do not expect big changes to happen anytime soon.

This post was originally published on Smartplanet.com