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By Mathew J. Schwartz

Want to address ongoing concerns about the buying, selling and consolidation of people's personal information without their knowledge or consent? Then allow consumers to directly control when--or even if--their information gets bought and sold.

That was the bold suggestion delivered by Doc Searls, a fellow at the Center for Information Technology & Society (CITS) at the University of California, Santa Barbara,

earlier this year in an issue of the Harvard Business Review devoted to "audacious ideas."

"When customers own and control their own data, demand will drive supply more efficiently than supply currently drives demand," he wrote. "In this 'intention economy,' customers will determine the products they want, the prices they pay and the terms of engagement they require. Those terms will include both permissions and restrictions regarding the use of their data."

The Searls proposal comes at a time when questions and concerns over so-called online behavioral tracking and other data collection techniques practiced by advertisers and marketers have been mounting. In response, the Obama administration in February  proposed a Consumer Privacy Bill of Rights, which it's pressing Congress to adopt. That privacy framework would notably allow consumers to opt out of some types of online tracking.

The Searls proposal, however, would go much further, triggering a complete rethink of online consumer privacy. But would such a market-driven approach, controlled by customers, work? Not everyone thinks so. "Doc Searls describes a perfectly rational marketplace in which we all happily use the commodity of our own data as currency," says Bob Garfield, editor at large for Advertising Age and co-host of NPR's On the Media. "But he forgot the two principal human emotions that drive every marketplace in the economic world: greed and fear." Notably, consumers might be shocked at how little their data buys them, while continuing to distrust what advertisers are doing with their data.

Still, Joshua Kauffman, a personal data consultant and researcher at Harvard Graduate School of Design who studies how data collection practices can be turned to positive societal ends, says any Searls-type approach would require intermediaries, which could allay some of these misgivings or misconceptions.

"Imagine having to continually monitor how one's personal data is used. It would be prohibitive to participation," he says.

Instead, such monitoring could be outsourced to a trusted third party, which could then require anyone who uses that data to comply with a privacy and information security code of conduct, and that's what Kauffman thinks will occur.

"Look for a new crop of data brokers and guardians to emerge that will step into this wide chasm between people and the services that extract their data," he says. "The value proposition is clear: Allow me to ramp up what I disclose while ensuring my safety and integrity as I become ever more public."

But it remains to be seen whether websites that rely on advertising revenue via such mechanisms as CPM (cost per mille, or every 1,000 impressions) could survive in an intention economy or even an era of do not track.

"The easier the opt-out-especially a one-click 'do not track'--the more likely that a vast majority of Internet users will do so. That would destroy what is already a fragile business model for online advertising," says Garfield. "CPMs are vanishingly low and too meager to support the vast majority of publishers. The only means of raising those CPMs is targeting, and widespread opt-out would render targeting impossible."

In other words, an intention economy might kill funding for many of today's popular Internet properties. "Nobody has educated consumers about the basic facts: Personal information is A) not as personal as you think, B) a commodity. It is how you pay your toll on the information superhighway," he says. "Everyone thinks the Internet is free. It isn't. That Google--especially--hasn't spent years explaining the quid pro quo is deplorable."

Indeed, numerous studies find that consumers regularly say that while they're happy to consume online content, when it comes to magazines, newspapers and especially blogs, they don't want to pay for it.

Kauffman, however, highlights the many potential privacy upsides offered by the Searls approach. Notably, personal data today is too often conceptualized as private property--owned by businesses--that doesn't get freely shared. But increasing data collection transparency, promoting sharing--for the greater good--and giving consumers a say in how their data gets used could together trigger an age in which "privacy will no longer be dominated by matters of disclosure," says Kauffman. "It will instead be a proactive domain, devoted to the issue at the heart of our digital economy: The terms of exchange between personal data and what we get in return for it."

Mathew Schwartz reports on information security and privacy issues for InformationWeek and The Privacy Advisor.

Read more by Mathew Schwartz:
Facing the privacy implications of IPv6
How 9/11 changed privacy
Privacy software to protect patient records

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