Did WSJ go too far in exposing Apple employee home purchasing habits?

The WSJ published an article discussing the cost of houses in the Bay Area. As per the title of the article, "Apple Paychecks—One Reason for High Home Prices", the key culprit they highlight are the significant salaries that the Apple employees are allegedly paid.

The the data for the findings were based on the work done by Zillow completed "at the request of The Wall Street Journal" who "used census data to track down where workers in the census tract that is dominated by Apple’s Cupertino, Calif., headquarters live—primarily neighborhoods in the San Jose and San Francisco metropolitan areas". It's not clear if they relied on their own data to complete this analysis. As per the graph below, Zillow tied the rising house prices to iPhone sales.

To be fair, and abide by full disclosure principles, the article does also blame "[z]oning laws and regulatory red tape are key factors as well". However, would it be the WSJ if it didn't lay such a charge?

Where to begin? The article raises a lot of issues in terms of the role of publicly available data - regardless if it is only the census data, data gathered by aggregators such as Zillow or social media sites.

As I had written a couple of years ago, the article actually is the promise of social media to "return us to the village". In the village privacy was limited because people knew each other and any deeds or misdeeds made by the individual were quickly found out by the community. A good example of how social media accomplishes this was role of public in identifying the rioters involved in the post-Stanley cup "celebrations". If such a riot had happened in the village, the rioters would be have been held accountable in a similar manner.

The Zillow-WSJ effort is really along similar lines: if employees of a company or members of a particular guild were buying up houses and driving up prices in particular area; wouldn't people in the village know?

Furthermore, it actually is village business. We need to understand how we will live with one another how we are going to make the most of living together in this shared space called community, which requires an understanding of how the actions of one group within the community will impact others especially when it relates to a basic need like housing.

That being said, it opens up the issue of big data and its ramifications on privacy.  Although the above rationale translates well into issues relating to communal benefit it doesn't translate well into issues relating to how private entities can handle the information they were given for a specific purposes. This of course refers to the concept of "consent" well-established within privacy parlance.

The authors of  Big Data: A Revolution That Will Transform How We Live, Work, and Think raised this issue in there book. As I had noted in a previous post:

"The authors, however, raise a much more interesting point when discussing privacy in the era of big data. They highlight the conflict between privacy and profiting from big data. They note how the value of big data emerges from the secondary uses of big data. However, privacy policies require the user to consent to a specific use of data at the time they sign up ahead. This would prohibit companies from big data. However, corporations in their drive to maximize profits will ultimately make privacy policies so loose (i.e. to cover secondary uses) that the user essentially has to give up all their privacy in order to use the service. What the authors propose is an accountability framework. Similar to how stock issuing companies are accountable to the security regulators, the idea is that organizations would be accountable to a privacy body of sorts that reviews the use of the big data and ensures that companies are accountable for the negative consequences of the data.

For those of use that have been involved in privacy compliance, such an approach would make it real for companies to deal with the privacy issues in proactive manner. We saw how companies attitudes towards controls over financial reporting shifted from mild interest (or indifference) to active concern with the passage of Sarbanes-Oxley. In contrast, no similar fervour could be found the business landscape when addressing privacy issues. Although the solution is not obvious, the reality is that companies will make their privacy notices meaningless in order to reap the ROI from investments made in big data."

Social Media & Privacy: The Return of the Village

Some of you with connections to the younger folk may have heard of SnapChat. The promise of the application was that it would allow its users to share images that would be deleted within a few seconds of it being transmitted. Another similar app and function is offered by Facebook called Poke. The hope was that, such an app would protect the privacy of the users by maintaining the confidentiality of the messages sent. However, CNET uncovered (based on the blog, BuzzFeed FWD) that it is quite easy to go around the controls:

"an iPhone user simply has to plug the smartphone into a computer, navigate to the phone's internal storage, and find the folders for Snapchat and Poke where the videos are stored locally. The user can then copy the videos from the phone to the computer to sneak a peek at them. In BuzzFeed's testing, this bug applied only to videos; photos didn't appear to show up."

The workaround, if you will, illustrates something that we know that there is always a way around these controls and therefore they offer limited privacy protection at best. The reality is that once something gets online it's out there forever.

I try to make the next generation of accounting students aware of the risks during the Master's course I teach at the University of Waterloo.  During class, I ask them to pull articles on how posting on Facebook can undermine one's career and professional prospects. (here is a blog that compiles social media faux pas that results in one losing one's job). As the then CEO of Sun Microsystems (now owned by Oracle), Scott McNealy stated (back in 1999), "You have zero privacy anyway.Get over it."

Over the summer, I had some time to think about privacy and social media as I was researching the phenomenon. One of the thoughts that struck me was that social media actually represents the "Return of the Village". Being an urbanite myself. I am used to living in the city or the burbs where people "mind their business". However, that's not how life is in the traditional village. In the village, everybody knows everybody and word gets around quickly about people's affairs. There, just as in the online world, if you don't want anyone to know something don't tell anyone about it. Consequently, privacy has always been limited in a village context. However, as Jeff Jarvis touts in his book Public Parts, there are benefits to living life publicly. In other words, by living in the "online village" we get the benefits of a community that was hard to find living in the more individualistic urban setting. A couple examples that illustrate this concept:

• Vancouver Riots: After the Vancouver riots, "Robert Gorcak created a Facebook page titled “Vancouver Riot Pics: Post Your Photos,” within 10 minutes of game end. He said he created the page to gather photos of the perpetrators in the hopes of bringing them to justice." This is exactly what would happen in a village. If someone was creating problems, he or she would be identified and held responsible by the community
• Mommy Bloggers: This concept of the "online village" is also illustrated by mothers who exchange stories and work with each other online in terms of dealing with the joys and challenges of motherhood. One such blogger is Heather Armstrong, who runs dooce.com. In article posted on abcnews.com, it  states: "Bloggers also helped Armstrong through her own postpartum depression. “I didn’t have a village,” she said. “I would get on my laptop and read other women’s stories online. They changed the way I parent. Without their stories, I honestly don’t think I’d be alive today.” That feeling of helping is what keeps many bloggers going. “You can’t say enough how big a reward that is to express yourself and in the process of expressing yourself, dip into a community and get a response, said Connors, who is also Babble’s director of community and social good. “It’s very free, very liberating, to get to say what you want and….immediately get the gratification of a community coming around you.”"

When developing an internal controls strategy around social it is important to keep the human element at the focus of the strategy. As illustrated by SnapChat, technology-centric controls can be easily circumvented. Furthermore, when considering the risks of employees contributing online it is important to remember that it is hard to segment one's professional world in the corporate cubicle with one's personal life. Consequently, governance and controls need to address the personnel rather than relying solely on technological solutions, such as data loss prevention tools. For example, Microsoft relies essentially on its people to police themselves and in order to post things that are in-line with Microsoft's corporate culture. In other words, the techno-centric solutions can supplement governance controls but they don't supplant them. 

In terms of protecting oneself from privacy breaches it requires vigilance. Some totally avoid being a social network for just the reason. That being said such people are in the minority (I poll students annually as to whether they are on Facebook: a handful give it up because it is a waste of time. I've found 1 or 2 people who've given it up for privacy reasons). Other try to mitigate such risks through "social controls". For example, in the Facebook Effect, the author notes how colleges have no cellphone and no camera parties to avoid illegal activities for finding their way online. It may seem like weak control because anyone can sneak a camera into the party. What this misses is really that the control is social in nature: people won't take pictures because they wanted to be invited to the next party!

Ultimately, the real test of social media will be how it is used against people who do not conform to the norm. For example, what would happen if employers discriminate against people who support the Occupy Wall Street movement? If people go along with such discrimination, social media essentially becomes a way to ensure conformity in society. Conversely, if such discrimination is opposed, then it would lead to a more open society as the threat of social sanction (e.g. unable to finding employment) is effectively removed.