Lessons in Smart Grid Privacy from Facebook and Google

The smart grid may indeed become an opportunity that’s bigger than the Internet, but like the Internet, it won’t be without its stumbling blocks. Fortunately for us, some web pioneers are unwittingly providing utilities and energy management firms with an education on privacy, one of the thornier issues affecting online businesses today.

By now, we’re pretty well versed in the convoluted saga of Facebook’s privacy mechanisms. What started as relatively simple privacy controls evolved into a complex set of options and hooks to third-party sites, apps and marketers that bewildered novice and experienced users alike. In response to the backlash — and undoubtedly alarmed by the press and netroots fundraising that Diaspora attracted — Facebook unveiled a new set of simplified privacy options this week.

Google’s been taken to task on privacy as well. Soon after the Buzz privacy uproar subsided, it was discovered that the company’s fleet of Street View vehicles was capturing much more than curbside snapshots in Germany. In addition to the SSIDs of Wi-Fi hotspots, they also happened to soak up some “payload” data – basically the information traded between laptops and wireless access points. Uh, oh. As expected, Google and the German government are currently embroiled in a very public spat.

It’s clear from these episodes that privacy matters. And while no one is forced to sign up for Facebook or use any of Google’s services, many home owners soon will get smart meters and start transmitting their energy usage data with little choice in the matter. Here’s how utilities and home energy management firms can avoid some of the privacy gaffes that have tripped up these companies.

Put Users in Charge, Simply

If the Facebook fiasco taught us anything is that users want to be behind the wheel when it comes to sharing the data they generate. And by “behind the wheel” I mean providing controls more like those in a car, not a space shuttle cockpit. In other words, adjusting privacy settings needs to be simple. Any home energy monitoring and management provider that’s planning to leverage user data for marketing partnerships or social networking functionality — or any other third-party transfer of information — should be prepared to cater to this desire.

Ask, Don’t Assume (or Worse Take)

Google found out the hard way that assuming users want features enabled by default (Buzz) or that people don’t mind some wireless traffic sniffing — let’s just call it what it is — is a sure way to invite user revolt. Want to expand your data-gathering capabilities to include smart appliances? Ask in a straightforward manner and provide user-friendly opt-in/out mechanisms, don’t make mention of it thousands of words deep into an all-encompassing EULA. Otherwise, prepare for some damage control, or worse, an uncomfortable stint under the government’s microscope.

If your home energy management outfit has plans underway that affect customer data, clue your users in before they’re fully implemented. It’s a way to gauge their reaction, address feedback and perhaps incorporate unexpectedly helpful suggestions. Otherwise, you’re facing the prospect of spending time, energy and money to set things right again.

Sure, home energy platforms are rudimentary now, but within the next decade, smart appliances, EVs and other energy-aware gadgets will all help to paint an extremely detailed picture of a household’s power consumption habits. That’s why it’s important to get a handle on how consumers expect their private data to be handled. Failing to do so now could result in costly remediation measures — or worse, serious safety and security breaches — later.

Question of the week

Can smart grid firms and utilities get privacy right?
Relevant analyst in home energy management
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4 Comments Subscribers to comment
  1. I think your main point is entirely accurate, but I just have a few quibbles:

    1) Mark Zuckerberg has actually said he invested in and respects Diaspora, for what that’s worth. http://www.wired.com/epicenter/2010/05/zuckerberg-interview/all/1

    2) The Google Street View stuff was not about a service people had opted into at all — unless you count leaving their Wi-Fi unprotected.

    3) I’m not sure the Facebook fiasco taught us users want to be behind the wheel. I think it taught us that *the right thing to do* is to put users behind the wheel. After all, Facebook stated there was no statistical effect on people using the service less, saying they liked it less, or leaving it due to privacy complaints. Not to say the privacy complaints were wrong, but the idea of user demand is less certain.

    I would say that there are two core risks here. One, you need to lock up user data extremely tight. Don’t mess it up. And two, you need to anticipate how users expect their data to be shared, and at every turn consider what is the right thing to do for them in the long run, on a holistic level. Colin is right that government intervention is what happens when you get either of those two things wrong.

    1. Thanks. Nice catch on Zuckerberg/Diaspora!

  2. Colin Gibbs Friday, May 28, 2010

    Great post, Pedro. I’m constantly amazed at how many users don’t know they can control privacy settings on the Internet. Smart grid companies and utilities will have to be upfront and transparent (maybe even to the point of being over the top) or risk federal intervention.

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