'It's Just Surveillance' in Global e-Commerce

"The rights of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated."

The Fourth Amendment

The other day a student told me that he had set up a successful business on eBay only to see it crash down. PayPal froze his account without warning so he could neither get his money out to pay his suppliers nor accept customers' money. After more than six months, PayPal removed the block without any clarification. Besides the business going bust and related costs, he lost two terms at school. Now he has to fight in court to get some compensation, but all he can realistically expect is interest on the money that was blocked.

My theory is that there must be automated controls at PayPal in cooperation with surveillance agencies that flag potential suspected money-launderers or terrorists, who then have to be investigated thoroughly. This could explain why PayPal, a subsidiary of U.S.-based eBay, cannot or will not say why his account was blocked for so long. (The student is an Indian Muslim who grew up in Britain and has relatives in Pakistan — do I hear "aha"? — so he may have attracted greater scrutiny before he could be cleared.)

Global Surveillance

Global surveillance is intended to prevent terror acts on U.S. interests that are also global. Security agencies cannot manually detect every possibility so they rely on automation: programs flag possibilities and then someone manually checks these possibilities out. Recruitment ads for U.S.-based secret services appear often now in the Economist sold worldwide. This may suggest more global recruitment and therefore more global surveillance and more cooperation sought from U.S.-based information services or e-commerce companies.

Global surveillance is helped by three things:

1. the near-monopoly of a few information services and e-commerce companies like AOL, eBay, Google, PayPal, and Yahoo,
   
   
2. the fact that these companies are based in the United States, and
   
   
3. the Patriot Act and the Information Authorization Act allowing the government more accessible to all kinds of information.

Yahoo and AOL have already shared their global search data with the U.S. government, and Google was recently forced to do the same. There are third-party cookie companies that collect data on what Web sites you visit. The Intelligence Authorization Act allows the U.S. government to intercept financial information (Battelle 2005: p. 296) so it is quite conceivable that global e-commerce companies based in the United States not only share their data with government agencies but also cooperate by putting in automated controls. The Acts are so wide in scope that even CFO Magazine is worried that the government can use the recent Patriot Act amendments "to wiretap phone conversations and bug boardrooms and offices if there's probable cause that antitrust violations are being committed" (Leone 2006).

A Future for Futures

Robinson's (2005) futuristic novel, "Fifty Degrees Below," presents a scenario where surveillance of U.S. citizens is done via futures markets run by automated agents monitoring e-mails, phone calls, credit card transactions, etc. Every recorded incident or uncovered association can raise the "price" of an individual on different dimensions, with threshold price levels kicking off greater levels of scrutiny.

A futures market was indeed proposed by the White House as a way to obtain information on events such as terrorist acts, but it is on hold (see the article by Spann and Skiera 2003 on virtual stock markets). But computer programs, or "agents" or "bots," could gather information about individuals from credit card companies, e-commerce sites, search engines, phone companies, public libraries' lending departments, etc. and run a futures market as well.

Of course, there will be Type II errors but that is not a problem: the cost of such errors is primarily borne only by the person under surveillance with a little political cost if this person is not a U.S. citizen or resides outside the United States. (But some, like conservative author Francis Fukuyama, now argue that the Iraq invasion was based on a Type II error, which has harmed not only Iraqis but also the standing of the United States worldwide).

Robinson's rather verbose novel also raises the question of people simply accepting surveillance. Indeed, the title of this article is taken from the words uttered by one of the characters. As for me, I love globalization and e-commerce. I think we will get used to surveillance and accept Type II errors at least when they happen to other people who are "not like us."

It took more than six months for the student to get his account unblocked and he lost his business anyway. But at least he was not shot to death like the white Brazilian Catholic worker, mistaken to be a middle-Eastern "Islamic" terrorist. Stuff happens. But I must stop now. There is a knock on the door. Who could it be this late at night?

References

1. Battelle, John, 2005, "The Search: How Google and Its Rivals Rewrote the Rules of the Business and Transformed Our Culture," Nicholas Brealy Publishing, Boston.
   
   
2. Leone, Marie, 2006, "Under Patriot Act, Feds Could Bug Boards," CFO Magazine, March 8. Downloaded from www.cfo.com/printable/article.cfm/5600289?f=options
3. Robinson, Kim Stanley, 2005, "Fifty Below Zero," Harper Collins, London.
   
   
4. Spann, M. and Skiera, B., 2003, "Taking Stock of Virtual Markets," OR/MS Today, Vol. 30, No. 5, October. Downloaded from www.lionhrtpub.com/orms/orms-10-03/frfutures.html.