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Yahoo! Vice President R. Preston McAfee explored the challenges of privacy on the Internet in his April 21 talk at the Kellogg School.

R. Preston McAfee

Web of deceit

Yahoo! VP shares how the Internet puts one’s privacy at risk - leaving users susceptible to all sorts of troubles

By Rachel Farrell

4/27/2009 - Surfing the Web in the privacy of your home isn’t as private as you might think. At any given moment, someone in cyberspace might be monitoring your online moves.

What’s at stake in this breach of privacy? A lot, said R. Preston McAfee, vice president of Yahoo! and the J. Stanley Johnson Professor of Business Economics and Management at the California Institute of Technology. McAfee’s April 21 Kellogg School talk, “Privacy and the Internet,” served as this year’s Susan Bies Lecture on Public Policy, which was launched in 2008 in honor of Northwestern alumna Susan Schmidt Bies

During his hour-long lecture, McAfee explored the challenges of privacy on the Internet, including the speed of information dissemination, slashdotting, the irreversibility of informational leaks, mechanisms for personalized privacy, and the legal issues involved in copying. He provided examples of how a violation of one’s online privacy can have serious repercussions.

For instance, the Internet has made it easier for thieves to steal credit cards and “bot” computers (use one computer to infect other computers) and then get the word out that these items are for sale on Web sites such as What’s worse, if you are the victim of credit card theft, “you’re guilty until proven innocent,” said McAfee. “The credit card company can say ‘I can’t tell that this vacation in Guatemala wasn’t [charged] by you.’”

A lack of privacy on the Internet can also cause price discrimination. When you search for products on Dell Computer’s Web site, you’ll be prompted to select a category that identifies you as a home, business or government organization. How you answer this question will determine the price you are offered for certain items, McAfee said. For example, the same printer that costs $79 for a home user might cost $129 for a business. “We expect to see more of this on the Internet in the future,” said McAfee.

However, that doesn’t mean that people are defenseless when they are online. “A lot is observed about you, but a lot of it can be hidden,” McAfee assured. For instance, you can hide your IP address if you invest in a virtual private network, or VPN. Or “you can expunge your cookies,” McAfee said, to hide your Internet history. “But less than 1 percent do.”