&
The Montreal Gazette
Sunday, September 21, 1997

E-purse anyone?

Every citizen, or at least every citizen important enough to be worth watching, could be kept for 24 hours a day under the eyes of the police and in the sound of official propaganda, with all other channels of communication closed.
-- George Orwell
Nineteen Eighty-Four
by Douglas Sweet, dsweet@thegazette.southam.ca

A familiar, frightening figure of the future will stalk the Palais des Congrès this week when talk turns to new technologies that, used nefariously, could compromise people's privacy.

The technologies are at our doorstep, changing their shape and their abilities even as they wait to be invited into our lives. But, as a society, we know relatively little about them, how they work or for what purposes they are intended. And when it comes to technology, especially computer technology, what we don't understand we often fear.

Either that, says Quebec's privacy commissioner, Paul-André Comeau, "or we are so pleased by the technology that we don't look at the disadvantages and we buy everything they're selling."

And suffer the consequences later.

So words like Big Brother and Orwellian will be flung around at this week's international conference called Privacy: The New Frontier.

Experts and amateurs numbering in the hundreds will gather Tuesday through Friday to talk about protecting privacy in the face of galloping technology, profit- and data-hungry corporations (what might be called Big Brother Inc.), and governments that increasingly seek to guard access to precious services like health care or welfare all in a world webbed by the Internet.

"The technology is changing the way we have to deal with privacy and privacy problems", Comeau said in an interview last week.

"We don't have to fight the technology as such. But we have to study its impact on our private lives. The pace of change is so fast right now that it's almost impossible to keep track."

"I think we have to be quite cautious and advance step by step. We want to make sure that the technology will be used safely for the benefit of everyone in this province."

More than technology is on the conference agenda. One workshop bound to attract far more attention now than when the agenda was set this summer is a session on the potential conflict between press freedom and privacy.

Among the participants? Anthony Julius, a lawyer for the late Princess Diana.

But most of the conference is focused on how new technology may affect privacy adversely. From the Internet to the use of new security technologies in the workplace, rapid developments have occurred that could make privacy rules, where they even exist, outdated.

One of the new technologies singled out for discussion, and which is already in limited use in Canada today, is the so-called "smart card". This can be anything from your bus pass to your detailed medical history.

It consists of a credit-card-sized piece of plastic into which is imbedded a small but potentially powerful computer chip. One of the more imminent applications is the development of a money card, or E-purse, that could allow you to carry up to $1,000 on a single card. You could spend that $1,000, or any portion thereof, wherever a merchant or provider of service is equipped with a reader that transfers credits from your card to his.

To "load" your card, you could use a specially equipped automatic-teller machine or pay telephone, or even your home telephone if equipped with a card reader. Bell Canada can provide the technology today.

The money on your card would come straight out of your bank account. The advantage for buyers is the lack of a transaction fee for purchases, along with the convenience of not having to carry a couple of pounds of loonies and twoonies in one's pockets.

The advantage for merchants is not having to deal with cash, which takes time and a surprising amount of money to count and handle.

Perhaps not surprisingly, the coming proliferation of smart cards for commercial transactions is being driven by the big credit-card companies, Visa and, through a company it controls called Mondex, Master Card.

The Mondex system is on trial in the small Ontario city of Guelph, west of Toronto, where about 7,500 smart cards have been distributed. Everything and everyone from department stores to pizza-delivery boys and parking meters have been equipped with an electronic "wallet" that allows credits to be transferred from one smart card to another. About $1 million has changed hands that way since the cards went into circulation this spring.

There's a major difference between some of the new smart cards and debit or credit cards in wide use today. Smart cards carry their "brains" with them. Magnetic-strip cards leave their brains at the other end of a telephone line in a huge central database.

The difference can be important from a privacy standpoint. It is far easier to trace transactions through the central database than through data stored on smart cards or on the merchant's card reader. Privacy advocates hail this aspect of smart-card technology, while worrying about future applications that could require the storage of more personal data on the cards.

There is no central record of Mondex transactions beyond a few held on the card and a maximum of 300 on a retailer's terminal, a transaction record that cannot transmitted to a bank's database. Visa smart cards continue to record transactions in a central database.

So long as smart cards are promoted by such familiar enterprises as banks or credit-card companies, concerns about privacy have been relatively muted and the cards are like the Interac debit card likely to gain relatively wide acceptance.

Catherine Johnston, the Toronto-based president of the Advanced Card Technology Association of Canada, figures smart cards such as those offered by Mondex or Visa will be in wide use in this country in two to three years.

Johnston will speak at the Montreal conference, where she will present "the world's first privacy-impact assessment procedure for smart-card technology."

One smart-card critic is David Jones, a McMaster University computer-science professor who is head of an organization called Electronic Frontier Canada.

Jones insists Mondex has suggested its transactions are more private than they actually are, and points to a Jan. 30 Canadian Imperial Bank of Commerce memo on how to handle privacy issues as evidence that banks could be interested in tracing smart-card transactions.

According to Jones, CIBC was worried about being perceived as violating its customers' privacy if it was seen to be tracing smart-card purchases.

"Mondex knows that customers value privacy. They are sensitive to the fact that if they (customers) think there's a complete audit trail, they won't participate" in the smart-card technology, Jones said.

"Given the current situation in Guelph with Mondex naysayers", the CIBC memo states, "it's a significant risk that if any of these groups discover that Mondex transactional data is being collected from merchant logs, they would use and create every opportunity possible to stir negative headlines with `Big Brother' accusations.... CIBC feels the rewards to be gained from collecting this research data do not measure up to the risk. We believe there are other ways we can capture the information necessary to make informed business decisions."

Eileen Chadnick, a CIBC spokesman on smart-card technology, stressed the bank does not -- indeed, it cannot -- record smart-card transactions and has no intention of doing so. It is, through a variety of research methods, trying to learn from the Guelph project how the public is reacting to smart cards. She said the bank welcomes discussion of privacy issues, which are becoming more important for customers.

But when smart-card technology is considered a way for people to gain access to such government services as health care or social-assistance programs, or if the technology is used to allow an individual to carry his or her complete medical record on the card's chip, the cries of alarm from privacy advocates grow more acute.

That's when images of a government Big Brother begin to drift into view, although why a bureaucratic Big Brother is thought less benign than his corporate counterpart is not always clear.

Quebec, which leads North America in having its privacy legislation apply to the private as well as the public sector, and was a leader in the use of debit-card technology, is also ahead of the rest of the continent in preparing to use smart health cards as early as next year.

A two-year test run in the Rimouski area from May 1993 to March 1995 revealed that the chip technology is not yet sufficiently developed to allow complete patient records, including such items as X-rays, to be held on a card.

As a result, another test, to begin in the Lanaudière region next year, will establish a system in which patient records will be held in a central data base.

Doctors, nurses and ambulance technicians will be able to get access to different portions of the patient's files in the database only by using both their cards and the patient's card.

But the government is primarily interested in smart cards as a way of controlling medicare fraud. It has estimated that converting Quebec's health-card system to smart-card technology could save the public purse about $130 million a year.

Measuring that kind of public benefit against risks to individual privacy is the kind of decision society will have to make as new technology arrives in a rush.

Johnston is passionate about the advantages of loading an individual's medical history on to a smart card, which can be read by doctors, nurses, technicians and pharmacists.

She has reason to be.

Her father, who had a serious heart condition, was prescribed a drug that eventually killed him because one doctor didn't know what another was doing.

"The more information that travels with a patient, the better", Johnston said. She'd want medical personnel to have as much information about her as possible if she were unconscious after a car accident.

"My father died unnecessarily", Johnston added.

"If (Ontario) had had some kind of card with information that could have gone from institution to institution, he'd be alive today."


Copyright © 1997 by The Montreal Gazette. All Rights Reserved. Reprinted with permission.