How companies can turn privacy from threat to opportunity by giving sensitive consumer data to customers.

Who can see my data?

A) I can.
B) XYZ Corporation.
C) XYZ Corporation's marketing partners. (Click here to see the list.)
D) XYZ Corporation's affiliates and anyone it chooses.

As the customer picks answers, she gets a good idea of what is going on. In fact, if you're a marketer, why not dispense with a single right answer and let the consumer specify what she wants to have happen with her data (and corresponding privileges/access rights if necessary)? That's much more useful than vague policy statements. Suddenly, the disclosure statement becomes a consumer application that adds value to the vendor-consumer relationship.

And show the data themselves rather than a description. There's her browsing behavior, her choice of seats on your airline, or her choice of airlines on your travel site. There's her size and her style preferences on your fashion site. How much money has she spent with you, and on what? (Give her points and other recognition for her purchases.)

To be sure, this is all very easy if you are the site with which the user communicates directly; it is more difficult if you are in the background, a third party collecting information surreptitiously. But that practice should be stopped, anyway.

Meanwhile, just as they have with Facebook, users will become more familiar with the idea of setting their own privacy preferences and managing their own data. Smart vendors will learn from Facebook; the rest will lose out to competitors. Visualizing the user's information and providing an intelligible interface is an opportunity for competitive advantage.

I see this happening already with a number of companies, including some with which I am involved. For example, in its research surveys, 23andMe asks people questions such as how often they have headaches or whether they have ever been exposed to pesticides, and lets them see (in percentages) how other 23andMe users answer the question. This kind of information is fascinating to most people. TripIt lets you compare and match your own travel plans with those of friends. Earndit lets you compete with others to exercise more and win points and prizes.

Consumers increasingly expect to be able to see themselves both as individuals and in context. They will feel more comfortable about sharing data if they feel confident that they know what is shared and what is not. The online world will feel like a well-lighted place with shops, newsstands, and the like, where you can see other people and they can see you. Right now, it more often feels like lurking in a spooky alley with a surveillance camera overlooking the scene.

Of course, there will be "useful" data that an individual might not want to share—say, how much alcohol they buy, which diseases they have, or certain of their online searches. They will know how to keep such information discreet, just as they might close the curtains to get undressed in their hotel room after enjoying the view from the balcony.

Yes, living online takes a little more thought than living offline. But it is not quite as complex once Internet-based services provide the right tools—and once awareness and control of one's own data become a habit.