Amazon's Automated Gift-Suggestion Patent: A Firestorm Just Waiting to Catch

Last Updated Jul 9, 2010 5:33 PM EDT

A patent application and patent grant made public earlier this year suggest that Amazon (AMZN) is hot to institute an "automated gift registry" that will help people decide what to buy for others. It sounds innocuous enough, but it would make use of an amazingly broad collection of information -- not just from Amazon's own data on customer activity, but also from third party data brokers that hold personal details far beyond anything that Amazon explicitly asks of people, including gender, age, race, marital status, and even disposable income.

It's not that companies don't generally make use of expansive sets of consumer information. Frankly, I'm often surprised at how people who react badly to online behavioral marketing won't even blink at the eye-popping amount of information available from credit card companies, utilities, government databases, and other sources.

Fairly or unfairly, however, Amazon has long struggled with criticism over its handling of user data and its willingness to sell it as well as collect it. Many consumers are sensitive to privacy issues, and Amazon's activities regularly make it a target. My BNET colleague Damon Brown pointed out the potential problems of Amazon tracking what book sections people highlight in their Kindle readers.

Amazon's own patent describes a system that could deduce an "appropriate" gift for "single Protestant Asian women between the ages of 25 and 35 with disposable incomes greater than $50,000." Not only would Amazon know when to nix an idea -- no stogies for 10-year-olds, for example -- but the application explicitly states that it would somehow divine what might be appropriate based on such information. That could make highlighting selections seem inconsequential in comparison.

According to patent-office filings, Amazon's interest in such an automated system dates back to at least 2000. From time to time, however, company officials have denied that Amazon would use personal information in ways that might breach someone's privacy. A couple of years ago, Amazon director of consumer gift cards Michal Geller insisted that "anything related to privacy is off the table" at Amazon when it comes to dealing with personal information, specifically to avoid the "creepy" factor.

Geller's concern was about using internal data, not a combination of internal data and extensive additional personal information purchased from other sources. According to the patent, the system would track what recipients have bought for themselves or for others, what they already received and when they bought items (to see if they were running low and needed a refill). It would also warn people off buying something if it was already in the recipient's hands, or even on the way.

Needless to say, such a system could easily be misused -- not by Amazon, necessarily, so much as other users. What happens when someone wants to buy a gift for a spouse and the system suggests a do-it-yourself divorce kit -- just because said spouse had already stockpiled a small reference library on making the big split? Not only could people get inadvertent tips on personal behavior and inclinations, but the morbidly curious could try a variety of gifts, checking for appropriateness, to see what indirect indications they could receive. I tried contacting Amazon but never heard back, so can't tell you what the official line is. Nevertheless, this seems like a money-making way of leveraging information that could turn into a public relations firestorm.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.