JIN-165 -- You Are Not a Number - Tell That to the Data Re-sellers

J@pan Inc Magazine Presents:
Commentary on the week’s business and technology news

Issue No. 165
Wednesday, January 23, 2002


++ Viewpoint: You Are Not a Number - Tell That to the Data Re-sellers
++ Noteworthy News
- METI Anti-Spam Bill
- Battered Nomura Announces 66 Percent Decline in Income
- Amazon.co.jp Strengthens Ties with Yahoo! Japan
++ Events

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++ View Point: You Are Not a Number -- Tell That to the Data Re-sellers

Spam and junk mail are part of modern life. If you've ever wondered
just where these spammers get your personal data or how much your
entry in a directory (say, that of a club you belong to or of
your kid’s baseball team) is worth, just hop online or even open the
phone book. You'll find assorted lists of so-called “data providers"
that publicly advertise “We Buy and Sell Personal Data.”

A private research firm, Seikei Data, in Shinjuku Ward, Tokyo, for
example, displays prices for directories on their site. It reads:

Golf club: JPY10,000 to JPY30,000
University alumni: JPY10,000 to JPY20,000
Employees of a private company: JPY10,000 to JPY50,000
Neighborhood association: JPY5,000 to JPY20,000

The price is negotiable, depending on the quality and freshness of
the data. The company's Web site encourages users to sign in to get
an estimate of what they've got by saying, "we protect your

A Seikei employee told us: "We're living in a democracy where things
are bought and sold on the basis of supply and demand. What's wrong
with buying directories? The problem is how the data is used, not the
fact that it's bought." He claims that Seikei Data uses data it
collects only for research purposes and never sells it.

Another company we plucked from the NTT Yellow Pages sells
comprehensive personal data (a package of names, addresses, telephone
numbers, birthdays, hobbies and e-mail addresses) at JPY15 per person.
A data provider in Shinagawa Ward, Tokyo, says that they sort their
data by whether the person has ever done catalog-shopping or has
entered a prize drawing. They can also sort by birthday or fitness
club membership. Suppose you want to buy personal data on females age
20 to 29, the company has 10,000 to 20,000 samples depending
on your need.

Of course, stealing corporate data is a criminal offense even in Japan.
For example, 39-year-old Eiji Sugawara was arrested on Monday for
having stolen data on a total of 260,000 customers between
November 2000 and April 2001 from a company he worked for, according
to the Metropolitan Police Department. The Japanese press reports that
he sold the data to a private credit research firm for JPY1 million
(JPY3.8 per customer). By doing the simple math of subtracting this
amount from JPY15, we can assume data providers make at least
JPY11.2 per person. The current legal system doesn't prohibit data
providers from buying data or selling it, unless they know the data
was obtained illegally, explains a Metropolitan Police Department
spokesman. “How could one prove that a data provider knew that the
data they bought was stolen," he asks.

Meanwhile, the Japanese Diet is now deliberating a personal data
protection bill. The law is aimed at enhancing certain protection
against the abuse of personal information. It would, if passed, allow
a company to use the data only when "the person is informed or is in
a position to know about the usage." It would also allow for warnings
or administrative sanctions for violations. The bill has been
fighting a losing battle since a draft was first written in late 1999
-- consumer groups and liberals have been resisting it strongly, as
the law would allow censorship of the government and be against the
notion of free speech. Consumer activist Keiko Sekine at Consumers
Japan remains skeptical. Sanctions "would make sense only if
applied to these directory providers," he says. "But, how can we be
sure" that the government won't abuse it for other purposes?

-- Sumie Kawakami

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** METI Anti-Spam Bill
Extract: The Ministry of Economy, Trade and Industry (METI) Tuesday
drafted a bill to protect mobile users from spam. The bill will be
presented to the current session of the Diet. The law would force
senders to notify recipients of return addresses so they can ask to
be removed from the mailing list. It would also allow ministries to
give warnings and order sanctions for violations.

Commentary: Although the tone of the draft itself is generally
amicable to users, practically speaking, how the law can be
enforced is another story.

From Nikkei Net:

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** Battered Nomura Announces 66 Percent Decline in Income

Extract: Nomura Holdings announced Tuesday that its ordinary income
-- a key gauge of the health of brokerages’ main operations -- in the
nine months from April to December declined by 66 percent year on year.
Ordinary income during Q3 (October to December) was JPY79.3 billion,
down 65 percent.

Commentary: Revenues from commissions declined significantly during
the quarter: Brokerage commissions were down 25.3 percent (“due to a
stagnant Japanese equity market,” and in particular to the impact of
September 11, Nomura explains); distribution commissions dropped by
32.5 percent (due to a decrease in the distribution volume of stock
investment trusts); and other commissions fell 23.3 percent (due to
a decrease in asset management fees among other things). In the
current severe business climate, the sector looks about due
for drastic restructuring.

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** Amazon.co.jp Strengthens Ties with Yahoo! Japan

Extract: Online retail site Amazon.co.jp announced Monday that it will
strengthen marketing ties with Japan’s largest portal, Yahoo! Japan.
Visitors to Yahoo now have easy access to over 220 million books and
other goods from Amazon.

Commentary: Amazon.com in the US has just announced its first
quarterly profit ($5 million), after losing $2.8 billion since it was
founded in 1995. But it says it could post a small loss in the current
quarter. CEO Jeff Bezos is trying hard to steer the company over that
mountain of debt to sustained profitability, but critics of the
company say this latest profit may not be the beginning of a
long-term trend -- they think more people shopped from home after
September 11.

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Written by Bruce Rutledge (bruce@japaninc.com) and Sumie Kawakami

Edited by J@pan Inc editors (editors@japaninc.com)

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