Limited Liability Persona in the New York Times

Blogger: Bob Blakley

Yesterday Denise Caruso took up the LLP torch in a New York Times technology section article entitled “Securing Very Important Data: Your Own”.  The article nailed the definition of the LLP, quoting Mike Neuenschwander thus:

To this end, Mr. Neuenschwander and his colleagues have floated the intriguing concept of the L.L.P.: the Limited Liability Persona. This persona would be a legally recognized virtual person in which users could “invest” the financial or identity resources of their choosing. Once their individual personas are created, consumers would be able to use them as their legal “alter ego,” even in financial transactions. “My L.L.P. would have its own mailing address, its own tax ID number, and that’s the information I’d give when I’m online,” Mr. Neuenschwander said.

Melissa Lafsky, the Times’ Freakonomics blogger, has added Denise Caruso’s article to her “FREAK-est” links list under the title “Identity data: the newest hot commodity for businesses”.   

To go beyond self-congratulation for a moment, we’d like to call your attention to another quote in the Times’ article, because Denise Caruso has made a very important point.  She quotes Drummond Reed, who says “The myth is that companies have to know all this information about you in order to do business with you ... [b]ut from a liability perspective, the less I know about my customers the better.”  Drummond might as well be reciting the headlines himself here: it was just last Thursday that the National Retail Federation issued an open letter to the credit card industry asking them to stop putting retailers on the horns of a dilemma by requiring them to store personal data, but then turning around and penalizing them when the stored data is stolen.

LLPs can help protect individuals by giving them identities which contain only a limited amount of personal information.  But they can’t help protect relying parties like retailers who collect, store, and (to some degree) protect personal information.  What’s needed is a whole system of legal constructs and new entities geared toward reducing identity and privacy risk for all parties.  The LLP is part of this equation.  Other parts of the equation are Identity Oracles (which allow relying parties to reduce transaction risk without collecting identity information; we wrote about them here) and a Relational Continuity Sockets Layer (which allows multiple parties to bring only the information and resources which are actually required for a transaction into a controlled environment which is fair and safe for all parties; we wrote about the RCSL here). If you’ve read the Times article and you want to go into more depth, you can see our original LLP coverage here, and we’ll be writing and speaking more about LLPs, Identity Oracles, and the RCSL during the coming months.