After last week's fuss about iTunes reporting back to Apple about users music libraries (see: The Canadian Privacy Law Blog: Is iTunes reporting your listening back to the mothership?), Apple is now doing what it should have done in the first place. It is telling users what it wants to do and is asking for their OK. Check out Boing Boing: Apple changes iTunes, now obtains consent before collecting info.
Businesses that want to collect information about their users and those who want to provide features that require information from their users must be transparent about what they are doing and why. This reminds me of the expression that "it is not the crime, but the coverup." Consumers want to trust the companies they deal with. They expect to know what's going on. If they don't, consumers assume the worst and the suspicion snowballs. Consumers fall into three groups: those who don't care about privacy, those who care about privacy but will trade personal information for value or convenience, and those who are borderline paranoid. Other than the tinfoil hat, they are hard to tell apart but the middle group is the majority. If a company is transparent, accountable and appears to be honest, the first two groups will trust it with personal information. The latter group will never be happy, but if you are transparent they will just not use your product. If you aren't, they will be very loud with their suspicions. Even a company as trusted as Apple can have the paranoid descend on them and the middle-of-the-road types voice suspicions.
Moral of the day: be open and transparent from the beginning and you'll have many more satisfied customers.