Wednesday, Jan. 28, 2009, is Data Privacy Day, and to mark the occasion, Microsoft is participating in a panel discussion in San Francisco with privacy experts from the California Office of Privacy Protection, the Center for Democracy and Technology, Intel, and MySpace.

Better this week than last, when Heartland Payment Systems and Monster.com disclosed major malware-driven data breaches that promise privacy headaches or worse for affected account holders.

It is such incidents that worry Peter Cullen, Microsoft's chief privacy strategist, because of the impact they can have on consumer trust. "Trust is becoming increasingly important," he said.

That's why Data Privacy Day exists. Microsoft and other organizations recognize that without trust, the online economy only gets worse for everyone. Cullen explained that Data Privacy Day represents a global opportunity for organizations and individuals to come together to discuss how to better educate consumers about data privacy issues.

One way to advance the discussion, Cullen said, was to commission some research, which Microsoft did in two cities, in California and Texas. "We wanted to understand how different segments of consumers, from teens to professionals to boomers, thought about privacy," he said. "There were some rather interesting results that came out of this."

"Our hypothesis is that across these three segments, there would be different ways of thinking about these things," said Cullen. "We were really surprised to learn there's a large degree of similarity in the way people think about privacy."

"There was a surprising degree of consensus in three things," he said. "One was that all of them felt this sense of resignation, meaning that they realized that once they put information online it's gone forever."

Consumers understand that there are risks, Cullen explained, but they don't really understand what those risks are.

Along similar lines, all three of the demographic segments surveyed said they take steps to protect their privacy, but they freely admit that they don't fully understand how privacy and security technologies work or what protection they're providing, Cullen said.

Cullen likened it to a placebo. "I took the pill and I feel better," was the way he described consumers' attitudes about privacy protection.

And in what Cullen said was a pleasant surprise, all three of the groups acknowledge they have some responsibility for their own online security and privacy. "They're not looking to the government or businesses to take care of them completely," he said. "They actually feel a sense of their own accountability for how their information is protected."

The problem is that they don't feel they understand how to do it.