I've been thinking about Google handing over identifiable information about users of its Orkut service to Brazilian authorities, and disclosures by Yahoo in China--couldn't such things be avoided fairly easily?
Enron set up huge numbers of off-shore companies to hide its debt and obscure its financial data. Why couldn't such a method be used by Google, for example, to hide and obscure its data collections?
Offshore companies could be created and made responsible for administration of parts of its services. They could pass back data to GOOG but that data would be only data that was needed for specific tasks, and could be stripped of indentifiable information.
If there were hundreds of such off-shore companies, maybe even independent rather than subsidiaries, handling various aspects of GOOG's services around the world, it would be very difficult for anyone to access, or force access, to personal data on many millions of users. Contractual agreements between GOOG and the off-shore companies could further prohibit disclosure of personal information to GOOG and others.
Authorities in any country would be hard pressed to chase down or subpoena private data from large numbers of off-shore companies if the data were to be fragmented in this way. It is easy targeting just one big player.
Maybe there is an opportunity for the off-shore financial centers around the world to move into this kind of business? After all, places such as Bermuda, Switzerland, etc, have strong laws protecting the identity of bank customers. It would be a small shift in the law to protect the identities of Internet users.
The Internet giants could still have their behavioral data on users but it would first be collected and laundered by the offshore companies to remove identifiable information. There would be nothing to hand over if authorities were to pressure Google, Yahoo, YouTube, or any other web services provider.
Yes, individuals with enough tech skills can already hide their online tracks. But it is the responsibility of the large services providers, such as Google and the others to look out for their users and take reasonable measures wherever neccessary. It's all about trust, and trust is hard won and easily lost.