Internet Privacy


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Internet Privacy

The e-commerce merchant (Tanaka, 1999). Table 1 illustrates some types of information collected by websites.
Table 1

Personal Information Collected

Type of Information Number of Sites1 Percent1
Personal Identifying 335 92.8%
Demographic 205 56.8%
Personal Identifying Only 132 36.6%
Demographic Only 2 .6%
Both Personal Identifying & Demographic 203 56.2%
None 24 6.6%
1 Number and Percentage from base of 361 surveyed websites.

Source: Georgetown Internet Privacy Policy Survey: Report to Federal Trade Commission June 1999

The consumer may feel a name or address is a small price for the item or piece of information they will receive. Usually, the consumer does not understand or take the time to find out the use of the information after placement in the websites’ database.
This electronic data gathering on consumers using the Internet by e-businesses creates the demand.

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Businesses that use the Internet as a forum need information about its customer base. Information about a customer or group of customers is useful in making business decisions and determining marketing trends. Many businesses buy, sell, and collect information about its customers to others businesses. Information privacy has emerged as the new commodity. As websites get better at gathering personal information, there is potential for abuse; privacy becomes a greater concern, hence more business for companies which keep information secure.

The Internet caught on so quickly, many businesses did not consider customer privacy as an issue. Even today most still do not have privacy policy notices. Table 2 shows the percentage of sites with privacy policy notices.

Table 2
Of Web Sites that Collect Personal Information, Percent with a Privacy Policy Notice, By Sample

Sample Percent Number Privacy Policy Notice

Comprehensive 2% 11 of 621
Health 2% 2 of 120
Retail 2% 2 of 123
Financial 2% 2 of 121
Most Popular 44% 47 of 108
Children 24% 46 of 188
Source: Interagency Financial Institution Web Site Privacy Survey Report, November 1999.

In a survey of 1400 Web sites in June 1998, the Federal Trade Commission (FTC) discovered that only 14 percent of all Web businesses informed visitors of their data gathering practices. A follow-up study of 364 commercial sites conducted in March 1999 by a Georgetown University professor found that nearly 66 percent of the sites had posted privacy policies (Furger, 1999). Vast majorities of Internet businesses use information practice statements or privacy policies . America Online (AOL), the worlds largest Internet Service Provider (ISP), has responded to its customers’ demands by ensuring the privacy of its records using privacy policies which allow customers to choose if information is released and to whom.

Solutions

E-merchants have to decide on one governing body or group to put into place rules that applies to Internet businesses. Before allowing a business to put up a site, it must agree to the conditions set forth by this group. Then, information may become more secure and it puts pressure on the business to make the consumers’ privacy the number one concern rather than the bottom line. It gives the consumer a place to voice complaints and means if a business violates the agreement between itself and the regulator, it is shut down immediately. Because this is a virtual world, it would apply to all Internet businesses, including those outside of the United States. An alternative to this is to leave things as they currently are. Allow businesses to post policies specific to their business. Let it be at the customers’ discretion as to whether they chose to use the website. This still leaves the door open for businesses to continue the collecting and selling of private information, but it forces the consumer to be more aware. Government regulation is another alternative. With government comes complication. Because the Internet is such a new forum for communication, it may take years for study on just how to approach regulating it. It is very questionable as to whether the government can effectively regulate this virtual world, especially when it encompasses a global community


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