Online Privacy And E-Commerce Research Paper

Length: 5 pages Sources: 3 Subject: Business Type: Research Paper Paper: #4735489 Related Topics: Ecommerce, E Commerce, Privacy, Online
Excerpt from Research Paper :

E-Commerce

A fresh channel of distributing personal information has been opened up by the internet. It is now the fastest developing electronic means of communication the world has ever seen. For instance, in the U.S. after the widespread use of electricity nearly 46 years later only 30% of American homes had access to electricity and almost 38 years elapsed before 30% of households had telephones with only 17% enjoying television. For a period of only 7 years another 30% had internet connection and after 5 years of exponential growth there was rapid expansion of fresh internet connection. More than five million Americans joined the communication superhighway in the first quarter of the year 2000 which translates into about 55,000 fresh users daily (Selis, Ramasasty, Kim, & Smith, 2003).

The quick spread and development of the internet has both pros and cons. The technological growth that makes it possible to get quick access to information and commercial items has given internet service providers a leeway to gather, keep, transfer and sell large degrees of pertinent information to and from persons who utilize their websites. Amongst the American public this gathering of personal data is an issue of great concern and worry (Selis, Ramasasty, Kim, & Smith, 2003).

Increasing concern about online privacy

How this data is gathered and put to use is a matter of public worry and a reason for many people to worry about personal privacy online. A study conducted in November 2000 by UCLA discovered that two-thirds of Americans who use the internet and about ae of non-users are anxious about going online because that endangers their privacy (Selis, Ramasasty, Kim, & Smith, 2003).

A poll carried out recently by Harris showed that 94% of Americans are worried that businesses might misuse their personal information. 29% feel that their privacy has been intruded on and that implies that internet users have a lower confidence rating. Just 21% demonstrated confidence in how the internet sellers use personal information while 61% of those who use the internet said they have opted not to make certain purchases because they were unsure how their personal information would be used. Businesses take a lot of caution to reassure users that present legislation safeguards their privacy or through self-regulation (Selis, Ramasasty, Kim, & Smith, 2003).

The risk to privacy is legally defined as the possibility of personal information being compromised due to online purchases. Even though is rapid growth of sales volume online fears about how online personal information is used remain constant amongst those who make online purchases (Dai, Forsythe, & Kwon, 2014).

Privacy- A drawback of E-commerce

The proliferation of online purchases there are several areas of concern that demand for limitation of e-commerce. One of the key issues pertains to security. For electronic commerce to be boosted in order to spur economic growth of various nations, it is vital that all security concerns are addressed as far as e-commerce is concerned. Customers can learn the value of goods and services by using features of websites such as transaction levels, website design, navigability, delivery capacities and quality of service. But if there is no information regarding security put in place the power of purchases customers have will be reduced. The information regarding security issues can be tackled well if customer confidence in the virtual shops is instilled. Any risks to do with use of personal information are an integral part of online shopping that must be adequately reduced. Some of the most feared risks that internet users face emanate from logistics, cash-flow issues and how information is shared across networks. The most important of the points raised above is information flow because it directly influences the other two factors. Other important factors to be considered include software, business transactions, system weaknesses, security, internet access, possible lack of security in transfer agreements and lack of credibility. Lastly, other factors to look into include leakage of information, interferences, identity, security threats to the system and leakage of privacy (Tsai & Yeh, 2010).

Business can build sophisticated and huge databases due to computerized transactions. That kind of information makes it possible for business to have a wider market reach for the services and products they offer. In the authority to access such information an upper hand (Selis, Ramasasty, Kim, & Smith, 2003).

Some negative consequences of e-commerce

Identity Theft

Often times, consumers remain unaware that their private information used during transactions is reused. In certain cases they end up being victims of identity theft due to widespread use and flow of free information. When this happens, the stolen identities can be used to make purchases or establish lines of credit thereby exposing the victims to payment defaults which can destroy their credit worthiness. Theft of identity is a real danger that is likely growing out of control. For instance, it is estimated that in the U.S. alone, between 500,000 to 700,000 online users will have their identities stolen this year. This costs consumers almost $1 billion annually. In a report submitted to the Congress by the Federal Trade Commission it was estimated that 1,153 investigations of misuse of social security numbers in 1997 as compared with just 305 in 1996. The FTC also added that Trans Union Credit Bureau had 522,922 inquiries regarding consumer fraud in 1997, up from 36,235 in 1992. And the American Bankers Association indicated that large banks experienced dollar losses totaling about $20 million per bank in 1996. Personal victims of identity theft take almost three or more years trying to rectify their credit reports and restore their credit credibility. Identity theft can be equated to the loss of privacy. As personal information circulates more freely through offline and online sharing, it is becomes readily available to those who seek to misuse it (Selis, Ramasasty, Kim, & Smith, 2003).

Information Sharing and Telemarketing Fraud

Another instance of the possible misuse of personal information is fraud in telemarketing. This costs consumers $15 billion and $40 billion yearly. The ready availability of personal information increases the ability of fraudulent telemarketers to make consumers victims. Using account information retrieved from financial institutions to reach customers, makes it possible for unethical telemarketers to make unauthorized charges on the customer's credit card accounts (Selis, Ramasasty, Kim, & Smith, 2003).

Online Data Collection

Consumers are rightly concerned about how their identifiable private personal and financial information are handled through the Internet channel. They experience shock to realize that information relating to their activities, varying from grocery purchases to online browsing, is employed for a variety of goals and made available to a number of other firms devoid of their permission (Selis, Ramasasty, Kim, & Smith, 2003).

What happens to our data online?

A bigger risk and most immediate threat to our privacy grow out of thousands of companies in the name of ecommerce websites. They're referred to as data brokers, and they collect, analyze and package some of our most important personal information and sell that as a product to each other, to advertisers, even the government, always without our direct knowledge. A lot of this can be related to the safe consumer marketing, which has been going on for many years. What is different is the nature and volume of the data being gathered from the internet and other mobile devices. This has led to the emergence of a multibillion dollar industry that operates beneath the surface without any regulation (Kroft, 2009).

Marketing organizations and companies have been collecting information about clients and other potential customers for decades now by gathering their addresses and names, keeping track of credit card transaction which is used when they are asked to fill out questionnaires so that they can be given discounts or brochures. Presently, so many people reveal personal information online without knowing that this is mined and sold to many other people. People sometimes hardly know the number of companies that tracks their personal information. The figure if revealed is certainly in the hundreds when you consider companies operating on the internet, retailers, advertisers, trade associations and research firms (Kroft, 2009).

The act of gathering, building up and selling personal information is called "database marketing." One of the largest companies in this arena, Acxiom possesses 23,000 computer servers capable of processing more than 50 trillion data transaction annually. This is according to the New York Times. It is said it has records of Millions of Americans which includes 1.1 billion browser cookies (tit-bits of data generated from websites which can be used to tracker a person's online activities)…

Sources Used in Documents:

References

Dai, B., Forsythe, S., & Kwon, W. (2014). The impact of online shopping experience on risk perceptions and online purchase intentions: does product category matter?, Journal of Electronic Commerce Research, 15(1), 13-24. Retrieved from http://www.csulb.edu/journals/jecr/issues/20141/Paper2.pdf

Kroft, S. (2009).The Data Brokers: Selling your personal information. Retrieved from http://www.cbsnews.com/news/the-data-brokers-selling-your-personal-information/

Marwick, A.E. (2014). How Your Data Are Being Deeply Mined. Retrieved from http://www.nybooks.com/articles/archives/2014/jan/09/how-your-data-are-being-deeply-mined/

Selis, P., Ramasasty, A., Kim, S., & Smith, C. (2003).Consumer privacy and data collection. Retrieved from http://www.atg.wa.gov/uploadedfiles/home/safeguarding_consumers/consumer_issues_a-z/corporate_responsibility/privacypolicy1.pdf
Tsai, Y.C., & Yeh, J.C. (2010). Perceived risk of information security and privacy in online shopping: A study of environmentally sustainable products, African Journal of Business Management, 4(18), 4057-4066. Retrieved from http://www.academicjournals.org/article/article1380549606_Tsai%20and%20Yeh.pdf


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