Regulations Internet Privacy -- Let

Regulations

Internet Privacy -- Let the consumer, government, or business decide how 'Big Browser' should be watching you?

According to tech industry analyst David G. Ries, the "protection of consumer privacy" was deemed to be one of the highest profile issues in business regarding consumer e-commerce. One poll cited by Ries, released by the Pew Internet & American Life Project, reported that 85% of surveyed Internet users were concerned about third parties accessing their personal information. 86% of those surveyed favored an mandatory 'opt-in' standard for online privacy protection, in other words, that a consumer had to agree to give all of his or her data to a site, before the site could store or utilize it. (Ries, 2001)

But online businesses, consumer advocates, and government regulators have very different views about the proper balance between industry self-regulation and government regulation to protect online consumers from unfair and abusive business practices. Businesses ask, should the government set standards in an ever-changing marketplace, at the risk of enacting ineffectual or prohibitory laws that do not keep pace with technology and hamper online business growth? But can, consumer advocates, and the consumers themselves, online businesses be trusted to protect consumer rights? To date, the federal government has taken a limited, segmented approach to protection of consumer privacy. There is no comprehensive federal legislation regulating online privacy or privacy in general. "Instead, Congress has enacted legislation to protect specific, limited areas of privacy," regarding website's free speech rights, without instituting broad legislation to address consumer privacy generally. (Ries, 2001) recent Federal Trade Commission survey found that most consumer websites collect a substantial amount of information personally identifying information from consumers. "This information is routinely collected from consumers through registration forms, order forms, surveys, contests, and other means, and includes personal identifying information, which can be used to locate or identify an individual." (FTC, 2000) Such sites allege this is no different from in-store voluntary marketing surveys, although one could note that one can refuse to answer such questions in life, without being turned out of the store or being barred from making a purchase.

The FTC survey also found that these sites provide only limited notice to consumers and protection of the information that these sites collect. Furthermore, other information about consumers was collected by websites, or by third-party network advertisers, through the use of devices like "cookies" or "Web bugs." A "cookie" is a text file placed on a consumer's computer by a website (or third party network advertiser) that provides information back to the server which placed it. A "Web bug" is a hidden method of monitoring consumer activity on the Internet. This process of collecting this kind of information by network advertisers is called online profiling. (Ries, 2001) if the first solicited form of behavior, through demanding consumers register with sites, could be compared to in-store surveys, cookies and web bugs are insidiously similar to having a store employee watch one's buying behavior on a security camera -- or have employees follow you throughout the mall, to see what competitor's stores you were apt to survey and buy from!

Consumers remain wary of buying online. The same survey quoted by Ries noted that 92% of respondents do not trust online companies to keep personal information confidential and 82% believe that the government should regulate use of personal information by online companies. (FTC Study, 2-3)

If companies do not respond, not only will business stand in danger of being over-regulated by the government, but also consumers may not trust sites and withdraw their business. This was recognized, not by a liberal publication, but the stalwart defender of capitalism known as Business Week. To stem consumer privacy fears, the publication proposed a four-point plan to protect online consumer privacy through relatively non-invasive federal legislation. The plan has the added advantage of being similar to the data privacy requirements adopted by the European Union, another concern, given the increasingly international nature of internet commerce -- and it might be added the United States cannot afford to lag behind in regulating protections, for fear of being out of step with such a major international player, given that U.S. consumers might turn to the more privacy friendly European sites, if United States competitors continue to impinge upon their personal security unabated.