Consumer Online Privacy

Consumer Online Privacy: Legal and Ethical Issues
Author(s): Eve M. Caudill and Patrick E. Murphy
Source: Journal of Public Policy & Marketing, Vol. 19, No. 1, Privacy and Ethical Issues in
Database/Interactive Marketing and Public Policy (Spring, 2000), pp. 7-19
Published by: American Marketing Association
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Consumer O nl i ne
P ri v a c y : L eg a l
a nd E t h i c a l I ssues
E v e M. Ca ud i l l a nd P a t ri c k
E .
Murph y
Consumer
pri v a c y
i s a
publ i c pol i c y
i ssue t h a t h a s rec ei v ed subst a nt i a l a t t ent i on ov er t h e
l a st
t h i rt y y ea rs.
Th e
ph enomena l g rowt h of
t h e I nt ernet h a s
spa wned
sev era l new c onc erns
a bout
prot ec t i ng
t h e
pri v a c y of
c onsumers. Th e a ut h ors exa mi ne bot h h i st ori c a l a nd c on-
c ept ua l a na l y ses of pri v a c y
a nd d i sc uss d omest i c a nd i nt erna t i ona l
reg ul a t ory
a nd
sel f-
reg ul a t ory a pproa c h es
t o
c onfront i ng pri v a c y
i ssues on t h e I nt ernet . Th e a ut h ors a l so
rev i ew et h i c a l t h eori es t h a t
a ppl y
t o c onsumer
pri v a c y
a nd
offer spec i fi c sug g est i ons for
c orpora t e
et h i c a l
pol i c y
a nd
publ i c pol i c y
a s wel l a s a resea rc h
a g end a .
Tra c ki ng t h e mov ement s of c onsumers a s
t h ey sh op
for
g ood s
i s not a new
ph enomenon.
Ma rket ers h a v e
l ong
c ol l ec t ed d a t a t o a ssi st i n
ma ki ng
d ec i si ons:
Th ey
h a v e wa t c h ed wh i l e
buy ers pi c k
out st ra wberri es a nd not ed
t h e
proc ess pa rent s g o t h roug h
t o c h oose a box of c erea l .
Consumers d o not
a ppea r
c onc erned a bout t h i s i nv a si on of
pri v a c y ;
a ft er
a l l , t h ey
a re i n a
publ i c pl a c e
a nd t h e i nforma -
t i on
bei ng
c ol l ec t ed -wh a t
t h ey
h a v e i n t h ei r c a rt a nd ul t i -
ma t el y purc h a se
a s wel l a s t h e
prod uc t s t h ey i nspec t -c a n
be
rea d i l y
observ ed .
P erh a ps
t h i s l a c k of c onc ern i s ba sed on
t h ei r
a ssumpt i on
of
a nony mi t y ;
t h ei r
sh oppi ng
beh a v i ors a re
c ol l ec t ed t o
st ud y pa t t erns
i n t h e
a g g reg a t e.
Wh en i nforma -
t i on i s c ol l ec t ed a t t h e c a sh
reg i st er,
c ust omers c a n c h oose t o
opt
i n
t h roug h
t h e use of a
persona l sh oppi ng c a rd ,
a c red i t
c a rd ,
or a c h ec k.
P resuma bl y ,
c ust omers
knowi ng l y g i v e up
some of t h ei r
pri v a c y
i n t h i s t ra nsa c t i on i n ret urn for some-
t h i ng
of v a l ue-a
prod uc t d i sc ount , c red i t ,
fut ure
c oupons
on
h ea v i l y
used
i t ems,
a nd so fort h .
Anony mi t y rema i ns,
h owev er,
i f
t h ey
use c a sh a nd resi st
request s
for t h ei r
ph one
number, a d d ress,
or
zi p
c od e.
Th i s
a nony mi t y c h a ng es
wh en c onsumers mov e ont o t h e
I nt ernet . No
l ong er
a re t h ei r
sh oppi ng
beh a v i ors a v a i l a bl e
onl y
i n t h e
a g g reg a t e. I nst ea d , i nd i v i d ua l s a re
t ra c ked ,
a nd
i nforma t i on i s c ol l ec t ed from
purc h a si ng
t ra nsa c t i ons a s
t h ey
surf
t h roug h
Web si t es. Th e
exc h a ng e
of v a l ue bet ween
ma rket er a nd c onsumer bec omes l ess d efi ned i n t h i s new
ret a i l
(now e-t a i l ) set t i ng
t h a n i t i s i n a bri c k-a nd -mort a r
st ore env i ronment . Th e
fol l owi ng quest i ons
out l i ne t h e c on-
c erns ra i sed
by
t h i s sh i ft i n
exc h a ng e
v enues:
*Wh a t a re t h e
pri v a c y
i ssues
pert i nent
t o onl i ne ma rket ers c ol -
l ec t i ng
a nd
usi ng
a c onsumer's i nforma t i on?
*Wh a t a re t h e et h i c a l
responsi bi l i t i es
of onl i ne ma rket ers?
*Wh a t
pol i c y
i ni t i a t i v es a re need ed i n t h i s new t ra nsa c t i ona l
env i ronment ?
P ri v a c y
a s i t rel a t es t o c onsumer i nforma t i on i s not a new
probl em
i n
ma rket i ng .
Th e
g rowt h
of
d a t a ba ses,
suc h a s
L exi s-Nexi s,
h a s mea nt t h a t a v i rt ua l "mount a i n" of i nfor-
ma t i on i s a v a i l a bl e on most c onsumers wh o use c red i t c a rd s,
own c a rs a nd h omes, a nd a re a c t i v e
spend ers (Cesped es
a nd
Smi t h 1993; DeCew
1997).
Use of a ut oma t ed
d i a l i ng sy s-
t ems, c a l l er I D, a nd e-ma i l h a v e
broug h t
c ri t i c i sm of ma r-
ket i ng resea rc h , a d v ert i si ng ,
a nd t h e t ra d i t i ona l
ma rket i ng
sy st em (Foxma n
a nd
Ki l c oy ne 1993).
Th e d i rec t ma i l i nd us-
t ry
h a s a l so been
t a rg et ed
for
ong oi ng
t h rea t s t o c onsumer
pri v a c y (Mi l ne
a nd Gord on
1993;
P h el ps, Nowa k, a nd
Ferrel l
1999).
And on t h e I nt ernet , wel l -known
c ompa ni es
h a v e been c ri t i c i zed : Ameri c a O nl i ne for
a t t empt i ng
t o sel l
subsc ri bers'
t el eph one numbers,
a nd I nt el for
d ev el opi ng
t h e new P ent i um
c h i p
t h a t i d ent i fi es users.
As use of t h e I nt ernet
g rows,
so d o c onc erns
reg a rd i ng
onl i ne c ol l ec t i on a nd use of c onsumer i nforma t i on. I n sev era l
surv ey s, respond ent s
h a v e t ol d ma rket ers t h a t
quest i ons
a bout
pri v a c y
a ffec t t h ei r
purc h a si ng
d ec i si ons. A U.S.
Depa rt ment
of Commerc e
st ud y t ra c ki ng
e-c ommerc e a nd
pri v a c y
fi nd s
c onc ern a bout onl i ne t h rea t s t o
pri v a c y a mong
81% of
I nt ernet users a nd 79% of c onsumers wh o
buy prod uc t s
a nd
serv i c es ov er t h e Web
(O bernd orf 1998).
Th ese
perc ent a g es
refl ec t t h e seri ousness of t h e
probl em
a nd a
possi bl e i mped i -
ment t o broa d -sc a l e
a d opt i on
of t h e I nt ernet for
purc h a si ng
d ec i si ons. For
exa mpl e,
Mi c rosoft wa s h a mmered
by pri v a c y
buffs bec a use i t s Wi nd ows 98
soft wa re,
wh en used on a net -
work,
c rea t es i d ent i fi ers t h a t a re c ol l ec t ed
d uri ng reg i st ra t i on,
wh i c h resul t s i n a v a st d a t a ba se of
persona l
i nforma t i on a bout
i t s c ust omers. Mi c rosoft i nsi st ed t h a t t h ese fea t ures were
d esi g ned
t o
i mprov e serv i c es,
but
fea ri ng
a
ba c kl a sh ,
t h e
c ompa ny
h a s
promi sed
t o
mod i fy
t h em. I t c l a i med c ust omers
c a n bow out wh en
t h ey reg i st er
for Wi nd ows
98,
a nd i t
pl ed g ed
t o
expung e persona l
d a t a i t c ol l ec t ed
i mproperl y
(Ba i g , St epa nek,
a nd Gross
1999) (for
sev era l ext end ed
exa mpl es
of c onsumer
pri v a c y c onc erns,
see t h e
Append i x).
Th e
purpose
of t h i s
a rt i c l e, t h en,
i s t o a ssess t h e c urrent
l a nd sc a pe
a nd a d d ress fut ure
c h a l l eng es reg a rd i ng
onl i ne
pri v a c y .
As we not ed
prev i ousl y , ma ny
of t h e
exi st i ng
ma r-
ket i ng
a nd
pri v a c y pa ra d i g ms
a re
c h a l l eng ed
i n t h e I nt ernet
env i ronment . We exa mi ne h i st ori c a l
perspec t i v es
a nd c on-
t empora ry
i ni t i a t i v es on c onsumer
pri v a c y
i n bot h sel f-
reg ul a t i on
a nd
g ov ernment reg ul a t i on
i n
ma rket i ng , g i v i ng
a t t ent i on t o bot h U.S. a nd i nt erna t i ona l c ont ext s. O ur
i nt end ed c ont ri but i on i s t o offer
et h i c a l , publ i c pol i c y ,
a nd
ma na g eri a l i nsi g h t s
i nt o t h ese
perpl exi ng
i ssues
fa c i ng
ma r-
ket i ng org a ni za t i ons
i n t h e new
c ent ury .
We a l so set a n
a g end a
for furt h er resea rc h .
E VE M. CAUDI L L i s
Vi si t i ng
Assi st a nt P rofessor of
Ma rket i ng ,
a nd
P ATRI CK E . MURP HY i s P rofessor a nd
Ch a i r, Depa rt ment
of
Ma rket i ng , Uni v ersi t y
of Not re Da me. Th e a ut h ors t h a nk t h e
spe-
c i a l i ssue ed i t or a nd t h e t h ree
a nony mous JP P &M rev i ewers for
t h ei r
h el pful sug g est i ons
on
prev i ous
v ersi ons of t h i s a rt i c l e.
Vol . 19 (1)
Spri ng 2000, 7-19
Journa l of P ubl i c
P ol i c y &
Ma rket i ng
7
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8 Consumer O nl i ne
P ri v a c y
A
Conc ept ua l Ana l y si s
of
P ri v a c y
Sev era l
l eg a l
a nd
ph i l osoph i c a l
sc h ol a rs h a v e exa mi ned t h e
t opi c
of
pri v a c y
i n t h e
h ome,
i n t h e
workpl a c e,
a nd i n
pub-
l i c . A d eba t e i n l a w a nd
ph i l osoph y
h a s c ent ered on wh et h er
a na rrow
(P a rent 1983)
or broa d
(DeCew 1997;
Sc h oema n
1992)
v i ew of
pri v a c y
sh oul d be used for
l eg a l
a nd et h i c a l
a ssessment s of
i nd i v i d ua l a c t i ons. Fri ed
(1968)
wrot e one of
t h e fi rst a nd most
i mport a nt ph i l osoph i c a l
t rea t ment s of
pri -
v a c y .
He c l a i ms t h a t
pri v a c y
i s
i nst rument a l l y
v a l ua bl e
bec a use i t i s
nec essa ry
t o
d ev el op i nt i ma c y
a nd t rust i n rel a -
t i onsh i ps.
At
a pproxi ma t el y
t h e sa me
t i me,
West i n
(1967)
exa mi ned
pri v a c y
a nd t h e fund a ment a l
ri g h t
of freed om.
Furt h ermore,
Ra c h el s
(1975) a rg ues
t h a t
peopl e
need t o c on-
t rol i nforma t i on a bout t h emsel v es t o ma i nt a i n a
d i v ersi t y
of
rel a t i onsh i ps.
Most
rec ent l y ,
Ni ssenba um (1998)
ra i ses t h e
not i on of
"pri v a c y
i n
publ i c "
t h a t d ea l s wi t h
ret a i l ers;
ma i l
ord er
fi rms;
med i c a l c a re
g i v ers;
a nd ot h er
org a ni za t i ons
t h a t
c ol l ec t , st ore, a na l y ze,
a nd sh a re
i nforma t i on a bout c on-
sumers. Sh e l i kens t h ese effort s t o a
t y pe
of
publ i c
surv ei l -
l a nc e t h a t
"c onst i t ut e[s]
a
g enui ne
mora l v i ol a t i on of
pri -
v a c y " (p. 593).
P ri v a c y
a nd
L eg a l
I ssues
E v en
t h oug h
t h e
ri g h t
t o
pri v a c y
wa s not
expl i c i t l y
men-
t i oned i n t h e Bi l l of
Ri g h t s,
t h e
t opi c
h a s been d eba t ed for
more t h a n a
c ent ury .
I n "one of t h e most i nfl uent i a l l a w
rev i ew a rt i c l es ev er wri t t en"
(DeCew 1997,
p. 14),
former
Ch i ef Just i c e L oui s Bra nd ei s
a nd a
c ol l ea g ue a rg ued
for a
broa d
i nt erpret a t i on
of a
person's ri g h t
t o
pri v a c y (Wa rren
a nd
Bra nd ei s 1890).
I t
a ppea rs si g ni fi c a nt
t h a t t h i s a rt i c l e
d efend i ng
c onsumers oc c urred i n t h e sa me
y ea r
a s t h e
pa s-
sa g e
of t h e Sh erma n Ac t
(26
St a t .
209),
wh i c h d ea l s wi t h
a nt i t rust a nd
c ompet i t i v e
i ssues.
Furt h ermore,
t h e
Fi rst ,
Th i rd , Fourt h , Fi ft h , Ni nt h ,
a nd Fourt eent h Amend ment s
prov i d e
for
prot ec t i ons
t h a t fa l l und er t h e
g enera l
rubri c of
pri v a c y (DeCew 1997;
Gi l l mor et a l .
1990).1
I n
a d d i t i on,
a
subst a nt i a l
bod y
of t ot a l l a w serv es t o
prot ec t
i nd i v i d ua l s'
pri v a c y (for
a bri ef
rev i ew,
see Sc h oema n
1992).
L eg a l prot ec t i on
for i nd i v i d ua l
pri v a c y
i n t h e Uni t ed
St a t es i s
rel a t i v el y rec ent ,
a s t h e fi rst fed era l l a w
pa ssed
l ess
t h a n
t h i rt y y ea rs a g o.
Th i s
l eg i sl a t i on
h a s been l i mi t ed
pri -
ma ri l y
t o t h e
prot ec t i on
of d a t a i n t h e c ont ext of
spec i fi c
g ov ernment
func t i ons or t h e
pra c t i c es
of
pa rt i c ul a r
i nd us-
t ri es, i nc l ud i ng
c red i t
report i ng ,
v i d eo
rent a l ,
a nd
ba nki ng
(for
a l i st of
pri v a c y l a ws,
see Ta bl e
1).
I n t h e
1970s, pro-
t ec t i on i nv ol v ed c onsumer not i fi c a t i on a nd t h e c orrec t i on of
i na c c ura c i es i n c onsumers' rec ord s. L a t er
l eg i sl a t i on
ext end ed
prot ec t i on
t o c ov er una ut h ori zed brea k-i ns a nd
i l l eg a l
a c c ess t o el ec t roni c rec ord
sy st ems.
Th e Fa i r Cred i t
Report i ng
Ac t (1970) c ov ers c red i t
report i ng a g enc i es'
c ol -
l ec t i on, st ora g e, use, a nd t ra nsmi ssi on of c red i t a nd fi na nc i a l
i nforma t i on (Jones 1991). Th e P ri v a c y
Ac t (1974) ext end s
t h ese rest ri c t i ons t o
g ov ernment a g enc i es,
a nd t h e Ca bl e
Communi c a t i ons Ac t
(1984)
c ov ers c a bl e
c ompa ni es'
c ol -
l ec t i on a nd use of subsc ri ber i nforma t i on. Th e
Comput er
Sec uri t y
Ac t
(1987)
out l i nes mi ni mum
a c c ept a bl e sec uri t y
pl a ns
for fed era l
a g enc i es
wi t h
c omput er sy st ems. Fi na l l y ,
t h e Vi d eo P rot ec t i on
P ri v a c y
Ac t
(1988) requi res
subsc ri ber
c onsent for t h e d i sc l osure of v i d eo sa l es a nd rent a l i nforma -
t i on
(Bl oom, Mi l ne,
a nd Ad l er
1994).
Th e 1990s h a s seen
onl y spora d i c a t t empt s
t o
prot ec t pri v a c y
a t t h e fed era l l ev el .
Th i s bri ef d i sc ussi on sh ows t h a t t h e
ma jori t y
of U.S. busi -
nesses a re not
reg ul a t ed
i n t h ei r c ol l ec t i on a nd use of c us-
t omer d a t a .
Consumer
P ri v a c y
Consumer
pri v a c y ,
a subset of
pri v a c y ,
h a s been d esc ri bed
a s bot h a t wo-d i mensi ona l
c onst ruc t , i nv ol v i ng ph y si c a l
spa c e
a nd
i nforma t i on (Good wi n 1991),
a nd a
c ont i nuum,
c ont i ng ent
on c onsumers a nd t h ei r i nd i v i d ua l
experi enc e
(Foxma n
a nd
Ki l c oy ne 1993).
A c ont i nuum
sug g est s
t h a t
c onsumers h a v e
v a ry i ng d eg rees
of c onc ern wi t h
pri v a c y
a nd
pl a c e
d i fferent v a l ues on t h ei r
persona l i nforma t i on;
t h erefore,
some c onsumers
ma y
be
wi l l i ng
t o t ra d e
a wa y
i nforma t i on for a more v a l ued i nc ent i v e. An i l l ust ra t i on of
t h ose t ra d e-offs i nv ol v es Ca t a l i na
Ma rket i ng Corpora t i on,
wh i c h offers a
v a ri et y
of i nc ent i v es t o i nd uc e c onsumers t o
prov i d e persona l
i nforma t i on.
For
exa mpl e,
a
person's zi p
c od e a nd
preferred superma rket
i s wort h $40 of na t i ona l
c oupons,
a nd a
persona l sh oppi ng
c a rd number
g a rners
free
prod uc t s (Qui c k 1998;
Th oma s
1998).
As
prev i ousl y
st a t ed ,
c onsumer
pri v a c y
i s c onfi ned t o t h e
c ont ext of i nforma t i on a nd i nc l ud es Foxma n a nd
Ki l c oy ne's
(1993)
t wo fa c t ors of c ont rol a nd
knowl ed g e. Th us,
t h e v i o-
l a t i on of
pri v a c y d epend s
on
(1)
c onsumers' c ont rol of t h ei r
i nforma t i on
i n a
ma rket i ng
i nt era c t i on
(i .e.,
Ca n c onsumers
d ec i d e t h e a mount a nd t h e
d ept h
of i nforma t i on
c ol l ec t ed ?)
a nd
(2)
t h e
d eg ree
of t h ei r
knowl ed g e
of t h e c ol l ec t i on a nd
use of t h ei r
persona l
i nforma t i on. I n
Fi g ure
1,
we d esc ri be
c onsumers' c ont rol a nd
knowl ed g e a ppl i ed
t o t h e
I nt ernet ;
i nc l ud ed i n t h i s
t a xonomy
a re t wo beh a v i ors c onsumers
eng a g e
i n on t h e I nt ernet :
purc h a si ng
a nd
surfi ng .
We a l so l i st
i ssues
pert i nent
t o ea c h c el l
a c c ord i ng
t o wh et h er c onsumers
h a v e c ont rol a nd /or
knowl ed g e
wh en
a c c essi ng
t h e I nt ernet .
Use of t h e I nt ernet
I nt ernet use h a s
g rown exponent i a l l y
i n t h e 1990s.
Al t h oug h
i t wa s
neg l i g i bl e
i n t h e
mi d -1990s,
use
by
Nort h Ameri c a n
c onsumers h a d ri sen t o a l most 60 mi l l i on
by
1997. More
t h a n 80 mi l l i on U.S. c i t i zens were
usi ng
t h e I nt ernet i n 1999.
O nl i ne use i s
pred i c t ed
t o
expa nd
a s t ec h nol og y d ec rea ses
t h e ba rri ers for nona d opt ers
a nd a d v a nc es
c a pa bi l i t i es
for
c urrent users, suc h a s v i d eo a nd v oi c e
support . Howev er,
onl y a mod est number of
peopl e a c c essi ng
t h e I nt ernet a re
a c t ua l l y purc h a si ng g ood s
or serv i c es t h roug h
a Web-ba sed
t ra nsa c t i on. Wh en a sked wh y t h ey d o not , c onsumers
report
a fea r t h a t c ompa ni es
wi l l mi suse
persona l
i nforma t i on.
Al ong
wi t h some sh oppi ng , users i nc rea si ng l y
a c c ess t h e
I nt ernet bec a use of i t s "d ec ent ra l i zed , open a nd i nt era c t i v e
na t ure" (Cent er for Democ ra c y a nd Tec h nol og y 1999).
P eopl e c a n c rea t e c ommuni t i es, c ommuni c a t e i d ea s, eng a g e
i n c ommerc e, a nd sea rc h for i nforma t i on wi t h unprec e-
d ent ed freed om a nd ea se. Th ese fa c t ors
bri ng
a d ownsi d e for
I Th e v a ri ous a mend ment s d ea l wi t h sev era l
a spec t s
of
pri v a c y : Fi rst ,
freed om t o t ea c h a nd
g i v e i nforma t i on; Th i rd , prot ec t i on
of one's h ome;
Fourt h , prot ec t i on
of t h e
sec uri t y
of one's
person, h ome, pa pers,
a nd
effec t s; Fi ft h , prot ec t i on a g a i nst sel f-i nc ri mi na t i on; Ni nt h , ri g h t s
sh a l l not
be c onst rued t o
d eny
or
d i spa ra g e
ot h ers ret a i ned
by peopl e;
a nd
Fourt eent h , t h e d ue
proc ess
c l a use a nd
c onc ept
of
l i bert y (DeCew 1997, pp.
22-23).
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All use subject to JSTOR Terms and Conditions
Journa l of P ubl i c
P ol i c y
&
Ma rket i ng
9
Ta bl e 1. U.S. Fed era l
Reg ul a t i on
on
P ri v a c y
Ac t Yea r
Desc ri pt i on
Fa i r Cred i t
Report i ng
Ac t 1970 Al l ows c onsumers t o c orrec t errors i n t h ei r c red i t
report s.
P ri v a c y
Ac t 1974 Gov ernment offi c i a l s
ma y
not ma i nt a i n sec ret fi l es or
g a t h er
i nforma t i on a bout
peopl e
i rrel ev a nt t o a l a wful
purpose.
Ri g h t
t o Fi na nc i a l
P ri v a c y
Ac t 1978 Gov ernment offi c i a l s need a wa rra nt t o obt a i n a ba nk's
c opi es
of c h ec ks.
E l ec t roni c Tra nsfer Fund s Ac t 1980 Ba nks must
not i fy
c ust omers wh en
d i sc l osi ng
rec ord s t o t h i rd
pa rt i es.
P ri v a c y
P rot ec t i on Ac t 1980 Gov ernment offi c i a l s
a re rest ri c t ed i n t h ei r
a bi l i t y
t o sei ze rec ord s of t h e
pri nt
med i a .
Ca bl e Communi c a t i ons Ac t 1984 Ca bl e
c ompa ni es ma y
not d i sc l ose c h oi c es c ust omers ma ke or ot h er
persona l
i nforma -
t i on wi t h out c onsent .
Fa mi l y
E d uc a t i on a nd
P ri v a c y
Ri g h t
Ac t 1984 Gov ernment offi c i a l s a re rest ri c t ed i n t h ei r
a bi l i t y
t o rev ea l t o t h i rd
pa rt i es
i nforma t i on
g a t h ered by a g enc i es
or ed uc a t i ona l i nst i t ut i ons.
Comput er Sec uri t y
Ac t 1987 Al l
g ov ernment a g enc i es d ev el op sa feg ua rd s
for
prot ec t i ng
sensi t i v e d a t a st ored i n t h ei r
c omput ers.
E l ec t roni c Communi c a t i ons
P ri v a c y
Ac t 1988 P roh i bi t s
t el eph one, t el eg ra ph ,
a nd ot h er c ommuni c a t i ons serv i c es from
rel ea si ng
t h e
c ont ent s of
messa g es t h ey
t ra nsmi t
(onl y
t h e
rec i pi ent
of t h e
messa g e
c a n be i d ent i fi ed ).
Vi d eo
P ri v a c y
P rot ec t i on Ac t 1988 Vi d eo rent a l
c ompa ni es ma y
not d i sc l ose c h oi c es c ust omers ma ke or ot h er
persona l
i nforma t i on wi t h out c onsent .
Comput er Ma t c h i ng
a nd
P ri v a c y
P rot ec t i on Ac t 1988 Al l ows
g ov ernment a l
offi c i a l s t o i nc rea se t h e a mount of i nforma t i on
t h ey g a t h er
i f t h e
sa feg ua rd s a g a i nst
i nforma t i on d i sc l osure a l so i nc rea se.
Tel eph one
Consumer P rot ec t i on
Ac t 1991 P roh i bi t s t el ema rket ers from
usi ng a ut oma t i c a l l y d i a l i ng t el eph one
c a l l s or fa c si mi l e
ma c h i nes t o sel l a
prod uc t
wi t h out
obt a i ni ng
c onsent fi rst .
Dri v ers'
P ri v a c y
P rot ec t i on Ac t 1993 P l a c es rest ri c t i ons on st a t e
g ov ernment a g enc i es
a nd t h ei r
a bi l i t y
t o sel l d ri v er's l i c ense
rec ord s.
Ch i l d ren's O nl i ne
P ri v a c y
P rot ec t i on Ac t 1998 Set s rul es for onl i ne c ol l ec t i on of i nforma t i on from c h i l d ren.
users. Bec a use t h ei r a c t i v i t i es a re c ond uc t ed
el ec t roni c a l l y ,
c onsumers l ea v e a t ra i l of i nforma t i on t h a t i nc l ud es not
onl y
purc h a si ng
i nforma t i on but a l so d a t a
pert a i ni ng
t o t h ei r
i nt erest s a nd
a c t i v i t i es,
wh i c h a l l ow onl i ne ma rket ers t h e
opport uni t y
t o
d ev el op profi l es
of i nd i v i d ua l users.
Ma rket ers
empl oy
a
v a ri et y
of onl i ne c ol l ec t i on t ec h -
ni ques, i nc l ud i ng mi ni ng
e-ma i l a d d resses from l i st
serv ers,
c h a t
rooms,
a nd news
g roups.
A
pa rt i c ul a r a d v a nt a g e
of t h e
I nt ernet , h owev er,
i s i t s
a bi l i t y
t o c ol l ec t rea l -t i me beh a v -
i ora l
d a t a ,
wh i c h a re a c c essed
t h roug h
t h e use of c ooki es.2
Th i s c ol l ec t i on
met h od ,
c a l l ed
"profi l i ng " (see
t h e subse-
quent d i sc ussi on), upd a t es
a c onsumer's
profi l e
a ft er
ev ery
Web si t e v i si t wi t h i nforma t i on suc h a s t h e h ome
pa g es
t h a t
were
v i si t ed ,
t h e i nforma t i on
t h a t wa s
d ownl oa d ed ,
t h e
t y pe
of browser t h a t wa s
used ,
a nd t h e I nt ernet a d d resses of t h e
si t es t h a t referred c onsumers t o a
pa rt i c ul a r
Web si t e
(FTC
1998;
Ma h uri n
1997).
E v en more
powerful
soft wa re now
c a n fol l ow c onsumers a nd c ol l ec t off-si t e d a t a . For
exa mpl e,
Doubl eCl i c k,
a
d ev el oper
of I nt ernet
soft wa re,
h a s d ev i sed
a t ool t h a t ext end s t h e rea c h of t h ese c ooki es a nd ena bl es
a d v ert i sers t o fol l ow t h e beh a v i or of users from t h ei r
ori g i -
na l Web si t es t o ot h ers
(Qui c k 1998).
O v erv i ew of O nl i ne
P ri v a c y Reg ul a t i on
Th ese
i nc rea si ng l y soph i st i c a t ed
d a t a c ol l ec t i on met h od s
h a v e ra i sed c onc erns a bout c onsumer
pri v a c y ,
a nd c onsi d er-
a bl e i nt erest h a s
emerg ed
i n
d ev el opi ng
some
t y pe
of
reg u-
l a t ory
st ruc t ure t o ensure
pri v a c y
on t h e I nt ernet .
Al t h oug h
sev era l
g roups
a re i nv ol v ed i n t h i s
proc ess,
t h e Fed era l
Tra d e Commi ssi on
(FTC)
h a s
c urrent l y
t a ken t h e l ea d i n
d ev el opi ng
st a nd a rd s of
c ompl i a nc e
for
c ompa ni es
ma rket -
i ng
on t h e I nt ernet . Th e c ommi ssi on
prepa red
a
ma jor report
t o
Cong ress
i n 1998 t i t l ed
P ri v a c y
O nl i ne. I n l a t e
1999,
t h e
FTC a nd t h e Commerc e
Depa rt ment
c onv ened a
worksh op
on t h e
t opi c
of onl i ne
profi l i ng
wi t h
represent a t i v es
from
I nt ernet
a d v ert i si ng
a nd d a t a c ol l ec t i on
fi rms, a c a d emi c s,
a nd
pri v a c y
a d v oc a t es.3 Th e
pri ma ry
reserv a t i on
expressed
2Cooki es a re t ext fi l es t h a t a re sa v ed i n a user's browser's
d i rec t ory
or
fol d er a nd st ored i n ra nd om-a c c ess
memory
wh i l e t h a t browser i s
runni ng .
Wh en
v i si t i ng
a Web si t e, a user i s
a ssi g ned
a
uni que i d ent i fi er, t h a t i s, a
c ooki e (not
t h e a c t ua l
i d ent i t y
of t h e
c onsumer),
wh i c h wi l l
i d ent i fy
t h a t
user i n
subsequent
v i si t s.
3O nl i ne
profi l es
of c onsumers a re c rea t ed
t h roug h
t h e
c ompi l a t i on
of
t h ei r
preferenc es
a nd i nt erest s; t h ese
profi l es
a re t h en used t o
d ev el op
a d v ert i sement s
t a rg et ed
t o t h ese c onsumers on
subsequent
Web si t e v i si t s.
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10 Consumer O nl i ne
P ri v a c y
Fi g ure
1. Cont rol a nd
Knowl ed g e
of O nl i ne
Surfi ng
a nd
P urc h a si ng
Ac t i v i t i es
Consumer Cont rol
No Yes
Surfi ng Surfi ng
*Mov ement s t ra c ked
*Tec h nol og y
sol u-
by
soft wa re.
t i ons,
c onsumer c a n
*Consumer no
l ong er
d i sma nt l e
t ra c ki ng
owns i nforma t i on. soft wa re.
*Genera l c ont rol
P urc h a si ng
ma i nt a i ned .
No
*Use c red i t c a rd , no
P urc h a si ng
pri v a c y
st a t ement .
*Consumer no
l ong er
*Use c a sh
(not
fea si -
owns i nforma t i on. bl e
onl i ne),
t ec h nol -
og y .
*Genera l c ont rol
Consumer
ma i nt a i ned .
Knowl ed g e
Surfi ng Surfi ng
*Abl e t o a c c ess
pri -
*Abl e t o a c c ess
pri -
v a c y st a t ement ,
no
v a c y st a t ement s,
opt -i n
a nd
opt -out opt -i n
a nd
opt -out
opt i ons,
no t ec h nol -
opt i ons, t ec h nol og y
og y
sol ut i ons. sol ut i ons.
*Consumer no
l ong er
*Consumer owns
owns i nforma t i on. i nforma t i on.
Yes
P urc h a si ng P urc h a si ng
*Ha v e t o use c red i t *Abl e t o a c c ess
pri -
c a rd .
v a c y
st a t ement wi t h
*P ri v a c y st a t ement , opt -out opt i on
i f
no
opt -out . usi ng
c red i t c a rd ,
*Consumer no
l ong er a bi l i t y
t o
pa y
c a sh
owns
i nforma t i on,
wi t h
opt -i n opt i on.
*Consumer owns
i nforma t i on.
by
t h e
pa rt i c i pa nt s
wa s t h e
pot ent i a l
for c onsumer
pri v a c y
v i ol a t i ons. Th e FTC c h a i rma n
sug g est ed
t h a t t h e i ssue i s
t roubl i ng
a nd wa rra nt s furt h er exa mi na t i on
(Gui d era 1999).
O ne
ov erri d i ng
c onc ern i s
d efi ni ng
t h e
c onc ept
of
per-
sona l i nforma t i on. A
g enera l d efi ni t i on,
"d a t a not ot h erwi se
a v a i l a bl e v i a
publ i c
sourc es"
(Bea t t y 1996,
p.
B
l ),
i s
t h oug h t
t o be t oo
broa d ,
bec a use i t woul d
exempt publ i c
rec ord s suc h a s h ome a nd c a r
ownersh i p
a nd a l l ow for t h e
a c c ess, use,
a nd d i ssemi na t i on of t h a t i nforma t i on
by
t h i rd
pa rt i es.
I n i t s
report
t o
Cong ress,
t h e FTC d el i nea t ed
per-
sona l i nforma t i on more
spec i fi c a l l y
a s
(1) persona l i d ent i fy -
i ng i nforma t i on,
suc h a s a c onsumer's
na me, post a l a d d ress,
or e-ma i l
a d d ress,
a nd
(2) a g g reg a t e, noni d ent i fy i ng
i nfor-
ma t i on used for
purposes
suc h a s ma rket
a na l y si s
or i n c on-
junc t i on
wi t h
persona l i d ent i fy i ng
i nforma t i on t o c rea t e
d et a i l ed
persona l profi l es
of
c onsumers,
suc h a s d emo-
g ra ph i c
a nd
preferenc e
i nforma t i on
(FTC 1998).
Th ese d efi ni t i ons d o not
a d equa t el y
c h a ra c t eri ze c onsumer
i nforma t i on.4
Th erefore,
i nst ea d of
d efi ni ng persona l
i nfor-
ma t i on a s t h e
opposi t e
of
publ i c spa c e
or a s t h e sum of i d en-
t i fy i ng
a nd
noni d ent i fy i ng i nforma t i on,
our
c onc ept i on
of
c onsumer i nforma t i on
enc ompa sses
bot h
publ i c
a nd
pri v a t e
i nforma t i on
(see Fi g ure 2). Th us,
persona l
i nforma t i on
i nc l ud es bot h
publ i c (e.g .,
a d ri v ers
l i c ense,
mort g a g e
i nfor-
ma t i on)
a nd
pri v a t e (e.g ., i nc ome)
d a t a . Th e d ot t ed l i ne
a l l ows for t h e
sh i ft i ng
of
persona l
i nforma t i on from
pri v a t e
t o
publ i c ;
t h e
publ i c port i on
of
persona l
i nforma t i on i s
t h oug h t
t o be
g rowi ng
a s t h e I nt ernet i nc rea ses t h e ea se wi t h wh i c h
c onsumer i nforma t i on c a n be
g a t h ered
a nd d i ssemi na t ed .
Wh o bea rs t h e
responsi bi l i t y
of
ensuri ng
c onsumer
pri v a c y
i s a sec ond c onc ern. I n d eba t e i s wh et h er t h ere sh oul d be i nd us-
t ry sel f-reg ul a t i on, t ec h nol og y -ba sed sol ut i ons,
c onsumer a nd
busi ness
ed uc a t i on,
a nd /or
g ov ernment reg ul a t i on (FTC 1998).
Current l y ,
t h e FTC end orses
i nd ust ry sel f-reg ul a t i on.
To
ensure
suc c ess,
t h e FTC h a s
d ev el oped
fi v e fa i r i nforma t i on
pra c t i c e pri nc i pl es
t h a t woul d
prot ec t
c onsumers
i n
t h e c ol l ec -
t i on, use,
a nd d i ssemi na t i on of t h ei r i nforma t i on:
4Th i s sec t i on benefi t ed from a
fa c ul t y
semi na r a t t h e
Uni v ersi t y
of Not re
Da me, i n wh i c h sev era l
pa rt i c i pa nt s g a v e h el pful
c omment s
reg a rd i ng pub-
l i c v ersus
pri v a t e
i nforma t i on.
Fi g ure
2. Consumers' P ersona l I nforma t i on Mod el
1980 1990 2000
P ubl i c I nforma t i on P ri v a t e I nforma t i on
Not es: Th e d ot t ed l i nes
represent
t h e t ra nsi t i on of a
g rea t er port i on
of c onsumers'
persona l
i nforma t i on from t h e
pri v a t e
t o t h e
publ i c
rea l m. Th i s sh i ft i s
t h oug h t
t o be t h e resul t of a n i nc rea sed use of d a t a ba ses
(ea rl y 1990s)
a nd t h e I nt ernet
(l a t e 1990s) a s mea ns t o c ol l ec t a nd
ma ni pul a t e
c onsumers'
i nforma t i on.
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All use subject to JSTOR Terms and Conditions
Journa l of P ubl i c
P ol i c y
&
Ma rket i ng
11
1. Not i c e/a wa reness: c ov ers t h e d i sc l osure of i nforma t i on
pra c -
t i c es, i nc l ud i ng
a
c ompreh ensi v e
st a t ement of i nforma t i on use,
t h a t i s, i nforma t i on
st ora g e, ma ni pul a t i on,
a nd d i ssemi na t i on;
2. Ch oi c e/c onsent : i nc l ud es bot h
opt -out
a nd
opt -i n opt i ons
a nd
a l l ows c onsumers t h e c h oi c e t o t ra d e i nforma t i on for
benefi t s,
d epend i ng
on t h e v a l ue c onsumers
pl a c e
on t h e benefi t s;
3.
Ac c ess/pa rt i c i pa t i on:
a l l ows for c onfi rma t i on of t h e
a c c ura c y
of
i nforma t i on; nec essa ry
wh en i nforma t i on i s
a g g reg a t ed
from
mul t i pl e sourc es;
4.
I nt eg ri t y /sec uri t y :
c ont rol s for t h eft or
t a mperi ng ;
a nd
5. E nforc ement /red ress:
prov i d es
a mec h a ni sm t o ensure c om-
pl i a nc e by pa rt i c i pa t i ng c ompa ni es;
t h i s mec h a ni sm i s a n
i mport a nt c red i bi l i t y
c ue for onl i ne
c ompa ni es
but i s
ext remel y
d i ffi c ul t t o
a c c ompl i sh effec t i v el y (FTC 1998).
O f t h ese
pri nc i pl es,
t h e i ssue of d i sc l osure
(und er
not i c e/a wa reness)
i s c ent ra l t o
pri v a c y
a nd c ov ers wh et h er
or not c onsumers a re i nformed of c ol l ec t i on met h od s a nd
i nforma t i on use. Th e c urrent
sel f-reg ul a t ory
env i ronment
sug g est s
t h a t ea c h
c ompa ny
i s
responsi bl e
t o
d ev el op
i t s
own d i sc l osure
st a t ement ,
wi t h
v a ry i ng
l ev el s of
not i c e,
c h oi c e, a c c ess,
a nd
sec uri t y . Th us,
i nd i v i d ua l fi rms d ec i d e
t h e
d eg ree
of i nforma t i on c ol l ec t i on a nd use
a l ong
wi t h t h e
t y pe
a nd st ruc t ure of d i sc l osure. Th i s l a c k of
reg ul a t ory
st a nd a rd i za t i on
sug g est s
t h a t t h e
responsi bi l i t y
t o a ssess t h e
pri v a c y pra c t i c es
of Web si t e
opera t ors
fa l l s t o t h e c onsumer
a nd t h a t t h ere i s l i mi t ed enforc ement a nd red ress.
Approa c h es
t o I nt ernet
Reg ul a t i on
As d i sc ussed
prev i ousl y , l eg a l prot ec t i on
for c onsumer
pri -
v a c y h i st ori c a l l y
h a s foc used on i nd ust ri es
t h oug h t
t o be
pa rt i c ul a rl y eg reg i ous
i n t h e c ol l ec t i on a nd use of
persona l
i nforma t i on. Unl i ke t h ese more st a t i c
i nd ust ri es, h owev er,
i n wh i c h
reg ul a t ory
a c t i ons a re
rea sona bl y ea sy
t o
c ont rol ,
t h e I nt ernet i s
experi enc i ng ra pi d g rowt h ,
wh i c h l i mi t s
g ov -
ernment enforc ement . E v en t h e
FTC
quest i ons
t h e
sc ope
a nd ext ent of t h e
g ov ernment 's powers
t o
pursue reg ul a t ory
responsi bi l i t y .
Th e
d i ffi c ul t y
i n
reg ul a t i ng
onl i ne
pri v a c y
i s
a c ent ra l i ssue d eba t ed
a mong sel f-reg ul a t ors, g ov ernment
reg ul a t ors,
a nd
pri v a c y
a d v oc a t es.
I nd ust ry Sel f-Reg ul a t i on
Sev era l
a rg ument s
h a v e been a d v a nc ed t h a t
g ov ernment
i nv ol v ement woul d h urt ra t h er t h a n
h el p
c onsumers a nd
busi nesses
(Mi l l er 1998). Fi rst , c onsumers
mi g h t g et
a fa l se
sense of
pri v a c y
i f l a ws were
pa ssed
t h a t c oul d not be
enforc ed bec a use of t h e
d y na mi c
na t ure of Web si t e c rea t i on
(Ja mes 1998). Sec ond , g ov ernment reg ul a t i on
woul d i nt er-
fere wi t h t h e fl ow of c onsumer i nforma t i on t h a t ena bl es
c ompa ni es
t o
prov i d e prod uc t s
a nd serv i c es t h a t c a t er t o t h e
need s a nd wa nt s of t h ei r
c ust omers,
wh i c h woul d resul t i n
d ec rea sed c onsumer c h oi c e a nd d i mi ni sh ed
c ompet i t i on.
Furt h ermore, ma nd a t ory opt -i n
a nd rest ri c t i ons on t h e sa l e
of c ust omer i nforma t i on c oul d c rea t e ba rri ers t o
ent ry
t h a t
woul d fa v or
ol d er,
more est a bl i sh ed
c ompa ni es
t h a t h a v e
y ea rs
of
c ol l ec t i ng
i nforma t i on a nd
d ev el opi ng
d a t a ba ses
(Bra nd t 1998).
Newer
c ompa ni es
woul d be a t a d i sa d v a n-
t a g e
i f
t h ey
were not a l l owed t o
purc h a se
i nforma t i on.
Th i rd ,
c onsumers woul d l ose t h ei r
ri g h t
t o c h oose t h ei r
d esi red l ev el of
pri v a c y .
Rec a l l t h a t some c onsumers wel -
c ome t h e c ol l ec t i on of t h ei r i nforma t i on a nd
wi l l i ng l y
sel l i t
i f
t h ey
a re
prov i d ed
t h e
ri g h t
i nc ent i v es.
Fi na l l y , g ov ern-
ment i nt erv ent i on
mi g h t
v i ol a t e free
speec h .
Th e i nforma -
t i on used i n t h e c rea t i on of d a t a ba ses i s si mi l a r t o
g ossi p
(Si ng l et on 1998),
wh i c h i s
prot ec t ed
und er t h e Fi rst
Amend ment ,
a nd
mi g h t
be l ess h a rmful bec a use t h e i nfor-
ma t i on i n d a t a ba ses i s
l i kel y
more
a c c ura t e,
l ess
persona l ,
a nd so fort h .
Sel f-reg ul a t i on
a d v oc a t es
a rg ue
t h a t c onsumer i nforma -
t i on i s t h e found a t i on on wh i c h busi nesses c a n suc c eed a nd
a l l ows t h em t o
d ev el op
ma rket s ba sed on t h ei r c ust omers.
Furt h ermore,
t h ese a d v oc a t es c ont end t h a t t h e c ol l ec t i on
a nd use of t h i s i nforma t i on h a rms c onsumers
onl y by bei ng
a n
a nnoy a nc e,
wh i c h i s not c onsi d ered rea son
enoug h
t o c a l l
for st ri c t er
reg ul a t ory
mea sures. A
brea kt h roug h
i n t h e
sel f-reg ul a t ory
a rena oc c urred wi t h t h e a nnounc ement
by
I BM
i n
Ma rc h 1999 t h a t t h e
c ompa ny
woul d
pul l
i t s I nt ernet
a d v ert i si ng
from
a ny
Web si t e i n t h e Uni t ed St a t es or
Ca na d a t h a t d i d not
post
c l ea r
pri v a c y pol i c i es
wi t h i n 60
d a y s (Auerba c h 1999). O nl y
30% of t h e 800 si t es on wh i c h
I BM a d v ert i sed a t t h a t t i me ma d e suc h d i sc l osures.
Seei ng
t h e
pot ent i a l
for c onsumer c onfusi on
reg a rd i ng
t h e
effec t i v eness of
sel f-reg ul a t i on,
a new v eh i c l e
(t h i rd -pa rt y
i nt erv ent i on)
h a s
emerg ed . Th i rd -pa rt y
ent i t i es h a v e formed
t o
prov i d e l eg i t i ma c y
a nd t rust wort h i ness t o Web si t es
t h roug h
sea l s of
a pprov a l
t h a t a re
d esi g ned
t o c onfi rm a d e-
qua t e pri v a c y c ompl i a nc e (see
Ta bl e
2).
Th ree suc h ent i t i es
a re
TRUSTe,
t h e O nl i ne
P ri v a c y Al l i a nc e,
a nd t h e Counc i l
Ta bl e 2.
Th i rd -P a rt y
E nt i t i es
Goa l s L i mi t a t i ons
TRUSTe
P rov i d es
g ua ra nt ee
of
pri v a c y prot ec t i on:
1. L i mi t ed
i nd ust ry c ompl i a nc e.
1. Gi v es a sea l of t rust t o Web si t es t h a t submi t t o 2. Cri t i c s
sug g est
t h a t
g ui d el i nes g o
a ppl i c a t i on proc ess.
furt h er i n
prot ec t i ng pri v a c y .
2. Ac t s a s a
c l ea ri ng h ouse
for
pri v a c y
v i ol a t i on
report s.
3. P rov i d es a c h i l d ren's
pri v a c y
sea l
prog ra m.
1.
Vol unt a ry
na t ure of member c om-
BBBO nl i ne P rov i d es sea l of
a pprov a l
t o Web si t es t h a t
a d equa t el y pa ny c ompl i a nc e.
perform t h roug h
a sel f-a ssessment a nd
pa y
a fee. 2. E nforc ement .
1.
Vol unt a ry
na t ure of member c om-
Al l i a nc e for
P ri v a c y
P ubl i sh es
g ui d el i nes
for member
c ompa ni es
t o fol l ow
pa ny c ompl i a nc e.
i n t h e c ol l ec t i on a nd d i ssemi na t i on of i nforma t i on. 2. E nforc ement .
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All use subject to JSTOR Terms and Conditions
12 Consumer O nl i ne
P ri v a c y
of Bet t er Busi ness Burea us,
I nc .
(BBBO nl i ne).
TRUSTe i s
a n
i nd ust ry -l a unc h ed
i ni t i a t i v e
support ed by
suc h
c ompa -
ni es a s AT&T, Ameri c a O nl i ne, Net sc a pe,
O ra c l e, Wi red ,
a nd Ta nd em
Comput ers (Ba y ne
1998;
Wi ent zen a nd Smi t h
1998). Si mi l a rl y ,
t h e O nl i ne
P ri v a c y
Al l i a nc e i s a c oa l i t i on
of 85 ma rket ers, t ec h nol og y
fi rms,
a nd a ssoc i a t i ons,
i nc l ud -
i ng
Ti me Wa rner,
Wa l t
Di sney ,
Ameri c a O nl i ne,
a nd I BM.
Th e BBBO nl i ne offers a d i st i nc t sea l for si t es wi t h a d v ert i s-
i ng
for c h i l d ren a nd wi l l t a ke a c t i on
a g a i nst c ompa ni es
t h a t
d o not
c ompl y (O h l son 1999).
Th e effec t i v eness of t h ese
org a ni za t i ons
h a s been
ques-
t i oned . O f c onc ern i s t h e
sc ope
of t h ei r enforc ement
prog ra ms
a nd
c ompl i a nc e;
t h a t
i s,
d o
t h ey prov i d e
t h e musc l e
requi red
t o
set
up
a n env i ronment t h a t benefi t s c onsumers
g i v en
t h e enor-
mi t y
of t h e I nt ernet ? I ssues i nc l ud e
membersh i p
numbers,
requi rement s,
a nd
c ompl i a nc e,
a s wel l a s t h e
l ong -t erm
mi s-
si ons of t h ese
org a ni za t i ons (Wi g fi el d 1999b).
For
exa mpl e,
TRUSTe i s
rev i si ng
i t s
l i c ensi ng a g reement s,
wh i c h
ma y
c h a ng e
c onsumers'
prot ec t i on
l ev el s. Some c ri t i c s
a rg ue
t h a t
TRUSTe fl unked i t s fi rst
bi g
t est wh en t h e
org a ni za t i on
fa i l ed
t o
repri ma nd
Mi c rosoft
(a $100,000 c orpora t e pa rt ner)
for
put t i ng
a n i d ent i fi er on Wi nd ows 98
(New
York Ti mes
1999).
Al t h oug h
t h e effec t i v eness of t h ese t h i rd
pa rt i es
h a s been
ques-
t i oned ,
t h e FTC
rec ent l y
h a s t est i fi ed t h a t suffi c i ent
prog ress
i s
bei ng
ma d e t owa rd
sel f-reg ul a t i on, post poni ng
furt h er
g ov ern-
ment a l a c t i on a t t h i s t i me
(FTC 1999;
Hec kma n
1999).
U.S. Gov ernment 's P osi t i on
Th e Cl i nt on a d mi ni st ra t i on a nd t h e FTC a d v oc a t e
sel f-reg ul a t i on
of c ommerc i a l c ol l ec t i on a nd use of c on-
sumer i nforma t i on on t h e I nt ernet
(FTC 1998;
Ha rmon
1998b;
Messmer
1998).
Th e a d mi ni st ra t i on bel i ev es t h a t t h e
fl exi bi l i t y sel f-reg ul a t i on g i v es
t o busi nesses i s
i mport a nt
t o
t h e suc c ess of I nt ernet c ommerc e. I n a 1999
report
t o t h e
Subc ommi t t ee on Communi c a t i ons,
t h e FTC st a t ed t h a t
"sel f-reg ul a t i on
i s t h e l ea st i nt rusi v e a nd most effi c i ent
mea ns t o ensure fa i r i nforma t i on
pra c t i c es
onl i ne, g i v en
t h e
ra pi d l y ev ol v i ng
na t ure of t h e I nt ernet a nd
c omput er
t ec h -
nol og y " (FTC 1999, p. 4).
As d i sc ussed
prev i ousl y ,
i t wi l l
c ont i nue t o moni t or t h e
prog ress
of
sel f-reg ul a t i on
bec a use
of
c h a l l eng es
st i l l
fa c i ng
t h e
i nd ust ry (DI RE CT
Newsl i ne
1999; Wi g fi el d 1999a ).
Th ese
c h a l l eng es
i nc l ud e
ed uc a t i ng
t h ose
c ompa ni es
t h a t und erest i ma t e t h e need for
pri v a c y
a nd
c rea t i ng
i nc ent i v es for
g rea t er i mpl ement a t i on,
a s wel l a s
ed uc a t i ng
c onsumers a bout
pri v a c y prot ec t i on (FTC 1999).
Al t h oug h
t h e
g ov ernment 's posi t i on a ppea rs
fa v ora bl e t o
sel f-reg ul a t i on a d v oc a t es, t h ey
c ont i nue t o l obby for a c om-
pl et el y
h a nd s-off posi t i on. Th ey poi nt
out t h a t t h oug h
t h e
FTC ma y
fa v or sel f-reg ul a t i on, h i st ory
i nd i c a t es ot h erwi se.
O ne exa mpl e
c i t ed i s former FTC c ommi ssi oner Ch ri st i ne
Va rney 's posi t i on
t h a t v ol unt a ry sy st ems
of st a nd a rd s or ra t -
i ng s,
wh et h er for pri v a c y
or c ont ent , sh oul d be ba c ked up
wi t h st rong g ov ernment
enforc ement a g a i nst
mi sst a t ement
a s ei t h er d ec ept i on
or fra ud (Si ng l et on 1998).
Th e E uropea n
Uni on's P ri v a c y
I ni t i a t i v es
O f g rea t
i nt erest i n t h e pri v a c y
d eba t e a re t h e rec ent a c t i ons
t a ken by
t h e E uropea n
Uni on (E U), wh i c h h a s just t i g h t ened
i t s pri v a c y
l a ws. I t pa ssed
a t rea t y -l i ke
d i rec t i v e i n
1995,
wh i c h sh oul d h a v e g one
i nt o effec t O c t ober 24, 1998,
i nt end i ng
t o h a rmoni ze pri v a c y prot ec t i on
i n a l l of i t s 15
member c ount ri es
(Ha rbert 1998;
Hec kma n 1999;
Messmer
1998).
Th i s d i rec t i v e
requi res a d equa t e pri v a c y prot ec t i on
from t h e c ount ri es of busi nesses
export i ng persona l
i nfor-
ma t i on from t h ese 15 c ount ri es. Th e
upsh ot
of t h e d i rec t i v e
i s t h a t U.S.
c ompa ni es
suc h a s h ot el s, a i rl i nes,
a nd ba nks
d oi ng
busi ness i n
E urope
c a nnot t ra nsfer i nforma t i on from
E urope
t o t h e Uni t ed St a t es
(L ei bowi t z 1999;
Swi re a nd
L i t a n
1998). Ac c ord i ng l y ,
d est i na t i on c ount ri es must h a v e
pri v a c y prot ec t i ons
t h e E U d eems
a d equa t e,
wh i c h i nc l ud e
t wo
c omponent s:
a na t i ona l
pri v a c y
l a w
c ov eri ng
bot h t h e
publ i c
a nd
pri v a t e
sec t ors a nd enforc ement
c a pa bi l i t i es
t h roug h
na t i ona l
reg ul a t ory a g enc i es.
Th e E U d i rec t i v e,
wh i c h t a kes a more c onsumer-ori ent ed
foc us t h a n U.S.
c ompa ni es
d o,
i s st ruc t ured i n wh en a nd
h ow a
c ompa ny
c a n c ol l ec t a nd use c onsumer i nforma t i on
(Ha rbert 1998). Fi rst ,
a
c ompa ny
sh oul d h a v e a
l eg i t i ma t e
a nd
c l ea rl y
d efi ned
purpose
t o c ol l ec t i nforma t i on. Sec ond ,
t h a t
purpose
must be d i sc l osed t o t h e
person
from wh om t h e
c ompa ny
i s
c ol l ec t i ng
i nforma t i on. Th i rd , permi ssi on
t o use
i nforma t i on i s
spec i fi c
t o t h e
ori g i na l purpose.
Fourt h ,
t h e
c ompa ny
c a n
keep
t h e d a t a
onl y
t o
sa t i sfy
t h a t rea son;
i f t h e
c ompa ny
wa nt s t o use t h e i nforma t i on for a not h er
purpose,
i t need s t o i ni t i a t e a new i nforma t i on c ol l ec t i on a nd use
proc ess.
As i t st a nd s now, onl y
a few U.S.
c ompa ni es (e.g .,
Ci t i c orp,
Ameri c a n
E xpress;
L ei bowi t z
1999)
c oul d meet
t h ese c ri t eri a ,
a nd
a d opt i on
of t h ese st a nd a rd s
ma y
h a v e a
c h i l l i ng
effec t on I nt ernet
ma rket i ng .
E nforc ement for t h e E U's d i rec t i v e h a s been
d el a y ed
for
t wo rea sons
(Hec kma n 1999). Fi rst , onl y
a bout h a l f of E U
member c ount ri es h a v e
pa ssed
l a ws
enforc i ng
t h e d i rec t i v e.
Sec ond ,
t h e E U
c urrent l y
i s
neg ot i a t i ng
wi t h t h e U.S.
Depa rt ment
of Commerc e on Sa fe Ha rbor
prov i si ons
for
U.S.
c ompa ni es.5
Th ese
neg ot i a t i ons
wi l l
ev ent ua l l y
resul t
i n t h e formul a t i on of a Sa fe Ha rbor
prog ra m a c c ept a bl e
t o
E uropea n
offi c i a l s.
Al t h oug h
bot h
g roups a g ree
on t h e
pri n-
c i pl es (t h e
sa me a s FTC fa i r i nforma t i on
pri nc i pl es),
i nc l ud -
i ng rec og ni t i on
t h a t U.S. fi rms wi l l be l i mi t ed i n
sel l i ng
d a t a ba ses,
t h e
d esi g na t ed
enforc ement
bod y
t o
reg ul a t e
U.S.
fi rms c ont i nues t o be a
ma jor
obst a c l e. Wh en
i mpl ement ed ,
Sa fe Ha rbor
prog ra ms
wi l l
g ua ra nt ee
t h a t t h ose
c ompa ni es
a d mi t t ed i nt o t h e
prog ra m
c a n be a ssumed t o be
i n c ompl i -
a nc e a nd wi l l be a l l owed t o
c ompet e
i n
E urope.
P ri v a c y
Ad v oc a t es' P osi t i on
Two
pri ma ry
c onc erns d omi na t e
pri v a c y
a d v oc a t es'
a rg u-
ment
a g a i nst sel f-reg ul a t i on:
t h e
v ol unt a ry
na t ure of
i nd us-
t ry c ompl i a nc e a nd t h e d eg ree of c onsumer knowl ed g e a nd
c ont rol of i nforma t i on c ol l ec t i on a nd use (Rot enberg 1998).
Th e v ol unt a ry
na t ure of c ompl i a nc e
i s espec i a l l y i mport a nt
t o pri v a c y a d v oc a t es, wh o a rg ue
t h a t busi nesses d o not
a l wa y s c ompet e
wi t h c onsumers' best i nt erest s i n mi nd ; i t i s
more l i kel y
t h a t t h e d eg ree
t o wh i c h a busi ness c ompl i es
i s
ba sed more on i t s own profi t objec t i v es.
I t i s a rg ued
furt h er
t h a t ev en fi rms t h a t ma ke a c ommi t ment t o
pri v a c y ma y
a t
t i mes c ompromi se pri v a c y
st a nd a rd s i f i t i s c ompet i t i v el y
nec essa ry . P ri v a c y
a d v oc a t es poi nt
t o l ow c ompl i a nc e
ra t es
5Sa fe Ha rbor
prog ra ms
wi l l be set s of rul es c rea t ed
by i nd ust ry org a ni -
za t i ons for t h ei r members a nd
d esi g ned
t o
c ompl y
wi t h v a ri ous FTC
reg u-
l a t i ons; i f a
c ompa ny
i s a d mi t t ed t o a Sa fe Ha rbor
prog ra m,
i t i s a ssumed
t o be i n
c ompl i a nc e.
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All use subject to JSTOR Terms and Conditions
Journa l of P ubl i c
P ol i c y
&
Ma rket i ng
13
a mong
new members of t h e Di rec t
Ma rket i ng
Assoc i a t i on
a nd
quest i on
c onsumers'
a bi l i t y
t o
opt -out , a rg ui ng
t h a t l i t -
t l e
prev ent s
members or nonmembers from
a c c essi ng
t h e
i nforma t i on c ont a i ned i n t h a t d a t a ba se
(Jones 1991;
Rot enberg 1998).
Confl i c t i ng
d a t a ov er
c ompl i a nc e
t o FTC
reg ul a t ory
st a n-
d a rd s exi st . Th e FTC
report s
l ow
c ompl i a nc e:
O f t h e 1400
si t es i t h a s
a na l y zed ,
92% of t h e c ommerc i a l si t es c ol l ec t
persona l
d a t a , y et onl y
14%
prov i d e
not i c e of i nforma t i on
c ol l ec t i on
pra c t i c es,
t h e most ba si c of i t s
pri v a c y pri nc i pl es
(FTC 1998).
Anot h er
surv ey
fi nd s t h a t
onl y
h a l f of a l l Web
si t es
surv ey ed prov i d e
i nforma t i on (a nd onl y
10% meet
FTC
st a nd a rd s)
on c ol l ec t i on a nd use
pra c t i c es.
Howev er,
a
t h i rd
st ud y
i nd i c a t es 94% of t h e
t op
100 Web si t es i n c om-
pl i a nc e
wi t h d i sc l osure st a nd a rd s
(Wi g fi el d
1999a , b).
Th e
Georg et own
I nt ernet
P ri v a c y P ol i c y Surv ey (1999),
a
rec ent l y
c ond uc t ed
prog ress report
t o t h e
FTC,
fi nd s t h a t t h e
ma jori t y
of Web si t es v i si t ed
(93.4%)
c ol l ec t ei t h er
persona l
i d ent i fy i ng
or
d emog ra ph i c
i nforma t i on from c onsumers. At
l ea st one
t y pe
of
pri v a c y
d i sc l osure st a t ement
(ei t h er
a
pri -
v a c y pol i c y
not i c e or a n i nforma t i on
pra c t i c e st a t ement )
i s
post ed
on 65.9% of t h e
sa mpl e
Web si t es. Th e
ma jori t y
of
Web si t es t h a t c ol l ec t c onsumer i nforma t i on a nd
post
a
pri -
v a c y
d i sc l osure i nc l ud e a t l ea st one
surv ey
i t em for not i c e
(89.8%),
more t h a n h a l f i nc l ud e a
surv ey
i t em for c h oi c e
(61.9%),
a nd l ess t h a n h a l f i nc l ud e a
surv ey
i t em for sec u-
ri t y (45.8%)
a nd c ont a c t i nforma t i on (48.7%).
E v en wi t h t h e d i sc l osure of
pri v a c y
st a t ement s,
c onfusi on
c a n a ri se from t h e
v a g ue
a nd oft en
a mbi g uous
na t ure of some
of t h em. For
exa mpl e,
t h e Di rec t
Ma rket i ng
Assoc i a t i on's
pri v a c y
st a t ement on i t s Web si t e d oes not a d d ress i t s
pol i c y
for
c ol l ec t i ng t ra c ki ng
i nforma t i on a nd i s unc l ea r a bout t h e
use of t h i s
i nforma t i on.
I t s
pol i c y
st a t es,
"t h e
i nforma t i on
we
c ol l ec t i s used t o
i mprov e
t h e c ont ent of our Web
pa g e
a nd t o
c ont a c t c ust omers for
ma rket i ng purposes," t h oug h
"ma rket -
i ng purposes"
i s not furt h er
expl a i ned .
Consumers' l a c k of
knowl ed g e
a nd c ont rol of wh a t
h a ppens
t o t h ei r
persona l
i nforma t i on i s a sec ond c onc ern. Th e
d y na mi c
na t ure of i nforma t i on
c ol l ec t i on a nd
ma ni pul a t i on
d ec rea ses
c onsumers'
a bi l i t y
t o
keep
t ra c k of t h ei r i nforma t i on a s i t i s
c ol l ec t ed a nd
a g g reg a t ed
from
mul t i pl e
sourc es t o c rea t e c on-
sumer
profi l es. Al t h oug h
some of t h ese d a t a a re
prov i d ed by
c onsumers
(e.g ., d emog ra ph i c i nforma t i on),
ot h er i nforma t i on
i s c ol l ec t ed wi t h out c onsumer
knowl ed g e,
suc h a s
t ra c ki ng
i nforma t i on
obt a i ned
t h roug h
Web si t e
surfi ng
beh a v i or.
Th us,
c onsumers c ont rol
onl y
a
port i on
of t h ei r own
profi l es.
P ri v a c y
a d v oc a t es wa rn t h a t c onsumers'
neg a t i v e perc ep-
t i ons resul t i ng from t h i s l a c k of c ont rol ma y a c t
a s a
d et er-
rent t o t h e c ommerc i a l suc c ess of t h e I nt ernet . A
st ud y
c on-
d uc t ed ov er t h e I nt ernet
by Georg i a
Tec h fi nd s t h a t pri v a c y
i s t h e most i mport a nt i ssue fa c i ng t h e I nt ernet (Ka nt or
1998). A Busi nessWeek surv ey fi nd s t h a t peopl e
wh o d o not
use t h e I nt ernet c i t e
pri v a c y
of t h ei r
persona l
i nforma t i on a s
t h e pri ma ry rea son (FTC 1998; O bernd orf 1998; Rot enberg
1998). Th i s l a c k of c onfi d enc e pa ra l l el s
c onsumers' perc ep-
t i ons a bout t h e d i rec t
ma rket i ng i nd ust ry .
A few
y ea rs a g o,
t h e ed i t ori a l d i rec t or of Ta rg et Ma rket i ng , c i t i ng
a "l a c k of
respec t
on t h e
pa rt
of d i rec t ma rket ers" for c onsumers,
pl ea d ed
wi t h ma rket ers t o c onsi d er t h e effec t of t h ei r a c t i ons
i n t h e
l ong run, i n t erms of bot h c onsumer d i si l l usi onment
a nd possi bl e g ov ernment i nt erv ent i on (Jones 1991). A si m-
i l a r
d i sreg a rd
i s somet i mes
expressed by
onl i ne busi nesses
i n word s a nd a c t i ons. For
exa mpl e,
Sun
Mi c rosy st ems
c h i ef
exec ut i v e offi c er Sc ot t
Mc Nea l y g l i bl y
st a t ed ,
"You
a l rea d y
h a v e zero
pri v a c y .
Get ov er i t "
(Ba i g , St epa nek,
a nd Gross
1999, p. 84).
Unresol v ed I ssues
Wh a t i s known a bout
pri v a c y
on t h e I nt ernet i s t h a t c onsumers
a ppea r
c onc erned a bout t h rea t s t o t h ei r onl i ne
pri v a c y ,
a nd
ma ny c ompa ni es
h a v e been sl ow t o
respond .
At i ssue i s t h e
perc ei v ed ownersh i p
of c onsumer i nforma t i on.
Compa ni es'
a c t i ons
sug g est
t h a t t h e
i nforma t i on,
ei t h er
a c qui red
a s
pa rt
of
a t ra nsa c t i on or
purc h a sed
from ot h er
sourc es, bel ong s
t o
t h em. As d i sc ussed
prev i ousl y ,
resea rc h h a s sh own a l a c k of
v ol unt a ry c ompl i a nc e
t o ev en t h e most ba si c of t h e FTC's
P ri nc i pl es-t h e ri g h t
of c onsumers t o be
g i v en
not i c e of a n
ent i t y 's pri v a c y pra c t i c es (FTC 1998).
Th e a bsenc e of c om-
preh ensi v e pol i c i es
i s
pa rt i c ul a rl y t roubl i ng ,
bec a use c on-
sumers d o not
a l wa y s
und erst a nd t h a t
c ompl et e
d i sc l osure h a s
not been i nc l ud ed i n a
pri v a c y
st a t ement . Th i s mi ni ma l i st
a pproa c h
c a n be seen i n t h e DMA's
pri v a c y
st a t ement ,
wh i c h
out l i nes i t s
pra c t i c es forjust
one subset of i nforma t i on c ol l ec -
t i on a nd use. A Web si t e's c ol l ec t i on of i nforma t i on
t h roug h
t h e use of c ooki es i s i n obv i ous v i ol a t i on of t h e not i c e/a wa re-
ness
pri nc i pl e,
bec a use t h e
ma jori t y
of c onsumers d o not
know t h e "na t ure of t h e d a t a c ol l ec t ed a nd t h e mea ns
by
wh i c h
i t i s c ol l ec t ed "
(FTC 1998, p. 8). Furt h ermore,
c onsumers a re
not
g i v en
t h e
opt i on
t o refuse t o
pa rt i c i pa t e,
bec a use i t i s t h ei r
rea l -t i me beh a v i or t h a t i s
bei ng
c ol l ec t ed .
A c onsumer's
i na bi l i t y
t o d ec i d e wh et h er t o
proc eed sug -
g est s
a n
a sy mmet ri c a l rel a t i onsh i p
i n wh i c h t h e ma rket er
benefi t s a t a c ost t o t h e
c onsumer, t h oug h
some
mi g h t a rg ue
t h a t c onsumers wi l l benefi t
t h roug h t a rg et ed prod uc t s
a nd
serv i c es i n t h e
l ong
run.
Th us,
wh a t
t h ey
d o not know wi l l not
h urt t h em i n t h e sh ort run. Th i s
a sy mmet ri c a l rel a t i onsh i p
i s
furt h er exa c erba t ed
by
t h e l a c k of a
mut ua l l y
benefi c i a l c om-
pensa t i on
st ruc t ure. Tra d i t i ona l i nforma t i on c ol l ec t i on met h -
od s
prov i d e
a
pa y ment ,
a n i nc ent i v e t o ent i c e
respond ent s
t o
pa rt i c i pa t e,
a nd a l l ow t h ose wh o d o not wa nt t o
pa rt i c i pa t e
t o
d rop
out . Si mi l a r i s t h e
proc ess
of
eng a g i ng
i n a t ra nsa c t i on
wi t h a ma rket er. Consumers
pa rt i c i pa t e onl y
wi t h ma rket ers
t h ey perc ei v e
a s
prov i d i ng
v a l ue.
Th us,
i n bot h t h ese sc ena r-
i os,
t h e c onsumer ent ers i nt o a t ra nsa c t i on i n t h e sh ort
run,
a nd
possi bl y
t h e
l ong run,
i f t h e
a rra ng ement
i s
mut ua l l y
ben-
efi c i a l . We
sug g est
t h a t i t i s t h e c onsumer's
knowl ed g ea bl e
pa rt i c i pa t i on
i n t h e
ma rket i ng a c t i v i t y
t h a t
sepa ra t es
t ra d i -
t i ona l i nforma t i on c ol l ec t i on met h od s from t h ose used onl i ne.
Two of t h ese onl i ne a c t i v i t i es wa rra nt furt h er d i sc ussi on.
Th e fi rst i ssue i nv ol v es t h e c ol l ec t i on a nd use of c onsumers'
i nforma t i on. Col l ec t i ng a g g reg a t e d a t a on c onsumer Web
si t e
surfi ng beh a v i or, i n i sol a t i on, i s of neg l i g i bl e
h a rm t o
t h ose
bei ng
t ra c ked bec a use of t h e
seemi ng l y
i nnoc uous
na t ure of t h e use of t h e i nforma t i on-for
exa mpl e,
t o
d esi g n
Web si t es bet t er or
prov i d e
a d v ert i sement s
t a rg et ed
more
a c c ura t el y
a t users. E v en t h e c ol l ec t i on of t ra nsa c t i ona l d a t a
i s
t h oug h t
t o be benefi c i a l -for
exa mpl e,
wh en
rev i si t i ng
Ama zon.c om, a v i si t or
g et s
a
sug g est ed
l i st of books ba sed
on
prev i ous purc h a ses.
Just i fi c a t i on of t h ese a c t i v i t i es
c omes
l a rg el y
from t h e use of a ut i l i t a ri a n
a rg ument :
Th e
use of t h i s i nforma t i on i n t h e c ont ext of
ma rket i ng prov i d es
bet t er
g ood s
a nd serv i c es t o t h e
c ommuni t y a s a wh ol e a nd
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14 Consumer O nl i ne
P ri v a c y
t h us
just i fi es
t h e mi nor i nc onv eni enc es t h a t some
ma y
suf-
fer
(Foxma n
a nd
Ki l c oy ne 1993).
Th e
quest i on
i s not a bout wh a t i s
bei ng
c ol l ec t ed or ev en
h ow t h e d a t a a re c ol l ec t ed but t h e
knowl ed g e
a nd c ont rol of
t h e
pa rt i c i pa nt s
i n t h ose a c t i v i t i es. Ameri c a 's
l a rg est
ret a i l er, Wa l -Ma rt ,
wh i c h h a s a c ust omer d a t a ba se sec ond
onl y
t o t h e fed era l
g ov ernment , c ont i nuousl y
c ol l ec t s i nfor-
ma t i on on i t s c ust omers'
purc h a si ng
beh a v i or
(Nel son
1998).
Th e d i fferenc e i s t h a t c onsumers
st a y
i n t h e
a g g re-
g a t e
a t
Wa l -Ma rt ,
a nd i nd i v i d ua l c onsumers c a n sel f-sel ec t
(i .e., opt i n)
d a t a c ol l ec t i on a c t i v i t i es a t t h e c h ec kout c ount er
i f t h e offered i nc ent i v e i s of suffi c i ent v a l ue.
Th us,
c on-
sumers ma i nt a i n c ont rol .
A sec ond
i ssue, t h en,
i s v a l ue t o t h e c onsumer.
Al t h oug h
some onl i ne a c t i v i t i es
requi re opt i ng
i n
(e.g .,
c onsumers
knowi ng l y
t ra d e
a wa y
i nforma t i on for c onv eni enc e a nd
sel ec t i on wh en
t h ey prov i d e
c red i t c a rd
numbers),
ot h er
t ra d e-offs a re not so obv i ous. Consumers h a v e l i mi t ed
knowl ed g e,
for
exa mpl e,
wh en t h ei r
surfi ng
beh a v i or i s c ol -
l ec t ed a nd l i mi t ed c ont rol wh en t h ese
surfi ng
d a t a a re l i nked
t o t ra nsa c t i ona l a nd
d emog ra ph i c
d a t a . Sev era l
quest i ons
a ri se. Wh a t i s t h e v a l ue d eri v ed
by
c onsumers i n t h ese
t y pes
of a c t i v i t i es? I s t h e v a l ue l i mi t ed or i s t h ere some v a l ue
g a i ned
from c onsumers' i nforma t i on
bei ng
c ol l ec t ed a nd
used ? I f t h ere i s some v a l ue-for
exa mpl e,
bet t er Web
si t es-i s t h e v a l ue c ommensura t e wi t h t h a t obt a i ned
by
t h e
ma rket er t h a t c ol l ec t s a nd uses t h a t i nforma t i on? I f no v a l ue
i s obt a i ned from t h e
a c t i v i t y -t h a t
i s,
a t t h e
mi ni mum,
a d i s-
c ount or a
c oupon-i s
t h e ma rket er
t a ki ng equi t y
from t h e
rel a t i onsh i p,
a nd a t wh a t
poi nt
wi l l t h e c onsumer bec ome
frust ra t ed
enoug h
t o d ec i d e not t o
pa rt i c i pa t e?
I nforma t i on
obt a i ned
by
ma rket ers wi t h out
prov i d i ng equi v a l ent
v a l ue t o
c ust omers a nd t h e
subsequent feel i ng
of a l oss of c ont rol
by
t h ese c ust omers
sug g est
a fut ure
poi nt
a t wh i c h c onsumers
ma y
d ema nd ret ri but i on, t h roug h
ei t h er
g ov ernment
a c t i on
or
boy c ot t .
Th e
Spec i a l
Ca se of Ch i l d ren
Th e Ch i l d ren's O nl i ne
P ri v a c y
P rot ec t i on Ac t
(CO P P A; 112
St a t .
2681)
wa s
pa ssed
i n O c t ober 1998 bec a use of c onc erns
reg a rd i ng
onl i ne
ma rket i ng pra c t i c es
a i med a t c h i l d ren.6
FTC resea rc h i n June 1998 found l ow
i nd ust ry c ompl i a nc e
wi t h i t s Fa i r P ra c t i c e
P ri nc i pl es,
suc h a s t h e i nc l usi on of
i nforma t i on
pra c t i c e
st a t ement s
(e.g ., "Ki d s, g et y our pa r-
ent s'
permi ssi on
before
y ou g i v e
out i nforma t i on
onl i ne")
a nd
pri v a c y
not i c es a s wel l a s
pa rent a l
not i fi c a t i on. Th i s
report
a l so i nd i c a t ed t h a t i nforma t i on suc h a s a g e/bi rt h d a t e,
sex, h obbi es, i nt erest s, a nd h a rd wa re/soft wa re ownersh i p
wa s c ol l ec t ed more from c h i l d ren t h a n from a d ul t s. A
pa r-
t i c ul a r c onc ern wi t h t h ese fi nd i ng s
i s t h e l i mi t ed
c og ni t i v e
a bi l i t i es of c h i l d ren, wh i c h
sug g est s
t h a t
t h ey ma y
be more
mot i v a t ed by
t h e i nc ent i v es i nt end ed t o g et t h ei r i nforma t i on
(e.g ., post c a rd s, freebi es) t h a n by t h e i nforma t i on prov i d ed
i n t h e pri v a c y st a t ement .
Al t h oug h
CO P P A
proh i bi t s
t h e c ol l ec t i on of
persona l l y
i d ent i fi a bl e i nforma t i on for c h i l d ren 13 y ea rs
of
a g e
a nd
y oung er
from Web si t es unl ess t h e c h i l d ren obt a i n v eri fi -
a bl e
permi ssi on
from t h ei r
pa rent s (Hec kma n 1998),
quest i ons
a ri se a bout i t s
a bi l i t y
t o
prot ec t
a nd a bout wh a t
i s t o be
prot ec t ed .
Unc l ea r i s t h e d efi ni t i on of "i nforma -
t i on"-Does i t i nc l ud e i nforma t i on
prov i d ed by
c h i l d ren,
or d oes i t a l so i nc l ud e t h e c ol l ec t i on a nd use of a l l t h ei r
persona l
a nd beh a v i ora l d a t a ? Al so
quest i oned
i s t h e d i f-
fi c ul t y
of
v eri fy i ng
t h e c h i l d 's
a g e
a nd
pa rent a l c onsent ,
a s wel l a s t h e FTC's l i mi t ed
a bi l i t y
t o enforc e t h ese
requi rement s.
Th e fi na l rul es for CO P P A were out l i ned
by
t h e FTC i n
O c t ober
1999,
wh i c h furt h er
st reng t h ened
t h e onl i ne
pri v a c y
of c h i l d ren
(Ch i l d ren's
O nl i ne
P ri v a c y
P rot ec t i on Rul e
1999).
Th ese
rul es,
effec t i v e
Apri l
21, 2000,
requi re opera -
t ors of Web si t es
t a rg et i ng
c h i l d ren und er 13
y ea rs
of
a g e
t o
(1) post promi nent
l i nks on t h ei r si t es t o not i c es
out l i ni ng
t h e
c ol l ec t i on, use,
a nd /or d i sc l osure
pra c t i c es i nv ol v i ng
persona l
i nforma t i on; (2) not i fy pa rent s
a bout c ol l ec t i on
pra c t i c es
a nd obt a i n t h ei r c onsent before i nforma t i on c ol l ec -
t i on, use,
a nd /or d i sc l osure; (3)
c ea se t h e
pra c t i c e
of
l i nki ng
c h i l d ren's
pa rt i c i pa t i on
i n onl i ne a c t i v i t i es t o t h e c ol l ec t i on
of a d d i t i ona l
persona l
i nforma t i on; (4)
a l l ow
pa rent s
t h e
opport uni t y
t o rev i ew i nforma t i on on t h ei r
c h i l d ren, d el et e
t h i s i nforma t i on from d a t a ba ses i f
d esi red ,
a nd
proh i bi t
fur-
t h er c ol l ec t i on of
i nforma t i on;
a nd
(5)
formul a t e
proc ed ures
t o
prot ec t
t h e
c onfi d ent i a l i t y , sec uri t y ,
a nd
i nt eg ri t y
of
per-
sona l i nforma t i on.
E t h i c a l Th eori es a nd O nl i ne
P ri v a c y
Th e
i mport a nc e
of ma rket er
responsi bi l i t y
i n a t ra nsa c t i on
i s not
onl y
t o
c ompl et e
t h i s
pa rt i c ul a r exc h a ng e
but a l so
t o ensure fut ure
exc h a ng es
t h a t wi l l bui l d i nt o a rel a t i on-
sh i p. Cesped es
a nd Smi t h
(1993, p. 9)
st a t e t h a t
c ompa -
ni es c a nnot a fford t o wa st e resourc es on
ma rket i ng
a c t i v -
i t i es t h a t
"a nnoy
or a l i ena t e
pot ent i a l
c ust omers."
Consumers c ont i nue t o v i si t a
pa rt i c ul a r
busi ness bec a use
of t h e
perc ept i on
of
t rust ,
t h a t
i s,
t h a t t h e
c ompa ny
h a s
t h ei r best i nt erest s i n mi nd wh en
prov i d i ng
a
prod uc t
a nd /or serv i c e. We d i sc uss sev era l et h i c a l t h eori es a s
v eh i c l es t o
st reng t h en
t h e bond of t rust bet ween ma rket er
a nd c ust omer.
Soc i a l c ont ra c t
t h eory sug g est s
t h a t a
rec i proc a l
rel a -
t i onsh i p
exi st s
a mong
t h ose i nv ol v ed i n a n
exc h a ng e
(Dunfee, Smi t h ,
a nd Ross
1999).
At a
h i g h er
soc i et a l
l ev el ,
a soc i a l c ont ra c t
mi g h t
i nv ol v e t h e
a d v a nt a g es
offered
by
a fi rm "t o
soc i et y -i t s
c ust omers a nd
empl oy -
ees-i n
exc h a ng e
for t h e
ri g h t
t o exi st a nd ev en prosper"
(Dunfee, Smi t h , a nd Ross 1999, p. 17). Th i s t h eory i s pa r-
t i c ul a rl y i mport a nt
t o
ma rket i ng ,
i n wh i c h t ra nsa c t i ons a re
ba sed on ea c h pa rt y bel i ev i ng
t h a t v a l ue h a s been
obt a i ned . Wh en a ppl i ed
t o d i rec t ma rket i ng ,
soc i a l c on-
t ra c t s a re formed wh en c onsumers prov i d e
i nforma t i on t o
ma rket ers for t h e benefi t of
rec ei v i ng t a rg et ed
offers
(Mi l ne a nd Gord on 1993). A soc i a l c ont ra c t i s i ni t i a t ed ,
t h erefore, wh en t h ere a re expec t a t i ons
of soc i a l norms
(i .e., g enera l l y und erst ood obl i g a t i ons)
t h a t
g ov ern
t h e
beh a v i or of t h ose i nv ol v ed .
Soc i a l c ont ra c t t h eory a ppl i es
t o t h e I nt ernet for t h e sa me
rea sons sug g est ed
for d i rec t ma rket i ng :
Consumers opt
i n t o
a pa rt i c ul a r a c t i v i t y
from wh i c h t h ey perc ei v e fut ure i nfor-
ma t i on st rea ms wi l l be of v a l ue. Th e t ra nsa c t i on oc c urs
6Th e CO P P A sh oul d not be c onfused wi t h t h e Ch i l d O nl i ne P rot ec t i on
Ac t t h a t ma kes c ommerc i a l Web si t es
c ri mi na l l y
l i a bl e i f mi nors h a v e
a c c ess t o obsc ene or i nd ec ent ma t eri a l
(Ra y sma n
a nd Brown 1998).
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All use subject to JSTOR Terms and Conditions
Journa l of P ubl i c
P ol i c y
&
Ma rket i ng
15
wh en a c onsumer
prov i d es
i nforma t i on t o a n
org a ni za t i on
a nd t h e ma rket er i n t urn offers a n i nc ent i v e t o t h e c onsumer;
bot h of t h ese a c t i ons a re i ni t i a t ed a ft er a n ev a l ua t i on of t h e
spec i fi c s
of t h a t
pa rt i c ul a r
c ont ra c t .
I mpl i ed
h ere i s t h e
pres-
enc e of t wo
pa rt i es
i n t h e t ra nsa c t i on i n wh i c h i nforma t i on
i s
exc h a ng ed
for t h e
promi se
of some
benefi t ,
wh et h er
pre-
sent or fut ure. O ne
g enera l l y
und erst ood
obl i g a t i on a c c rui ng
from
ent eri ng
i nt o t h i s soc i a l c ont ra c t i s t h a t bot h
pa rt i es
und erst a nd t h e ri sks i nv ol v ed a s wel l a s t h e ret urns. Th us,
t h e
c onsumer,
i n
c ond uc t i ng
a c ost -benefi t
a na l y si s,
ent ers
i nt o a n
exc h a ng e
t h a t
prov i d es posi t i v el y perc ei v ed
benefi t s,
wh i c h
ma y
not be
und ul y
a ffec t ed
by pri v a c y
c onc erns.
Consumers,
i nst ea d of
fol l owi ng
a n a bsol ut e
ph i l osoph y
of
"I wa nt t o be l eft
a l one,"
a s
pri v a c y
a d v oc a t es c ont end ,
mi g h t just
wa nt
"prot ec t i on a g a i nst
unwa rra nt ed uses of
per-
sona l i nforma t i on wi t h mi ni ma l
d a ma g e" (Cesped es
a nd
Smi t h
1993, p. 8).
Dut y -ba sed t h eory
i nc l ud es t h ree
c a t eg ori es
of
obl i g a -
t i ons.
Fi rst ,
t h e
d ut y
of
fi d el i t y (L a c zni a k
a nd
Murph y 1993)
requi res c ompa ni es
t o t el l t h e t rut h a nd red ress
wrong ful
a c t s wi t h out
d el a y .
I t ena bl es
c ompa ni es
t o bui l d a bond
wi t h t h ei r
c ust omers,
wh o t h en c ome t o a ssoc i a t e t h ese c om-
pa ni es
wi t h et h i c a l
beh a v i or,
wh i c h most
l i kel y
resul t s i n
posi t i v e
word of mout h a nd
repea t
busi ness. Muc h of t h e
prev i ous
d i sc ussi on
reg a rd i ng
onl i ne
reg ul a t ory
st a nd a rd s
i nv ol v es t h e
quest i on
of h ow muc h a
c ompa ny
must d i sc l ose
of i t s
pra c t i c es.
Th e rec ent
meet i ng reg a rd i ng
onl i ne
profi l -
i ng sponsored by
t h e
FTC
a ppea rs
t o be a n i nd i c a t or t h a t
c ompa ni es
i n t h e
i nd ust ry
a re now
a c c ept i ng
t h i s
d ut y .
Sec ond ,
t h e
d ut y
of benefi c enc e i s t h e
obl i g a t i on
t o d o
g ood .
I n t h e c ont ext of onl i ne
ma rket i ng , c ompa ni es
woul d
not t ra c k t h e beh a v i or of t h ei r c ust omers bec a use of t h ei r
d ut y
t o d o
ri g h t by
t h ese c ust omers. Th i s
d ut y mi g h t
a l so
i nc l ud e
prov i d i ng
a
c ompl et e
d i sc l osure of i nforma t i on c ol -
l ec t i on a nd use a nd t o
prov i d e
a n
opt -i n
ra t h er t h a n a n
opt -
out
sy st em.
I n t h i s
sy st em,
ma rket ers woul d t ra c k
onl y
t h ose
onl i ne c onsumers wh o were
wi l l i ng
t o
pa rt i c i pa t e.
A t h i rd
d ut y
i nv ol v es t h a t of
nonma l efi c enc e,
t h e
d ut y
not
t o
i njure
ot h ers. Th i s
d ut y
c ov ers t h e FTC's Fa i r
I nforma t i on P ra c t i c e
P ri nc i pl e
of
i nt eg ri t y /sec uri t y . By
i nst i t ut i ng
mea sures t h a t ma i nt a i n t h e
sec uri t y
a nd
i nt eg ri t y
of c onsumers'
i nforma t i on,
ma rket ers ensure t h a t t h ese c on-
sumers a re sa fe from h a rm t o t h ei r fi na nc i a l st a t e or ev en t o
t h ei r
persona l reput a t i ons,
t h us
mi t i g a t i ng
c onsumers' rel uc -
t a nc e t o
pa rt i c i pa t e
i n I nt ernet a c t i v i t i es.
St a keh ol d er
t h eory post ul a t es
t h a t t h ose wh o h a v e a n
i nt erest i n or a re a ffec t ed by a n org a ni za t i on h a v e a st a ke
i n i t s d ec i si ons (Dona l d son a nd P rest on 1995; Good pa st er
1991). Th e ri g h t s of st a keh ol d ers reg a rd i ng org a ni za t i ona l
pri v a c y
h a v e been exa mi ned by St one a nd St one-Romero
(1998). I n t h e c ont ext of onl i ne
ma rket i ng ,
t h e st a keh ol d -
ers i nc l ud e t h e
org a ni za t i on i t sel f, a s wel l a s c onsumers,
pri v a c y a d v oc a t es, sel f-reg ul a t i on a d v oc a t es, t h e g ov ern-
ment , a nd , fi na l l y , c y ber (a s opposed
t o
a ny na t i ona l ) soc i -
et y , wh ose norms
g ov ern expec t a t i ons
of t h e
ri g h t
t o
pri -
v a c y . For t h e pri ma ry st a keh ol d ers, c ust omers v a l ue some
d eg ree
of
pri v a c y
a nd
expec t t rust i n t h e t ra nsa c t i on,
wh erea s some
c ompa ni es pl a c e
t h e
g rea t est
v a l ue on
sh ort -t erm
profi t g enera t i on.
Th e
ri g h t s
of t h e sec ond a ry
st a keh ol d ers a l so c onfl i c t wi t h t h e need s of a d v oc a c y
g roups, t h e g ov ernment , a nd soc i et a l a t t i t ud es i n
d i sa g ree-
ment ov er t h e
d eg ree
of
pri v a c y
a c c ord ed ,
a l l of wh i c h
wi l l a ffec t t h e beh a v i or of bot h st a keh ol d ers a nd
g ov ern-
ment .
Th us,
fa i rness
d ea l i ng
wi t h t h e t ra d e-offs
a mong
t h ese oft en
c onfl i c t i ng ri g h t s
wi l l be
i mport a nt
t o I nt ernet
suc c ess.
Vi rt ue et h i c s i s a not h er et h i c a l
t h eory
rel ev a nt t o onl i ne
c onsumer
pri v a c y . Al t h oug h
v i rt ue et h i c s
possess
sev era l
c h a ra c t eri st i c s
(Murph y 1999),
t h e one most rel ev a nt for
onl i ne ma rket ers i s t h e "et h i c of t h e
mea n,"
wh i c h st a t es t h a t
ba l a nc e i s a n
objec t i v e
i n
a ny rel a t i onsh i p--exc ess
i s t o be
a v oi d ed .
Ari st ot l e,
one of t h e ea rl i est
proponent s
of v i rt ue
et h i c s,
i nd i c a t ed t h a t
d ec ept i on
i s t h e
d efi c i enc y
of
t rut h ,
wh erea s boa st ful ness
represent s
t h e exc ess of t rut h . A v i rt u-
ous
posi t i on
i s one t h a t st ri v es for mi d d l e
g round .
As
pre-
sc ri bed
by
soc i a l c ont ra c t a nd st a keh ol d er t h eori es, ma r-
ket ers, publ i c pol i c y ma kers,
a nd c onsumers must st ri v e for
t h i s d el i c a t e ba l a nc e
a mong ma rket i ng g oa l s,
c onsumer
pri -
v a c y ,
a nd t h e
publ i c g ood . P ri v a c y
a d v oc a t es a nd some
c ompa ni es
a re
t a ki ng
ext reme a nd a d v ersa ri a l
posi t i ons
wi t h out
rec og ni zi ng
t h e
i mport a nc e
of ba l a nc e. I ni t i a l
posi -
t i v e
st eps
h a v e been ma d e wi t h
CO P P A,
t h e I BM a d v ert i s-
i ng i ni t i a t i v e,
a nd
t h i rd -pa rt y
i nt erv ent i ons.
I n t h e i nt erna t i ona l
a rena , a ppl y i ng
v i rt ue et h i c s t o
onl i ne
pri v a c y
i s d i ffi c ul t . Th e E U h a s t a ken a
st rong er
st a nc e t h a n t h e Uni t ed St a t es i n
prot ec t i ng
c onsumer
pri -
v a c y ;
one c omment a t or i nd i c a t ed t h a t t h e Uni t ed St a t es
sh oul d "c onsi d er
i mport i ng E urope's
more ev ol v ed a nd
ba l a nc ed
c onc ept i on
of
pri v a c y " (Kut t ner 1998, p. 22).
Yet a
c ompromi se
must be rea c h ed bet ween t h e E U a nd
t h e Uni t ed St a t es i f t h ere a re t o be v i a bl e rul es for
g l oba l
c ommerc e.
Th e
power-responsi bi l i t y equi l i bri um
mod el
(L a c zni a k
a nd
Murph y 1993) mi g h t sh ed some l i g h t on t h ese
quest i ons
for t h e
pa rt i c i pa nt s
i n a n onl i ne
ma rket i ng
t ra nsa c t i on.
P ower a nd
responsi bi l i t y
sh oul d be i n
equi l i bri um-
wh i c h ev er
pa rt ner
i n a
rel a t i onsh i p
h a s more
power
a l so h a s
t h e
responsi bi l i t y
t o ensure a n env i ronment of t rust a nd c on-
fi d enc e.
Ac c ord i ng
t o t h e
mod el ,
i f a
c ompa ny
c h ooses a
st ra t eg y
of
g rea t er power
a nd l ess
responsi bi l i t y ,
i t
mi g h t
benefi t i n t h e sh ort run
(t h oug h
t h e c onsumer wi t h l ess
power
wi l l not
benefi t ); h owev er,
t h a t
c ompa ny
wi l l l ose
power
i n t h e
l ong
run
(e.g .,
i nc rea sed
g ov ernment reg ul a -
t i on).
I n
c ont ra st ,
a
c ompa ny
i n ba l a nc e wi t h i t s c ust omers
sh oul d benefi t bot h i n t h e sh ort run a nd t h e
l ong
run. Wh en
l a rg e c ompa ni es requi re
Web si t es t o
post
a
pri v a c y
st a t e-
ment ,
t h i s a c t i on
represent s
a
g ood exa mpl e
of a
c ompa ny
wi t h
g rea t er power a c c ept i ng i t s responsi bi l i t y .7
Fut ure
P ol i c y
Di rec t i ons
Al t h oug h i t seems
prema t ure
a t t h i s
poi nt
t o offer d efi ni t i v e
d i rec t i ons
reg a rd i ng
c onsumer onl i ne
pri v a c y ,
bot h Web
ma rket ers a nd
publ i c pol i c y
offi c i a l s sh oul d c onsi d er sev -
era l a l t erna t i v e
possi bi l i t i es. Fi g ure
3
d epi c t s
ea c h of t h e
pol i c y proposa l s
exa mi ned h ere on a n et h i c a l
responsi bi l i t y
c ont i nuum. Th e v a ri ous et h i c a l t h eori es d i sc ussed prev i -
7Al t h oug h
Mi c rosoft h a s c ome und er c ri t i c i sm i n t h e
pa st
for i t s l a c k of
emph a si s
on
pri v a c y ma t t ers,
t h e
c ompa ny
h a s a ssumed
g rea t er responsi -
bi l i t y rec ent l y .
I n June 1999, i t
put
i n
pl a c e
a
pol i c y
si mi l a r t o I BM's a nd
h a s i nc l ud ed i t s
pri v a c y
a c t i v i t i es on t h e
c ompa ny
Web
pa g e.
This content downloaded from 203.217.177.216 on Wed, 6 Aug 2014 22:44:19 PM
All use subject to JSTOR Terms and Conditions
16 Consumer O nl i ne
P ri v a c y
Fi g ure
3. E t h i c a l
Responsi bi l i t y
Cont i nuum
Busi ness O ri ent a t i on --- Soc i et a l O ri ent a t i on
Corpora t e Corpora t e
U.S. E U
Busi ness E t h i c a l P ubl i c P ubl i c
Th eori es
P ol i c y P ol i c y P ol i c y P ol i c y
Ma na g eri a l
eg oi sma
X
Ut i l i t a ri a ni smb X X
St a keh ol d er
t h eory c X X X
Vi rt ue et h i c sd X X
I nt eg ra t i v e
soc i a l
c ont ra c t s
t h eory e
X X
Dut y -ba sed
t h eori esf X X
P ower a nd
responsi bi l i t y g
X X X X
a Ma na g eri a l eg oi sm:
E xec ut i v es t a ke
st eps
t h a t most
effi c i ent l y
a d v a nc e
t h e exc l usi v e sel f-i nt erest of t h emsel v es or t h ei r fi rm. Th e X i s
pl a c ed
und er
c orpora t e
busi ness
pol i c y
bec a use t h e sol e mot i v a t i on i s t o furt h er
t h e fi rm; t ra d e-off i nc ent i v es a re offered for t h e
purpose
of
obt a i ni ng
c on-
sumer i nforma t i on t h a t i s v i ewed a s t h e
propert y
of t h a t
c ompa ny .
bUt i l i t a ri a ni sm:
Corpora t e
c ond uc t i s
proper
i f a d ec i si on resul t s i n t h e
g rea t est g ood
for t h e
g rea t est
number of
peopl e. Sel f-reg ul a t ory
a d v oc a t es
ma i nt a i n t h a t c onsumers a re not h urt
by c orpora t i ons'
c ol l ec t i on a nd use
of
persona l
i nforma t i on but a re
a nnoy ed (t h e
c ost s a re
l ow); furt h ermore,
t h e i nforma t i on a l l ows for a wi d e a ssort ment of
prod uc t
c h oi c e
(benefi t s
a re g rea t ).
c St a keh ol d er t h eory : O rg a ni za t i ons
a ffec t a nd a re a ffec t ed
by
sev era l st a ke-
h ol d er
g roups.
O n t h e c ont i nuum, t h i s
t h eory ra ng es
from
c orpora t e
busi -
ness
pol i c y ,
bec a use of t h e effec t of
c orpora t e
a c t i ons on c onsumers
(e.g .,
i nc ent i v e t ra d e-offs),
t o
c orpora t e
et h i c a l
pol i c y ,
bec a use of t h e
posi t i v e
i nfl uenc e of
pri v a c y
st a t ement s a nd
pri v a c y
a ud i t s on
ma ny st a keh ol d ers,
t o
publ i c pol i c y ,
bec a use
g ov ernment
a nd
soc i et y
a re seen a s
i mport a nt
st a keh ol d ers.
d Vi rt ue et h i c s: Ba l a nc e i n t h e
rel a t i onsh i p
bet ween t h e onl i ne ma rket er a nd
t h e c onsumer sh oul d be a c h i ev ed for t h e ma rket
sy st em
t o work effec -
t i v el y . Th us, c orpora t i ons
a nd
publ i c pol i c y ma kers
need t o mov e t owa rd
t h e et h i c of t h e mea n i n t h e
pri v a c y
d eba t e.
el nt eg ra t i v e
soc i a l c ont ra c t s
t h eory :
Th i s
t h eory presupposes
t h a t t h e
I nt ernet
c ommuni t y prec ed es
t h e
d ev el opment
of rul es of c ond uc t , publ i c
pol i c y ,
or "mi c rosoc i a l c ont ra c t s."
Corpora t e
et h i c a l
pol i c i es
a ssume t h a t
t h e
c orpora t i on's pa rt i c i pa t i on
i n t h e
d ev el opment
of soc i a l rul es woul d
nec essi t a t e
t ra nspa rent
et h i c a l
pra c t i c es.
'Dut y -ba sed
t h eori es: Th e norma t i v e na t ure of t h ese t h eori es mea ns t h a t
t h ey
a re used
by pol i c y ma kers
i n
d et ermi ni ng
t h e
c ompa ny 's
a bsol ut e
d ut i es t o c onsumers. I f t h e d ut i es of
fi d el i t y , benefi c enc e, a nd nonma l efi -
c enc e a re v i ol a t ed i n t h e c ourse of I nt ernet
ma rket i ng , g rea t er pa rt i c i pa t i on
by reg ul a t ory a g enc i es
i n t h e Uni t ed St a t es a nd
E urope
c a n be
expec t ed .
g P ower a nd
responsi bi l i t y equi l i bri um: Corpora t e power
a nd
responsi bi l i t y
must be
a pproxi ma t el y equa l
for I nt ernet ma rket ers t o be effec t i v e; i n t h e
l ong run,
t h ose wh o d o not use
power
i n a
wa y
t h a t
soc i et y
c onsi d ers
responsi bl e
wi l l l ose i t . Th i s c ov ers t h e ent i re c ont i nuum, bec a use i t i nc or-
pora t es org a ni za t i ona l
st a keh ol d ers a nd i nc l ud es t h e
mul t i pl e publ i c pol -
i c y perspec t i v es.
ousl y
a re
a rra y ed
a nd
expl a i ned
a s t o t h ei r rel ev a nc e t o
onl i ne
pri v a c y quest i ons.
Corpora t e
Busi ness
P ol i c y
Before
exa mi ni ng
broa d er et h i c a l a nd
publ i c pol i c y i mpl i -
c a t i ons,
we
bri efl y
out l i ne t h e
prog ress c ompa ni es
h a v e
ma d e t owa rd i nc rea sed onl i ne
pri v a c y .
I t
a ppea rs
t h a t more
busi ness fi rms a re
put t i ng
i n
pl a c e
mec h a ni sms t h a t
prot ec t
c onsumer onl i ne
pri v a c y
or offer benefi t s t o c onsumers wh o
a re
wi l l i ng
t o t ra d e off some of t h ei r
pri v a c y ri g h t s.
For
exa mpl e,
sev era l
ma jor
a ut o ma nufa c t urers a re
experi ment -
i ng
wi t h onl i ne ma rket
resea rc h ,
wh i c h a sks
i n-d ept h ques-
t i ons of
pot ent i a l
c onsumers a bout bot h t h ei r
l i fest y l es
a nd
t h ei r
d emog ra ph i c s
a s wel l a s
pa st purc h a si ng pa t t erns.
I n
ret urn, respond ent s
a re offered v ouc h ers for sev era l h und red
d ol l a rs t o be used on
a ny
of t h e fi rms'
prod uc t s.
Th i s
open
exc h a ng e
of i nforma t i on for subst a nt i a l
monet a ry c ompen-
sa t i on
beg i ns
t o
mi t i g a t e
some of t h e et h i c a l a nd
pol i c y
c on-
c erns exa mi ned i n t h i s a rt i c l e. Ama zon.c om's
a t t empt
t o
a l l ev i a t e fea rs a bout
sh a ri ng
c red i t c a rd a nd
persona l
i nfor-
ma t i on ov er t h e I nt ernet
by a d d i ng
a
"g ua ra nt ee"
but t on t o
i t s h ome
pa g e (wh i c h
l i st s t h e fi rm's
sec uri t y
a ssura nc es a nd
a n
opt i on
t o
t el eph one
i n t h e l a st fi v e
d i g i t s
of t h e c on-
sumer's c red i t
c a rd )
i s a n
exa mpl e
of c onc ern wi t h t h e
i nt eg ri t y /sec uri t y
of c onsumer i nforma t i on
(Zel l er
et a l .
1999).
Corpora t e
E t h i c a l
P ol i c y
I n t h e
spi ri t
of t h e et h i c of t h e mea n a nd t h e subst a nt i a l
sel f-reg ul a t ory
i ni t i a t i v es
a l rea d y
i n
pl a c e,
some
spec i fi c
c orpora t e
a c t i ons seem
nec essa ry
t o
prot ec t
c onsumer
pri -
v a c y
i n a n onl i ne env i ronment .
Al t h oug h
t h e
fol l owi ng
proposa l s
h a v e not been
a ppl i ed spec i fi c a l l y
t o t h i s c on-
t ext ,
t h e
a pproa c h
fol l ows t h e
posi t i on
a d v oc a t ed
by
P h el ps,
Nowa k,
a nd Ferrel l
(1999, p. 43),
wh o st a t e t h a t
ma rket ers sh oul d
a d opt
a
proa c t i v e
st a nc e i n
a l l ev i a t i ng
c onsumer c onc erns a bout
pri v a c y .
P ossi bl e
c orpora t e pol i -
c i es a re
*P ri v a c y
st a t ement :
E v ery
Web ma rket er sh oul d h a v e a n
expl i c i t
pol i c y
st a t ement on
pri v a c y . I d ea l l y ,
i t sh oul d not be a
l eg a l i s-
t i c d oc ument but one t h a t c oul d be
ea si l y
und erst ood
by
a
l a y person.
Si mi l a r t o ot h er et h i c s st a t ement s, t h e
pri v a c y
st a t e-
ment sh oul d be
wi d el y c ommuni c a t ed , reg ul a rl y rev i sed ,
a nd
ev en
promot ed (Murph y 1998).
*P ri v a c y
a ud i t :
Compa ni es
sh oul d
g o
t o
g rea t er l eng t h s
i n
st ud y -
i ng
t h e met h od s
t h ey
use t o c ol l ec t , st ore, a nd d i ssemi na t e c on-
sumer i nforma t i on. I n some c a ses,
suc h a n a ud i t wi l l
proba bl y
l ea d t o t h e c onc l usi on t h a t c onsumers sh oul d be i nformed i f t h e
fi rm
pl a ns
t o sel l t h ei r i nforma t i on t o t h i rd
pa rt i es.
*P ri v a c y t ec h nol og y :
New
t ec h nol og i es
t h a t enh a nc e
pri v a c y
ra t h er t h a n wea ken i t sh oul d be
a d opt ed
i f
possi bl e.
Th e
l ea d i ng
ma rket ers a nd a d v ert i sers on t h e Web c oul d set a
h i g h er
st a nd a rd
t h a n
c urrent l y
exi st s. Some of t h ese new
t ec h nol og i es
i nc l ud e
soft wa re t h a t ensures
a nony mi t y
on t h e I nt ernet , enc ry pt i on
of
messa g es
a nd t ra nsa c t i ons,
a nd a ud i t t ra i l s t h a t d et ermi ne wh o
a c c essed a fi l e a nd t h us d et er una ut h ori zed
queri es (E t zi oni 1999).
P ubl i c P ol i c y
Th e pol i c y
a rena for onl i ne pri v a c y
i s a g l oba l one; i nt erna -
t i ona l reg ul a t i on,
ra t h er t h a n just U.S.-ba sed publ i c pol i c y ,
i s l i kel y t h e l ong -t erm
a nswer. Th erefore, fut ure i ni t i a t i v es
sh oul d st ri v e for i nput
a c ross na t i ons. Th e fund a ment a l d i s-
a g reement
bet ween Ameri c a ns (wh o g enera l l y
d i st rust g ov -
ernment ) a nd E uropea ns (wh o usua l l y pl a c e
l i t t l e fa i t h i n
sel f-reg ul a t i on)
mea ns t h a t t h e need ed c ompromi se
bet ween
t h e E U P ri v a c y P ol i c y a nd t h e Uni t ed St a t es c ont i nues t o be
a ssessed . Howev er, t h e rea l i t i es of a new c ent ury
a re t h a t a t
l ea st some i nforma t i on wi l l be c ol l ec t ed a bout c onsumers
a nd el ec t roni c a l l y st ored . Th e l ong -st a nd i ng g oa l s
for a fa i r
ma rket pl a c e
a nd a l ev el pl a y i ng
fi el d sug g est
t h a t pol i c y -
This content downloaded from 203.217.177.216 on Wed, 6 Aug 2014 22:44:19 PM
All use subject to JSTOR Terms and Conditions
Journa l of P ubl i c
P ol i c y
&
Ma rket i ng
17
ma kers sh oul d st ri v e for more uni v ersa l
pol i c i es.
To a c c om-
pl i sh
t h ese
g oa l s,
t h e
fol l owi ng pol i c y proposa l s
a re offered :
*I nd i v i d ua l pri v a c y
c onsent : O ne of t h e
ma jor st i pul a t i ons
i n t h e
E U d i rec t i v e i s t h e
opport uni t y
for c onsumers t o
prov i d e
t h ei r
c onsent for t h e use of
persona l
i nforma t i on. Th i s
a ppea rs
t o be
unworka bl e i n our
c omput eri zed a g e.
Howev er, t h e d et a i l s on
h ow t o mov e
bey ond
t h e
c a se-by -c a se
met h od t o a more
g ener-
a l i zed c onsent wi t h out
g i v i ng up pri v a c y represent s
a
ma jor
pol i c y quest i on.
Bot h U.S. a nd E U
pol i c y ma kers
need t o st ri v e
for a n et h i c -of-t h e-mea n resol ut i on t o t h i s d i ffi c ul t i ssue.
*I nnov a t i v e
sel f-reg ul a t i on:
Th e FTC i s
seeki ng
t h e
i nput
of a l l
ma jor pri v a c y g roups
i n
d ev el opi ng
a worka bl e
pri v a c y pol i c y
for t h e I nt ernet . Th e
opt -out
a nd
opt -i n
i ssue c ont i nues t o be a
pol i c y
c onc ern. Web si t es c oul d be
requi red
t o seek t h e c on-
sumer's
a g reement
i nst ea d of
a ssumi ng
t h a t si l enc e mea ns c on-
sent . At t h e
v ery l ea st ,
t h e FTC must ensure t h a t
a ny opt -out
a wa reness
c a mpa i g n
i s
h ea v i l y publ i c i zed (Green 1999).
*L i mi t ed new
reg ul a t i on:
O ne a rea t h a t
a ppa rent l y
need s furt h er
prot ec t i on
i s med i c a l
pri v a c y .
No fed era l
reg ul a t i on proh i bi t s
d i sc l osure of suc h sensi t i v e i nforma t i on a s a bort i on,
c a nc er
t rea t ment ,
or ment a l i l l ness
(E t zi oni 1999).
Th i s a rea seems t o
st ri ke a t t h e c ore of i nd i v i d ua l
pri v a c y
a nd h a s bec ome a c on-
sumer
(not just
a
med i c a l ) pri v a c y
c onc ern.
Resea rc h
Ag end a
Ac a d emi c resea rc h ers c a n i nform t h e et h i c a l a nd
pol i c y
d eba t e
by sy st ema t i c st ud y
of c onsumer
pri v a c y quest i ons
fa c i ng
busi ness a nd
g ov ernment .
Th ese i nc l ud e t h e
fol l owi ng :
*Are t h e
pri v a c y
st a t ement s
c urrent l y a d opt ed by i nd ust ry
effec -
t i v e i n
d ea l i ng
wi t h c onsumer
knowl ed g e
a nd c ont rol
ques-
t i ons? A c ont ent
a na l y si s
of t h ese st a t ement s
by i nd epend ent
jud g es
c oul d a ssess t h e et h i c a l
pri nc i pl es c ompa ni es espouse
a nd wh et h er t h e st a t ement s i nc rea se t h e l i kel i h ood of use
by
c onsumer.
*Wh i c h of t h e fa i r i nforma t i on
pri nc i pl es proposed by
t h e FTC
a re most c ent ra l t o c onsumers? A
d ept h
i nt erv i ew
a pproa c h
ma y
l ea d t o
i nsi g h t s
i nt o wh i c h
pri nc i pl es
a re t h e most c ent ra l
c onc erns a nd wh i c h ones c onsumers
ma y
be
wi l l i ng
t o t ra d e off
und er c ert a i n c i rc umst a nc es.
*Wh a t t ra d e-offs a re onl i ne c onsumers
wi l l i ng
t o ma ke for t h ei r
persona l i nforma t i on,
a nd d o
t h ey perc ei v e
t h e
c ompensa t i on
t o
be fa i r? A
l a rg e-sc a l e surv ey
c oul d a ssess t h e
perc ei v ed
v a l ue of
one-on-one
ma rket i ng
i n t h e c ont ext of a c ost -benefi t
a na l y si s.
*How d o
org a ni za t i ons'
a c t i v i t i es i n
c ol l ec t i ng
a nd
usi ng
i nfor-
ma t i on a ffec t
l ong -t erm rel a t i onsh i ps?
Wi l l c ust omers
forg i v e
ma rket ers' sh ort -t erm a c t i v i t i es
(e.g .,
l oss of c ont rol ,
l oss of
pri -
v a c y )
i n ret urn for fut ure rewa rd s? A
l ong i t ud i na l st ud y
of c on-
sumers pa rt i c i pa t i ng i n I nt ernet l oy a l t y prog ra ms mi g h t
unc ov er wh et h er ma rket ers' i nc rea si ng d ema nd s for persona l
i nforma t i on a re d et ri ment a l t o l ong -t erm c ust omer sa t i sfa c t i on.
*Ca n i nt erna t i ona l pri v a c y st a nd a rd s be d ev el oped for t h i s
med i um g i v en v a st c ul t ura l d i fferenc es? A c ompa ri son st ud y
st a rt i ng wi t h U.S. a nd E uropea n
c onsumers a nd t h en expa nd ed
t o ot h er c ount ri es mi g h t a sc ert a i n wh et h er a set of uni v ersa l
c ore pri v a c y ri g h t s d o exi st . Suc h a projec t sh oul d a ssi st pol i c y -
ma kers i n d et ermi ni ng t h e l ev el s of fut ure reg ul a t ory
a c t i on.
Conc l usi on
Ma rket ers a nd
publ i c pol i c y ma kers
bot h h a v e a v est ed i nt er-
est i n
sol v i ng
t h e onl i ne
pri v a c y
d i l emma . I nc rea si ng c on-
sumers' c onfi d enc e a nd t rust i n t h e pri v a c y a nd sec uri t y of
t h ei r i nforma t i on wi l l fuel
g rowt h
of e-c ommerc e on t h e
I nt ernet .
O nl y t h roug h
ma ssi v e
g rowt h
i n
purc h a si ng
from
c ompa ni es
on t h e
I nt ernet ,
a nd not
just surfi ng ,
wi l l t h e rev -
enue be
prod uc ed
t o
c ompensa t e
for t h e
h i g h
c ost s
c ompa -
ni es need t o bea r t o be
c ompet i t i v e
a nd t o bui l d bra nd
equi t y .
Th e
a rg ument s
i n
support
of
sel f-reg ul a t i on sug g est
a sh ort -t erm
a pproa c h : Compa ni es
a re
l ooki ng
for t h e mea ns
t o ma rket t o c ust omers i n t h e
present
a nd
ma y
fa i l t o see
h ow t h ei r a c t i ons a ffec t t h ei r
l ong -t erm
suc c ess i n t h i s
med i um. P ubl i c
pol i c y ma kers
i n t h e Uni t ed St a t es a nd
E urope
need t o
a g ree
on c ommon
pri v a c y
st a nd a rd s,
ev en i f
i t i s
onl y
a t a mi ni ma l l ev el .
Th i s a rt i c l e
proposes
t h a t et h i c a l
st a nd a rd s,
not
just pol i c y
st a t ement s,
sh oul d be
a d opt ed
i n
c onfront i ng
onl i ne
pri v a c y
c onc erns. Sev era l
posi t i v e
rec ent
d ev el opment s, i nc l ud i ng
i nc rea si ng i nd ust ry
a nd
g ov ernment d i a l og ue
a nd t h e
g row-
i ng
use a nd enforc ement of
pri v a c y
st a nd a rd s, si g na l
a n
enl i g h t ened emph a si s
on
pri v a c y .
Th e
proa c t i v e
busi ness
a c t i ons a nd
pol i c y
i ni t i a t i v es
out l i ned
i n t h e
prev i ous
sec t i on
sh oul d be
h el pful
i n a nsweri ng
t h i s fund a ment a l
quest i on:
Wh a t i s t h e
ri g h t t h i ng
t o d o for t h e c ust omer? O ur
a spi ra -
t i ons for c onsumer
pri v a c y sug g est
a n
i nt eg ra t i on
of busi -
ness, et h i c a l ,
a nd
publ i c pol i c y
st a nd a rd s t o
mi t i g a t e
wh a t
some bel i ev e t o be a n i nev i t a bl e erosi on of
pri v a c y .
Append i x
I l l ust ra t i ons of O nl i ne
P ri v a c y
I ssues
True
st ory : rec ent l y ,
I fol l owed a l ea d from Ma c User
ma g -
a zi ne t o a web
pa g e
for
d ea l i ng
wi t h
spa m
e-ma i l ers. Th a t
pa g e sug g est ed
t h a t one of t h e fi rst
st eps
t o t a ke wa s t o c on-
t a c t serv i c es t h a t t ra c k
peopl e's
e-ma i l a d d resses. Wi t h
g rowi ng h orror,
I c onnec t ed
pa g e
a ft er
pa g e
on t h e l i st a nd
l oc a t ed
my sel f
i n t h ei r d a t a ba ses. Some serv i c es l i st ed fa r
more t h a n
just
na mes a nd e-ma i l a d d ress.
My
h ome a d d ress
a nd
ph one
number were a c c essi bl e from t h e sa me rec ord .
Two serv i c es ev en h a d a
fa c i l i t y
t o sh ow a
ma p
of
my
nei g h borh ood
a nd t h e l oc a t i on of
my
h ouse i n i t . Th e wi d e-
sprea d d i spersa l
of i nforma t i on of t h i s
sort ,
wi t h out
pri or
c onsent ,
i s a seri ous i nv a si on of
pri v a c y (Ha nd l er 1996).
Wi t h a 98%
c ompl i a nc e ra t e,
our
reg i st ered
users
prov i d e
us wi t h
spec i fi c
i nforma t i on a bout
t h emsel v es,
suc h a s t h ei r
a g e, i nc ome, g end er
a nd
zi p
c od e. And bec a use ea c h a nd
ev ery
one of our users h a v e v eri fi a bl e e-ma i l
a d d resses,
we
know t h ei r d a t a
[a re]
a c c ura t e-fa r more a c c ura t e t h a n
a ny
c ooki e-ba sed
c ount i ng . P l us,
a l l of our user
i nforma t i on
i s
wa reh oused i n a
soph i st i c a t ed d a t a ba se,
so t h e i nforma t i on
i s st a bl e, a c c essi bl e a nd fl exi bl e. Depend i ng on y our need s,
we c ust omi ze user
g roups
a nd
a d just messa g es
t o
spec i fi c
seg ment s, usi ng t h i rd -pa rt y
d a t a or a d d i t i ona l
user-suppl i ed
i nforma t i on. So
y ou
c a n
expa nd y our t a rg et i ng possi bi l i t i es.
Wh a t 's more, bec a use
t h ey 're New York Ti mes on t h e Web
subsc ri bers, our users a re a ffl uent , i nfl uent i a l a nd
h i g h l y
eng a g ed
i n our si t e (New York Ti mes a d v ert i sement ).
Ameri c a O nl i ne I nc . (AO L ) rec ent l y
a nnounc ed i t
woul d
d rop
i t s
pl a n
t o sel l subsc ri ber
ph one
numbers t o i t s
busi ness
pa rt ners
for
t el ema rket i ng purposes.
Th i s a c t i on
c a me a ft er t remend ous c ri t i c i sm from c ust omers, pri v a c y
g roups
a nd c onsumer l ea d ers.
Ac c ord i ng
t o a st a t ement t o
i t s subsc ri bers, AO L nev er pl a nned t o ma ke i t s c ust omers'
t el eph one
numbers a v a i l a bl e for rent a l t o t el ema rket ers.
"Th e
onl y c a l l s we i nt end ed for y ou t o rec ei v e woul d h a v e
This content downloaded from 203.217.177.216 on Wed, 6 Aug 2014 22:44:19 PM
All use subject to JSTOR Terms and Conditions
18 Consumer O nl i ne
P ri v a c y
been from AO L a nd a l i mi t ed number of
qua l i t y
c ont rol l ed
AO L
pa rt ners," a c c ord i ng
t o t h e st a t ement .
"Howev er,
upon
furt h er
refl ec t i on,
we
t od a y
d ec i d ed t o
c h a ng e
our
pl a ns.
We wi l l not
prov i d e
l i st s of our members'
t el eph one
numbers ev en t o our
pa rt ners.
Th e
onl y
c a l l s
y ou mi g h t
rec ei v e wi l l be from us."
Respond i ng
t o t h e i ni t i a l
a nnounc ement of t h e
pl a n,
c onsumers
swa mped
AO L 's
t ol l -free number t o
c ompl a i n
a nd New York
At t orney
Genera l Denni s Va c c o c ri t i c i zed t h e
pl a n d uri ng
a n i nt er-
v i ew on CNBC. I n
a d d i t i on,
Wa l l St reet
respond ed
wi t h a
four
perc ent d rop
i n AO L 's st oc k
pri c e (Di rec t Ma rket i ng
1997, p. 6).
I nt el
Corp.
l a st week d ec i d ed t o ma ke
c h a ng es
i n a sec u-
ri t y
fea t ure of i t s
upc omi ng
P ent i um I I I
c h i p
a ft er
pri v a c y
g roups
st a rt ed a
boy c ot t
of t h e
c h i p g i a nt 's prod uc t s.
I d ent i fi c a t i on numbers t h a t
a ppl i c a t i on
v end ors c oul d use t o
i d ent i fy
a
proc essor
a nd i t s users woul d ma ke t h e I nt ernet
a nd el ec t roni c c ommerc e more
sec ure,
t h e Sa nt a Cl a ra -
ba sed
c ompa ny
sa i d . But
pri v a c y
a d v oc a t es
a rg ued
t h a t t h e
i d ent i fi c a t i on numbers woul d erod e I nt ernet
pri v a c y
a nd
ma ke i t ea si er for
c ompa ni es
t o t ra c k users for
ma rket i ng
purposes (Sa v a g e 1999, p. 83).
Ri ma Berzi n
rec ent l y
i nh eri t ed a
l a pt op c omput er
from
h er h usba nd a nd
beg a n
a n i nt ense
t wo-d a y h oney moon
wi t h t h e I nt ernet . Sh e went a l l t h e
wa y ; buy i ng jea ns
a t
GAP , browsi ng
for books a t
Ba rnesa nd nobl e.c om
a nd
reg i st eri ng
for Ma rt h a St ewa rt 's onl i ne
journa l .
Wh i l e
Berzi n wa s
sh oppi ng , somet h i ng v ery
un-Ma rt h a
h a p-
pened :
h er
spree
l eft
mud d y d i g i t a l foot pri nt s
a l l ov er t h e
Net .
Berzi n,
a Ma nh a t t a n mot h er of
t wo,
i s l i ke a l ot of
ot h er
Ameri c a ns
just st eppi ng
ont o t h e Web. Wh en a
fri end t ol d h er h ow muc h
persona l
i nforma t i on
sh e h a d
swa pped
for t h e c onv eni enc e of h ome
sh oppi ng ,
sh e wa s
a ng ry
a t
fi rst ,
t h en c onfused . O n Berzi n's fi rst v i si t t o
Ga p,
h i d d en fi l es c a l l ed "c ooki es"
were
d eposi t ed
on h er
c omput er.
O t h er soft wa re
prog ra ms
wh i rred i nt o a c t i on t o
t ra c k a nd
a na l y ze
h er onl i ne beh a v i or. Ma rket ers d i d n't
know h er na me a t
fi rst ,
but t h e
a nony mi t y ev a pora t ed
wh en Berzi n ma d e h er fi rst
purc h a se (Ba i g , St epa nek,
a nd
Gross
1999, p. 84).
Comet
Sy st ems a c knowl ed g ed
t h a t i t s
popul a r
soft wa re
t ra c ks c ust omers a s
t h ey
t ra v el a c ross t h e
I nt ernet , rec ord i ng
wh i c h Web si t es a re
bei ng
v i si t ed . Th e
soft wa re,
wh i c h
c h a ng es
a Web browser's
c omput er
c ursor i nt o c a rt oon
c h a ra c t ers a nd ot h er
i ma g es,
i s i nst a l l ed on more t h a n 16
mi l l i on
c omput ers.
Cust omers'
uni que
seri a l numbers a re
c ol l ec t ed upon
t h ei r v i si t t o a ny
of 60,000 Web si t es, i nc l ud -
i ng
d ozens of si t es a i med a t y oung c h i l d ren. Cri t i c s c ont end
t h i s i nforma t i on i s bei ng c ol l ec t ed wi t h out ful l d i sc l osure t o
i t s c ust omers a nd t od a y 's t ec h nol og y
ma kes i t
possi bl e
for
t h e c ompa ny
t o c orrel a t e t h e seri a l numbers wi t h c on-
sumers' i d ent i t i es (Wa l l St reet Journa l 1999, p. B6).
Referenc es
Auerba c h ,
Jon G.
(1999),
"To Get I BM
Ad ,
Si t es Must P ost
P ri v a c y
P ol i c i es,"
Th e Wa l l St reet Journa l , (Ma rc h 31),
B
1,
B4.
Ba i g ,
E d wa rd C.,
Ma rc i a
St epa nek,
a nd Nei l Gross
(1999), "P ri v a c y
on t h e Net ," Busi nessWeek, (Apri l 5),
84-90.
Ba y ne,
Ki m M.
(1998), "P ri v a c y
St i l l
Burni ng
Web I ssue,"
Ad v ert i si ng Ag e, (June 29),
37.
Bea t t y , Sa l l y
Gol l
(1996),
"Consumer
P ri v a c y
on I nt ernet Goes
P ubl i c ," Th e Wa l l St reet
Journa l , (Februa ry 12),
B
I .
Bl oom,
P a ul
N., Georg e
R.
Mi l ne,
a nd Robert Ad l er
(1994),
"Av oi d i ng
Mi suse of New I nforma t i on
Tec h nol og i es: L eg a l
a nd
Soc i et a l Consi d era t i ons," Journa l
of Ma rket i ng ,
58
(Ja nua ry ),
98-110.
Bra nd t ,
Joh n R.
(1998),
"Wh a t P ri c e
P ri v a c y ?" I nd ust ry Week,
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