Amazon To Tune Privacy Policy

Two years after it angered privacy advocates by altering its privacy policy, Amazon.com (Nasdaq: AMZN) has told a group of state attorneys general that it will change the guidelines again to make them more consumer-friendly.

Amazon, which said the changes will be made within a few weeks, plans to provide consumers with examples of how their data may be used and what specific information is being collected. In addition, the e-tailer said it will let longtime customers choose to have their data treated under the guidelines of the earlier policy, will not sell its customer database to marketers and will close some loopholes in its policy.

The changes were announced by Massachusetts Attorney General Thomas Reilly, who spearheaded a coalition of 16 states and the District of Columbia that pressed Amazon to improve the policy. Amazon could not be reached for comment.

Changes Debated

Reilly said his office and other states first became involved in the case in September 2000, when complaints began to flow after Amazon informed customers via e-mail that it was changing its privacy policy. At the time, Amazon said the changes were aimed at making the policy easier to understand. The result was a document nearly 2,000 words long.

Two leading privacy advocate groups, Junkbusters and the Electronic Privacy Information Center (EPIC), lashed out at the update, claiming it enabled Amazon to consider some personal data a permanent part of its business records that could be deemed an asset if the company were ever sold.

At the time, EPIC noted that Amazon was one of its first online affiliates but that the merchant’s policy update had prompted the group to sever its ties.

On the Surface

Reilly said the revised policy will reflect two goals of consumer advocates: that companies respect information collected from shoppers, and that shoppers can readily understand what information is being gathered and how it will be used.

“It’s extremely important for all companies — especially Internet sellers — to handle consumer data carefully and confidentially,” he noted.

But Junkbusters president Jason Catlett said the changes are mostly cosmetic and that Amazon’s practices, rather than its policy, should be the subject of an independent audit.

Catlett first called for an audit after the Federal Trade Commission (FTC) closed its investigation into Amazon and its marketing subsidiary, Alexa Internet. The FTC stopped short of imposing sanctions but stated last year that Amazon was “likely deceptive” in how it informed consumers about the Alexa connection.

Still a Hurdle

Forrester Research analyst Christopher Kelley told the E-Commerce Times that consumer concerns about privacy continue to loom as a major hurdle to increased online spending. The research firm estimated that US$15 billion went unspent online in 2001 because of privacy fears.

“It’s still right up there on the front of consumers’ minds, so anything Amazon and others can do to soothe those fears is important,” Kelley said. He and other analysts also noted, however, that the vast majority of online shoppers ignore privacy policies posted on Web sites.

Amazon, meanwhile, is busy scrambling to fix a glitch that caused customers who should have qualified for a Super Saving Shipping discount to be charged for mailing costs. The company reportedly is contacting thousands of customers via e-mail to offer them refunds of the amount they were overcharged.