Coming Together on E-Privacy

If we chronicle the evolution of electronic commerce via the headlines, the conventional wisdom is that online privacy is Job One.

If online privacy really is a top priority of legislators, company owners and watchdog organizations, that’s a good thing. However, the more ink privacy consumes in legislative committee meetings, in press releases and in media, the more confusing it becomes. Suddenly the most unlikely individuals become e-privacy bedfellows.

Consider: This week, President George W. Bush’s nominee for FBI director, Robert Mueller, emphasized his commitment to consumer privacy on the Internet. He made a point of offering his opinion that privacy must be balanced with technological advancements.

Not a moment too soon, if you were to ask one Nicodemo S. Scarfo Jr., an alleged member of the Gambino crime family.

Scarfo wants to have evidence against him thrown out because it was gathered by the FBI’s Internet scanning system, Carnivore. The system, according to its critics, is an example of Big Brother at his absolute worst.

Are Scarfo and Mueller looking at the same sheet music?

Tune In, Tune Out

So what does this all have to do with you, or me, or e-commerce? In a word, everything.

E-business owners would do well to pay attention to news surrounding governmental cyber-snooping, as well as any pending legislation designed to protect online consumer privacy.

For one thing, because of all that above-mentioned ink the press is devoting to these issues, consumers are clearly tuned in to any possible compromise of their online privacy — everything from credit-card data being exposed on the Web, to the sale of individual purchase and clickstream histories. Such compromises are instantly recognized as a negative by the majority of Internet users.

Negatives translate to hesitation, and hesitation in the online consumer base can only mean surfing without buying. And a pile-up of abandoned shopping carts.

Good Cop, Bad Cop?

That is why Mueller’s attitude may work to benefit e-tailers.

In Senate Judiciary Committee hearings, when Senator Diane Feinstein (D-California) introduced a line of questioning about the FBI’s use of electronic surveillance and high-tech theft cases, Mueller said he believes the FBI should use its resources to obtain convictions that will lead to “the greatest form of deterrence.”

Whether it will help individuals looking for some peace of mind vis-a-vis Big Brother is another question altogether.

Giant Step, Big Hill

Meanwhile, while e-tailers wrestle with the increasingly challenging job of protecting the privacy of their customers, healthcare Web sites have taken a giant step forward in the fight.

This week, the American Accreditation Healthcare Commission issued criteria that Web sites must meet in order to be accredited. The two most crucial rules are simply that Web sites must be regularly reviewed by an internal oversight committee — including security audits if personal information is collected — and consumers must opt-in and consent before any of their personal data can be used.

It all adds up to a lot more detail work for Web sites. Keeping track of who opted in or opted out, or whether their choices applied to certain areas but not to others, is an uphill climb for Web sites, to be sure.

Miles To Go

If healthcare sites emerge as the leader in protecting online privacy, so be it. What really matters is that commercial sites must be as diligent and vigilant as those who set the tone for consumer protection.

That will translate into massive labor dollars being spent to implement systems that go the extra mile in safeguarding customer data.

It will also require a forward-thinking approach to the issues at hand. The payoff for e-tailers who make the effort will come later, when the general online consumer base finds a greater comfort level in doing business online with the trusted merchants. That’s when those shopping carts will begin to speed on through the virtual checkout lane.

Who’s On First?

So who should set the standards for online privacy as it relates to e-tailers? Some believe it should be a government function, while others think that Uncle Sam will only further muddle the issues.

Should there be an independent oversight organization publishing industry guidelines to which e-tailers voluntarily submit?

Or should there be nothing voluntary about it? Perhaps all e-tailers need to contribute to the greater good of the industry and comply with across-the-board privacy standards mandated by law.

Are we a one-for-all and all-for-one cyber society? If so, then we’re all just six degrees from Nicky Scarfo.

Fight the Power

If Scarfo’s lawyers are able to convince the courts that his privacy was violated, then so can we in future cases and situations. And so might your customers, if you’re an online business. And then more headlines, more distrust and more hesitation among potential online buyers will ensue.

The way to head off the flood of litigation and the growing consumer confusion about Internet privacy is to establish reasonable guidelines for online privacy right now, both laws and industry standards, and never waver from them.

What do you think? Let’s talk about it.