Has E-Commerce Sold its Soul?

Of all the issues surrounding e-commerce, privacy is perhaps the most hotly debated. Everyone wants to protect privacy, but no one can agree on how.

Resolution of the issue is going to take some work. Until people in the e-commerce world begin to grasp the concept of privacy as a social value, and understand that it involves more than merely protecting a consumer’s credit card number, the debate figures to go nowhere.

I teach a college-level media ethics class in which I define the word “value” as “a moral element in our society that we honor as something good.” Truth and justice are just two examples. Privacy is another.

The question is, are we willing to make sacrifices to bring this value to e-commerce?

The Bigger Picture

The problem e-tailers have regarding privacy is narrow vision. Over the past year, consumers and advocacy groups have voiced their distrust of the way online companies handled their personal data. The attempts by Amazon and Toysmart to claim information about customer contacts and buying behavior only inflamed the issues.

Already, it is widely expected that the 107th U.S. Congress will pass a privacy law of some sort during 2001. The very need for such legislation speaks to the failure of e-commerce to respect consumers’ rights to privacy and to tackle the issue head-on.

Instead, many high profile tech companies are choosing to deal with privacy issue by installing the new executive position of “chief privacy officer.” A CPO can protect the company’s liability on privacy matters, but the position seems more of a grandstanding marketing campaign to calm the masses than a sincere effort to honor individual rights to privacy.

What consumers really need is a huge paradigm shift in the way we do business. If you don’t think so, ask yourself this: Are customers supposed to place their blind faith in companies that are invisible, offer little or no opportunity to interact with human beings, and expect the public to trust them, simply because the CPO says so?

Doing What Matters

Because e-tailers most often respond to numbers, let’s break the numbers down for them:

An IDC study revealed that 65 percent of 779 consumers surveyed had not purchased anything online in six months because of privacy concerns. Further, survey results from the Software and Information Industry Association (SIAA)show that two-thirds of Internet users do not patronize Web sites that will not guarantee the security of their personal data.

The thing to keep in mind is that e-commerce privacy means more than focusing only on the actual misuse of their credit cards, or the inconvenience of erroneous charges. After all, have you ever disputed a charge on your bank credit card? If you have, you probably won.

The bottom line? If Web sites did a better job respecting consumers’ rights to privacy, a majority of Net users would shop online for both essentials and luxury items.

Big Blue Concurs

Some big business leaders are starting to take heart. A few weeks ago, IBM chief executive officer Lou Gerstner told an audience at the E-Business Conference and Expo in New York City:

“Through our policies and practices, industry has to send an unambiguous message that tells people: ‘You can trust us. You have choices. They will be respected. And you’ll know in advance how any information you give us will be used.'”

By speaking of “trust,” “respect” and “choice,” Gerstner was reinforcing the centuries-old relevance of moral values. The speech was a step in the right direction. Hopefully, others will take the same step.

Including consumers.

Shared Responsibility

We Internet users can also be fickle about the privacy issue. Ask us if privacy counts in our online experience, and we’ll jump on the soapbox. But offer us cash or merchandise in exchange for a tidbit about our personal lives, and we’re throwing that soapbox in the trash.

IDC queried consumers about what might persuade them to share personal information. It turns out that a significant percentage can be bought with a US$100 gift certificate.

On another level, it appears consumers are still dazzled by personalized elements, such as Amazon’s “Here’s What’s New For You” and “1-Click” features. For my part, I have to admit I like it that CDNow knew I’d want to hear a clip of Sting’s most recent album. But they couldn’t have known that if I hadn’t met them halfway with some personal information about my taste in music.

Dollar Values

Certainly, there are perks that make online shopping attractive, but they entail making a deal with the anti-privacy devil — a deal we should think twice about.

If e-commerce is going to live up to its potential, e-tailers will have to learn a little something about social responsibility.

And if e-tailers are to learn anything about social responsibility, shoppers will have to exercise restraint when it comes to being seduced by cash and convenience.

Otherwise, we might as well just drop the idea that privacy is a value at all.

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