IBM Develops New Online Privacy Services

Surfing the wave of concern about the dissemination of private consumer information by e-commerce companies and Web organizations, IBM announced today the formation of a consulting services group to convey privacy issues to businesses.

The company said the services were a tool-assisted methodology derived from extensive research and would ultimately help businesses understand the importance of consumer trust in the evolution of e-commerce.

The new consulting service falls under the umbrella of IBM’s Global Services division, a $29 billion-a-year information technology services provider. The division is the fastest growing of IBM. It employs 130,000 people in 160 countries.

The cost of the privacy consulting services will vary, IBM said, depending on the scope of the assignment. The company says the main thrust of their services is to help businesses implement policies and procedures to protect personal information collected and maintained on customers and employees.

“The growth of electronic commerce depends on trust,” said Gary Roboffof a Banking and Industry Technology Secretariat steering committee. “These new services can help companies such as banks build that trust and show individuals that they are protected by a thoughtful comprehensive privacy program.”

Privacy Issues Crucial To E-Commerce

As much as a group of people with varied interests and motivations can agree, virtually all will acknowledge that privacy issues are crucial to the development of e-commerce.

While everyone says that they are necessary, not all agree on who should be implementing and enforcing the guidelines. Industry associations and free-enterprise advocates argue that the industry can police itself and it doesn’t need Washington bureaucrats to step in and do the job.

Critics of that say that self-appointed guardians make terrible watchdogs – all bark and no bite so to speak. Government needs to take control of the situation they say, before the problem spreads.

Industry Lobbying Hard

One group who represents free enterprise advocates is the Online Privacy Alliance. It consists of nearly 90 businesses and associations – from Yahoo!, AOL and IBM to the European-American Business Council and the U.S. Chamber of Commerce – and it came out in support of IBM’s new services.

The group says that 65 percent of Media Metrix’s Top 500 rated Web sites are in privacy policy compliance. That means they have implemented a procedure to protect consumers and have posted that policy and procedure on their site.

Former Federal Trade Commission chair Christine Varney is an advisor to the group. She said she sent a letter to the 35 percent in non-compliance suggesting that they get up to speed. The repercussions can be expensive. Disney, Microsoft, IBM and other companies have said they won’t advertise on Web sites that do not have credible privacy policies.

Varney also touted a recent FTC report that found that the industry is making strides in adressing the privacy concerns. Varney of course, was the former FTC chair and that fact is likely to fuel critics’ concerns that the industry is lobbying very effectively in a time-honored Washington tradition.