Report: E-Biz Needs To Foster Online Privacy

Although American consumers increasingly view themselves as the “first line of defense” in the fight to safeguard personal information online, firms conducting business on the Internet need to offer stronger privacy protections, according to anew study released Tuesday by the Privacy Leadership Initiative(PLI) and Harris Interactive.

“People are telling government and industry that they want the most controland responsibility for protecting their privacy, and that they are preparedto exercise that responsibility when given the tools to do so,” said JohnKamp, acting executive director of the PLI, an association of chief executive officers from 15 major corporations and nine business groups.

The study found that while 45 percent of online users think business Web sites have gotten better at providing privacy notices, approximately 59 percent said companies still need to make considerable improvements in informing users what the businesses do with their personal information.

Moreover, the report said 43 percent of Internet users believe thatbusinesses currently have no incentive to protect their privacy and that onlyhalf think consumers have an “appropriate level” of control over how their information is gathered and used.

Good Business

PLI and Harris said online firms should view the findings as an opportunity to build customer confidence and cement a long-term buying relationship because consumers are more likely to spend if they believe their privacy is safe.

“At the end of the day, good privacy is good business, and everyone canbenefit from that,” said Kamp.

Privacy Seal Pros and Cons

While many companies have sought to quell consumer concerns about online shopping by incorporating privacy notices and seals on their Web sites,the report said the results are mixed.

For example, the study found that such notices are “invaluable” in helpingto ease user concerns over sharing their data. In fact, the report said manyonline users often supply personal information based on their presence alone.

On the other hand, the study found that while consumer awareness of onlineprivacy statements is growing, fewer Internet shoppers are actually readingthe fine print. As part of a similar survey conducted by the PLI and Harrislast year, about 78 percent of the respondents reported doing so. This timearound, that figure fell to just over two thirds.

Too Much Info

The chief reasons cited for the decline by those who rarely or never readonline privacy statements included that they did not want to take the timeand that they did not intend to purchase goods via the Web. Others said thenotices are too lengthy and crammed with an overabundance of detail.

Further illustrating the disconnect between consumer groups that areclamoring for more stringent online protections and the seeming apathy bysome buyers towards wading through privacy policies, the study said thatonly one quarter of users have set their computer settings to reject cookieswhile just 10 percent have installed software to make purchases anonymously.

Keep It Simple

The report advises that online businesses looking to bridge the gap should “dramatically simplify” privacy notices, so they will serve as a useful toolfor consumers to protect their information.

“It’s not enough to provide just a privacy statement,” said HarrisInteractive senior vice president David Krane.

“For any organization interested in growing their business both online andoffline, they must give consumers options and tools to help safeguard theirprivacy, as well as consumer-friendly messages that don’t require a lawdegree or translator to follow,” he added. “There is certainly room forimprovement in this area.”

Fear Factors

While privacy advocates have long clamored for stronger regulatory oversightto protect personal information, the study concluded that almost one quarterof consumers are still most concerned about security or hackers invadingtheir privacy.

Other prevalent fears cited by Internet users surveyed for the reportinclude the surveillance of their online behavior, an erosion of overallprivacy rights, credit card or financial fraud, and the sale or transfer ofpersonal data to third parties.

Balancing Act

Despite these concerns, more than half of online consumers told PLI and Harris that they believe the benefits of shopping online outweigh the use andcollection of private data. In fact, the groups found that Web users aremost willing to share their information for product discounts.

“Concerns don’t always translate to behavior, which means privacy is anissue that continues to evolve,” said Krane.

“Certainly, familiarity with the medium helps,” he added, “but I think mostpeople would be willing to share more basic information with offline andonline companies in exchange for goods and services if they were assuredtheir information was being collected and used appropriately.

In conducting the study, PLI and Harris surveyed nearly 3,2000 consumers on their privacyexperiences and expectations.