A Challenge to Ecommerce
Many consumers are hesitant to make purchases on the Internet out of fearthat the personal information they provide will be misused or compromised.There are many valid reasons to be concerned. People have experiencedidentity theft, lost jobs and suffered loss of earnings because privateinformation about them was inappropriately used. For instance, AmazingInternet Products, which offers a penis enlargement herbal supplementcalled Pinacle, recently exposed its records, live online (Frost, 2001).This exposed the names of 6000 men from a variety of backgrounds seeking toenlarge their penises. Fear of embarrassment will probably prevent manyconsumers from buying these types of products online in the future.Privacy is indeed one of the most complex legal issues facing e-commercebusinesses today. According to Marc Rotenberg, Executive Director of the
er in Washington, DC, "The absence ofconsumer privacy protection may in fact be the number one obstacle to thegrowth of e-commerce (Frost, 2001). All businesses must have the trust of its customers tosurvive. "A recent study shows that American consumers misunderstand how Internetcompanies use their personal information. Some people believe that this self-regulation is a good thing, and that theinteractive nature of the Internet makes possible a new approach to privacyprotection, one that focused on individuals exercising privacy "choice" or"preferences. They convinced Congress thatcompanies could be trusted to protect online privacy of their customersvoluntarily except when a person's financial or health data were involved. As John Palafoutas, Senior Vice-President of Domestic Policy &Congressional Affairs at AeA, told the House Subcommittee on Trade,Commerce and Consumer Protection (Frost, 2001), "Businesses that do notheed the expectations of their customers will quickly lose trust, andultimately their viability. Companies are using many methods to track and collectpersonal information. While the programming ingenuity is admirable, theethical use of the collected data is yet to be determined and we do knowthat it opens up many doors of risk. Industry groups largely beat back efforts to pass new privacy laws at theheight of the dot com boom of the 1990's. This is animportant consideration for the future of ecommerce. It allows a site to greet the customer by name, offerservices and products according to individual preferences, and not beingrequired to retype requested information. A profile allows personalization that can give users asense of belonging. Thus, they believe that there is a need for regulation. A company's reputation for protecting private information remains itsstrongest suit.
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