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Online Privacy Snafus Prompt the Government to Take Action

Posted by | November 19, 2010 eCommerce Business Issues | 2 Comments

From the earliest days of e-commerce, user privacy has been a paramount concern, on both sides of the transaction. Buyers are skittish about sharing their financial and personal data, and sellers are leery of violating regulations that could result in steep fees or even the demise of their business.

In response to the recent Internet privacy breaches at AT&T, Google, Apple Inc., and Facebook, Senator John Kerry is spearheading legislation that will seek to better protect online shoppers’ private information. He hopes to pass some form of an online privacy bill by early next year—which seems like a rather lofty goal.

Online Privacy Legislation

Spurred on by the congressional investigation into the Internet moguls’ privacy policies, Kerry says he wants to create a bill that will establish “baseline standards for privacy protection that ensure people’s identity is treated with the respect it deserves”.

At a hearing held by the Senate Commerce Committee on July 27th, representatives from each company defended their commitment to protecting their users’ private information, but admitted that there had been lapses in protection and that they need to do a better job in keeping up with frequent changes in the fast-paced technology market.

This is the second time this year that Google is under fire by the Federal Trade Commission for privacy-related issues. Shoddy privacy controls in their social networking service, Google Buzz, brought them before the FTC in March to investigate multiple complaints, including one case of a user with a sexually charged name getting access to a young girl’s email contact list. Others complained to the FTC that Google was sharing their private information with third-party sites without prior consent. Google promptly responded by tightening up their security and launching a campaign to brand themselves as a company devoted to user transparency and control.

This issue of websites giving away users’ private information without consent is a major sticking point for congressmen, who are obliged to keep tabs on web-based companies as part of the government’s Internet oversight responsibilities.

But at the heart of the issue is the much-debated question: What constitutes too much government meddling? Some feel that the private sector, led by Internet heavyweights like Google and Amazon, haven’t met reasonable standards for online privacy, warranting governmental intervention.
Regardless, calls for action and concerns over the current state of online privacy policies are coming to the forefront. Potential legislation changes could have a major influence on the global e-commerce industry.

Privacy and Users

Online privacy issues focus on the concept that users simply don’t know when their information is being shared by websites they trust, because they either don’t take the time to read each site’s privacy policy or because the companies don’t abide by those policies.

For example, Facebook shares certain user information with third parties in order to specify advertising within their web domain without announcing it to users each time. Also, when users click a Facebook “Like” button on a third-party site, they are unknowingly granting that party access to their personal information.

Other social websites, such as Twitter, have also had their fair share of privacy issues. During some 2009 attacks, hackers were identifying administrative passwords to the social network site and publishing phony tweets under numerous accounts. Two of the victims included then President-elect Barack Obama and CNN host Rick Sanchez, whose fake tweet read, “i (sic) am high on crack right now might not be coming into work today.” A settlement reached in June between Twitter and the FTC enforced strict security measures to prevent similar breaches. It was the first ever FTC settlement with a social network.

Search engines like Yahoo!, Bing, and Google also collect personal data per each query searched. The companies track users by IP addresses or cookies to improve search results and identify user preferences.

Many independent groups, like the Center for Democracy and Technology and Public Policy Organization, call for direct legislation to enforce stricter security standards on search engines, which could potentially be included in Kerry’s online privacy bill.

Privacy and your Customers

These actions have made privacy issues a paramount concern for Internet businesses that engage in online transactions and want to ensure protection of their customers’ information. To achieve long-term success, an e-commerce business must have the trust of its customers, and improved privacy policies are an essential step in achieving that. So take a look at your privacy policy again, really read through it, and look at your privacy practices for your company. Are you taking the necessary preventative measures to ensure your customer’s data is safe? Are you communicating to customers in an easy to comprehend manner, that their data is safe with you?

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2 Comments

  • Mike Cormack says:

    Good post. I don’t know why you call John Kerry’s aim a “lofty goal” – something needs done and promptly. We’re in a new age, with new standards required.

  • Daniel Meloy says:

    This is a very concise and well done article, Melissa. It’s been a couple years since your having written this, and hopefully you’re still active on this blog to be able to respond to my questions. Do you feel that improvements have been made in the last two years in regards to online privacy? How do you feel people have been reacting to digital invasions of privacy? Do you think that people are even aware of how much of their personal information is available? It seems that trends in advertising on social media outlets have really been increasing, and many advertisements are “personalized” based on search queries or other information you’ve put in online. Looking forward to hearing your thoughts! Thanks!

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