You’re reading your email when you happen across a message from a sender you don’t recognize. The message not only addresses you by your full name but also contains details about you that you don’t recall giving out. Or, you’re browsing the Web and happen across a site that you’ve never visited before but which nonetheless addresses you by your full name and seems to know a thing or two about your buying habits.
It’s happened to all of us. Web companies collect data on their site visitors all the time, using cookies, sales information, or forms that customers knowingly fill out. At present, few laws regulate what information sites collect about visitors and what they can do with that information.
Consumer Mistrust Equals Loss of Revenue
If these practices make you a little leery of making purchases on the Internet, then you’re not alone. An estimated $15 billion in revenue was lost in 2001 alone due to consumers’ lack of confidence in the Internet. In fact, over the years legislation has been introduced several times to restrict what Web sites do with visitor and customer information.
Now the US Senate is trying again, with a new bill intended to protect the privacy of individuals using the Internet. Senator Ernest Hollings of South Carolina is leading the way with a new bill that is slowly gaining form through much discussion and debate.
Hollings claims that the bill will protect basic rights of consumers and increase their confidence in doing business online. Those who support the bill feel that legislation is necessary to the future of Internet commerce. While online businesses are not entirely in favor of the bill, it’s obvious that some legislation is in order if e-business is to succeed.
Keeping Your Secrets
The bill aims to do some very basic things to protect online consumers. First, it would require sites to tell their visitors know what kinds of data they are collecting on them. Second, it would limit what companies can do with information they gather on their visitors and customers.
Before sharing sensitive information with third parties, the bill would require that online companies must first ask consumers to give their permission. Sensitive information includes such items as banking information, Social Security numbers, sexual orientation, health data, and religious and political memberships.
If the bill passes, it would allow consumers to sue for up to $5000 for each incident if they can prove that they have suffered as a result of a company sharing their private data.
What Isn’t Protected
Although it protects some types of information, the bill does not protect others. These unprotected items include addresses, names, purchased items, and browsing histories. This means you’ll still probably receive those bulk emails addressed to you, and you’ll still stumble across sites that call you by name even though you’ve never been there before.
If the possibility of your purchase record with online shops bothers you, or if you’d rather that no one find out about your browsing habits, the bill offers you some recourse. It would also enable consumers on the Web to opt out of information sharing, thus keeping even non-restricted information private. The burden of opting out would lie with the consumer, however.
Businesses Are Not Pleased
Online businesses feel that the bill singles them out, dictating what information they can sell or share, while brick and mortar businesses have no such constraints. These businesses also feel that the bill will expose them unfairly to lawsuits. Most feel that the bill should apply to all businesses to be fair, and not just online businesses.
Businesses are also opposed to the bill’s requirement that they first must share collected data with consumers before sharing it with other companies. They feel this review process will be complicated and cost them money.
Other online companies, like Amazon, feel that the bill is redundant. Amazon argues that it would certainly not do anything to alienate its millions of online customers. Other companies feel that online privacy is already covered in consumer law.
While they do oppose certain aspects of the bill, most online companies are in favor of some type of bill regulating online privacy. They are concerned that the states will create their own bills, further complicating the issue of privacy. If such a bill is passed at the federal level, it will cancel out individual state laws that cover the same ground.
Boosting Confidence for the Future
While neither side is pleased, it’s obvious that something needs to be done to protect consumer privacy. Too much sensitive data about consumers is stored on Web sites for the industry to go completely unregulated. Additionally, many consumers aren’t comfortable sharing any information at all with online companies, much less typing in credit card numbers and sending their financial records off to oblivion.
With some formal regulation, consumers may trust online companies more, and thus help to move away from the Web’s “anything goes” image and replace it with a sturdy foundation upon which to build a solid Internet economy.
Jackie Rosenberger is an editor with murdok
