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© Copyright 2001
Jane Inouye, APR
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Last updated: April 30, 2001

That's my business - The Privacy Debate

With the creation of the Internet and online shopping, a new industry was born, collectively known as e-commerce. As consumer awareness of e-commerce grows, many are flocking to the web to take advantage of deep discounts, special offers and promotions. According to a report to Congress by the Federal Trade Commission (FTC), more than 90 million Americans use the Internet on a regular basis and of those, 69 percent or over 60 million people shopped online in the third quarter of 1999. According to the U.S. Census Bureau, "retail e-commerce reached $5.3 billion for the fourth quarter of 1999."

In addition to the added customer convenience, e-commerce proponents like Jerry Casale of the Direct Marketing Association, point to the creation of new jobs and opportunities, many of them small operations who can compete nose to nose with larger organizations in the level playing field of cyberworld.

And just like the old Mom and Pop cornerstores where the proprietor knew each customer and their specific needs, in the on line world, "Information-sharing allows businesses to ascertain customer needs accurately and meet those needs rapidly and efficiently," according to Fred Cate, a professor of law at Indiana University. Cate provided his support for online commerce and data-sharing before the House Energy Subcommittee on March 1, 2001.

Another benefit to consumers is timely health and product safety notices. Cate cites Firestone and Ford Motor Company's use of databases to identity and obtain addresses for people who owned recalled Firestone Tires.

The use of data-gathering by online advertisers is a small price to pay for free services, according to Paul Rubin, a professor of law and economics at Emory University School of Law. Rubin also testified before the House Energy Committee on March 1, 2001. "Advertising revenues support many valuable services that are provided to consumers at no charge" said Rubin. "The amount of free information available on the Internet is truly remarkable and this information is paid for through advertising."

In addition, says Rubin, targeted advertising cuts down on the amount of junk mail that an online consumer needs to sort through, "Targeted advertising reduces the likelihood that consumers will be bothered with information that is of no interest to them, and marketers have an incentive to avoid sending messages to consumers who aren't interested," said Rubin.

With consumer interest and acceptance of e-commerce increasing, the need for additional security and assurances of online security is also increasing. The U.S. Federal Trade Commission (FTC) is the federal agency tapped by Congress to monitor fair trading practices. The FTC has staked out a claim on the Internet to monitor, investigate and control e-commerce under the Federal Trade Commission Act that prohibits unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce. [source: 15 U.S.C. section 45 (a)] The FTC supports U.S. based companies capitalizing on this venture but cautions, "To ensure consumer confidence in this new marketplace and its continued growth, consumer concerns about privacy must be addressed."

An individual's right to control the monitoring and release of personal information is just one of many online privacy concerns. Among other issues are identity theft, credit card fraud, and child protection. Those topics will not be addressed on this web site, since legal initiatives by the FTC, the European Union and self-regulation by online service providers are currently responding to those concerns.