Internet Privacy and Security: An Examination of Online Retailer Disclosures

Author(s): Anthony D. Miyazaki and Ana Fernandez

Source: Journal of Public Policy & Marketing, Vol. 19, No. 1, Privacy and Ethical Issues in
Database/Interactive Marketing and Public Policy (Spring, 2000), pp. 54-61
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/30000487 .
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I n t e r n e t
P r i v a c y
a n d
S e c u r i t y :
A n Exa mi n a t i on of O n l i n e
R e t a i l e r Di sc l osu r e s
A n t hon y
D.
Mi y a za ki
a n d A n a Fe r n a n d e z
The Fe d e r a l Tr a d e Commi ssi on ha s d e c l a r e d t he
pr i v a c y
a n d
se c u r i t y of
c on su me r
i n f or ma -
t i on t o be t wo
ma jor
i ssu e s t ha t st e m
f r om
t he
r a pi d gr owt h
i n
e -c omme r c e , pa r t i c u l a r l y
i n
t e r ms
of
c on su me r -r e l a t e d c omme r c e on t he I n t e r n e t .
A l t hou gh pr i or
st u d i e s ha v e a sse sse d
on l i n e r e t a i l e r
r e spon se s
t o
pr i v a c y
a n d
se c u r i t y
c on c e r n s wi t h
r e spe c t
t o r e t a i l e r s' d i sc l o-
su r e
of
t he i r
pr a c t i c e s,
t he se st u d i e s ha v e be e n
f a i r l y ge n e r a l
i n t he i r
a ppr oa c he s
a n d ha v e
n ot
e xpl or e d
t he
pot e n t i a l f or
su c h d i sc l osu r e s t o
a f f e c t
c on su me r s. The a u t hor s e xa mi n e
on l i n e r e t a i l e r d i sc l osu r e s
of
v a r i ou s
pr i v a c y -
a n d
se c u r i t y -r e l a t e d pr a c t i c e s f or
17
pr od u c t
c a t e gor i e s. The y
a l so
c ompa r e
t he
pr e v a l e n c e of
d i sc l osu r e s t o a su bse t
of
d a t a
f r om
a c on -
su me r
su r v e y
t o e v a l u a t e
pot e n t i a l r e l a t i on shi ps
be t we e n on l i n e r e t a i l e r
pr a c t i c e s
a n d c on -
su me r
pe r c e pt i on s of
r i sk a n d
pu r c ha se
i n t e n t i on s a c r oss
pr od u c t c a t e gor i e s.
Con su me r s ha v e l i t t l e
pr i v a c y pr ot e c t i on
on t he I n t e r n e t .
- Fe d e r a l Tr a d e Commi ssi on P r e ss R e l e a se ,
Ju n e
4, 1998
The Fe d e r a l Tr a d e Commi ssi on
t od a y
t ol d a Hou se Commi t t e e
t ha t bu si n e ss on t he I n t e r n e t c ou l d
e xpl od e -f r om
$2.6 bi l l i on i n
1996 t o $220 bi l l i on i n
2001--bu t
i f t he t r e n d i s t o
c on t i n u e ,
c on -
su me r s mu st f e e l c on f i d e n t t ha t t he I n t e r n e t i s sa f e f r omf r a u d .
- Fe d e r a l Tr a d e Commi ssi on P r e ss R e l e a se ,
Ju n e
25,
1998
The pa st
d e c a d e ha s wi t n e sse d
r a pi d
e sc a l a t i on of t he
d i f f u si on of t he I n t e r n e t a s a sou r c e of c on su me r e n t e r -
t a i n me n t , e d u c a t i on ,
a n d
ma r ke t pl a c e e xc ha n ge .'
The
gr owt h
of on l i n e
r e t a i l i n g
i n
pa r t i c u l a r
ha s be e n we l l d oc u -
me n t e d ,
a n d e st i ma t e s of a n n u a l r e v e n u e s ha v e r e a c he d $13
bi l l i on f or 1998
(Hol st e i n , Thoma s,
a n d
Voge l st e i n 1998).
For
e xa mpl e ,
t he Na t i on a l R e t a i l Fe d e r a t i on
r e por t s
t ha t 26%
of r e t a i l e r s ha d I n t e r n e t si t e s i n
1998, c ompa r e d
wi t h
on l y
8%
i n 1996
(Hol st e i n , Thoma s,
a n d
Voge l st e i n
1998;
f or si mi l a r
f i gu r e s,
se e Er n st & You n g 1999).
Con su me r
pa t r on a ge
of
su c h si t e s a l so c on t i n u e s t o
gr ow. A c c or d i n g
t o A me r i c a
O n l i n e , c u r r e n t l y
t he
l a r ge st
I n t e r n e t se r v i c e
pr ov i d e r ,
48%
of i t s 14 mi l l i on su bsc r i be r s ha d
pu r c ha se d good s
on l i n e a s
of De c e mbe r 1998
(Hol st e i n , Thoma s,
a n d
Voge l st e i n 1998).
I n
c on ju n c t i on
wi t h t hi s
su r ge
i n e -c omme r c e i s a r e l a t e d
i n c r e a se i n t he a mou n t of i n f or ma t i on ma r ke t e r s c ol l e c t a n d
st or e
r e ga r d i n g
n ot
on l y
c on su me r c ha r a c t e r i st i c s bu t a l so
a c t u a l
shoppi n g
be ha v i or . Be c a u se most f e a t u r e s of on l i n e
ma r ke t i n g
t r a n sa c t i on s c a n be r e c or d e d
e l e c t r on i c a l l y
f or
f u t u r e u se
by ma r ke t e r s,
t he a mou n t of d a t a
ga t he r e d by
ma r ke t e r s i s
gr owi n g
a t
c on st a n t l y a c c e l e r a t i n g
r a t e s.
Un f or t u n a t e l y ,
t hi s
bu r ge on i n g
r e se r v oi r of i n f or ma t i on i s
a c c ompa n i e d by t e c hn ol ogi c a l l y
e n ha n c e d v e r si on s of t wo
pr e v i ou sl y
st u d i e d d a t a ba se
i ssu e s, n a me l y ,
t he
pr i v a c y
a n d
se c u r i t y
of a c c u mu l a t e d c on su me r d a t a . The se i ssu e s a r e of
i n t e r e st t o
pol i c y ma ke r s
wi t h
r e spe c t
t o bot h
pr ot e c t i n g
c on -
su me r s'
r i ght s r e ga r d i n g
t he
pr i v a c y
a n d
se c u r i t y
of t he i r
pe r son a l
a n d f i n a n c i a l i n f or ma t i on a n d
f a c i l i t a t i n g
t he c on -
t i n u e d
gr owt h
of e -c omme r c e a n d t he be n e f i t s i t
br i n gs
t o
c on su me r s a n d bu si n e sse s
(e .g.,
e n ha n c e d e f f i c i e n c i e s of
i n f or ma t i on
e xc ha n ge
a n d
t a r ge t e d c ommu n i c a t i on ).
Be c a u se
ma n y
r e t a i l e r
pr a c t i c e s
ha v e
i mpl i c a t i on s
f or
pr i -
v a c y -
a n d
se c u r i t y -r e l a t e d
i ssu e s,
a
ke y
e l e me n t of
pr opose d
l e gi sl a t i on
i n t hi s a r e a i n v ol v e s t he on l i n e d i sc l osu r e of su c h
pr a c t i c e s.
A s d i sc u sse d
su bse qu e n t l y ,
t he se on l i n e d i sc l o-
su r e s
ma y
be
he l pf u l
i n
pr e v e n t i n g
a n d /or
r e d u c i n g
c on -
su me r c on c e r n s
r e ga r d i n g
I n t e r n e t
pr i v a c y
a n d
se c u r i t y .
A l t hou gh
se v e r a l
pr i or
a c a d e mi c a n d
i n d u st r y
st u d i e s ha v e
e v a l u a t e d c omme r c i a l We b si t e s f or
pr i v a c y -
a n d
se c u r i t y -
r e l a t e d
d i sc l osu r e s,
most ha v e t a ke n a
ge n e r a l a ppr oa c h
a n d
ha v e n ot e xa mi n e d how su c h d i sc l osu r e s
ma y
a f f e c t c on -
su me r be ha v i or . We a sse ss d i sc l osu r e s of on l i n e r e t a i l e r s a t
a mor e d e t a i l e d l e v e l
by d e l i n e a t i n g
t he v a r i ou s l e v e l s of
r e t a i l e r
r e spon se
t o se v e r a l
pr i v a c y
a n d
se c u r i t y
c on c e r n s.
We t he n
c ompa r e
t he
pr e v a l e n c e
of
pr i v a c y -
a n d
se c u r i t y -
r e l a t e d d i sc l osu r e s wi t h a su bse t of r i sk
pe r c e pt i on
a n d
on l i n e
pu r c ha se
i n t e n t i on d a t a f r oma c on su me r
su r v e y .
Fi n a l l y ,
we d i sc u ss
i mpl i c a t i on s
f or on l i n e
r e t a i l i n g.
P r i v a c y
a n d
S e c u r i t y
of Con su me r
I n f or ma t i on
A
ma jor
e t hi c a l i ssu e i n t he c ol l e c t i on a n d
ma n a ge me n t
of
c on su me r i n f or ma t i on i s t he
pr i v a c y
of t ha t i n f or ma t i on
(Bl oom, Mi l n e ,
a n d A d l e r
1994;
Chd n ko
1995;
Foxma n a n d
Ki l c oy n e 1993;
Jon e s
1991). I n d e e d , pr i v a c y
i s of t e n
I A l t hou gh
t he I n t e r n e t i n c l u d e s v a r i ou s mod e s of i n f or ma t i on
e xc ha n ge ,
su c h a s d i r e c t e d c ommu n i c a t i on
(e .g., e -ma i l ), post e d
c ommu n i c a t i on
(e .g.,
Use n e t
gr ou ps),
r e a l -t i me c ommu n i c a t i on
(e .g.,
I n t e r n e t
R e l a y Cha t ),
a n d
f i l e t r a n sf e r
sy st e ms (e .g.,
Fi l e Tr a n sf e r P r ot oc ol ), ou r f oc u s i s t he u se of
t he Wor l d Wi d e We b
(e ,g., home pa ge s,
We b
si t e s)
a s a ma i n or a l t e r n a t i v e
st or e f r on t t ha t a l l ows f or i n t e r a c t i v e c on su me r -i n i t i a t e d i n f or ma t i on
e xc ha n ge (se e
Hof f ma n a n d Nov a k
1996).
Thi s i n f or ma t i on
e xc ha n ge ma y
r a n ge
f r omba si c c ommu n i c a t i on s
r e ga r d i n g pr od u c t s
a n d
phy si c a l
r e t a i l
ou t l e t s t o
c ompl e t e l y
a u t oma t e d
pu r c ha se
a n d
shi pme n t pr oc e d u r e s.
A NTHO NY D. MI YA ZA KI i s A ssi st a n t P r of e ssor of
Ma r ke t i n g,
a n d
A NA FER NA NDEZ i s a r e se a r c h a ssi st a n t , S c hool of Bu si n e ss
A d mi n i st r a t i on , Un i v e r si t y
of Mi a mi . The a u t hor s
gr a t e f u l l y
a c kn owl e d ge
c on st r u c t i v e c omme n t s f r omt he
spe c i a l
i ssu e e d i t or
a n d t he
a n on y mou s JP P &M
r e v i e we r s.
54 Jou r n a l of P u bl i c
P ol i c y
&
Ma r ke t i n g
Vol . 19 (1)
S pr i n g
2000, 54-61
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All use subject to JSTOR Terms and Conditions
Jou r n a l of P u bl i c
P ol i c y
&
Ma r ke t i n g
55
v i e we d ,
e v e n f r oma
l e ga l pe r spe c t i v e ,
a s a d i st i n c t c on -
su me r
r i ght (Good wi n 1991).
Wi t h
r e spe c t
t o on l i n e
shop-
pi n g,
r e c e n t r e se a r c h
by
R ohma n d Mi l n e (1998)
d e mon -
st r a t e s t ha t a
ma jor i t y
of I n t e r n e t u se r s-bot h t hose who
ha v e ma d e on l i n e
pu r c ha se s
a n d t hose who ha v e n ot -ha v e
se v e r a l c on c e r n s
r e ga r d i n g
i n f or ma t i on
pr i v a c y , i n c l u d i n g
i ssu e s r e l a t e d t o t he
a c qu i si t i on
a n d d i sse mi n a t i on of c on -
su me r d a t a .
I n
c on ju n c t i on
wi t h i n f or ma t i on
pr i v a c y , se c u r i t y (pa r t i c -
u l a r l y
i n f or ma t i on t he f t a n d
mi su se )
a l so ha s be e n l a be l e d a
ke y
c on c e r n of e -c omme r c e
by
v a r i ou s
gov e r n me n t
a n d c on -
su me r
or ga n i za t i on s (e .g., Br i n kl e y 1998;
Con su me r
R e por t s
O n l i n e
1998; Cy be r spa c e
La w I n st i t u t e
1999;
Fe d e r a l Tr a d e
Commi ssi on
1998a ;
Na t i on a l Con su me r s
Le a gu e 1999)
a s
we l l a s
ma n y
a r t i c l e s i n t r a d e
pu bl i c a t i on s
a n d t he
popu l a r
pr e ss (e .g.,
Br i on e s
1998;
CNN 1999;
Fol ke r s
1998; Ju d ge
1998;
Ma c hr on e
1998;
R ot hf e d e r
1997).
The se t wo i ssu e s
a r e
i n t e r r e l a t e d ,
be c a u se whe n t he
pr ot e c t i on
of c on su me r
pr i v a c y
i s
c on si d e r e d ,
t he se c u r e
st or a ge
a n d t r a n smi ssi on of
c on su me r i n f or ma t i on c on t a i n e d i n
or ga n i za t i on a l
d a t a ba se s
a l so a r e v i e we d a s t he
r e spon si bi l i t i e s
of
pa r t i c i pa n t or ga n i -
za t i on s
(Fe d e r a l
Tr a d e Commi ssi on
1998a ;
Jon e s
1991).
Fr oma
pu bl i c pol i c y pe r spe c t i v e ,
c on su me r s a r e a ssu me d
t o ha v e c e r t a i n
r i ght s
t o
pr i v a c y
a n d
se c u r i t y
of t he i r i n f or -
ma t i on whe n
c on d u c t i n g
on l i n e t r a n sa c t i on s.
P u bl i c i t y
r e ga r d i n g
t he se i ssu e s ha s
spa r ke d
se v e r a l c a l l s f or
l e gi sl a t i on
(se e Bl oom, Mi l n e ,
a n d A d l e r
1994;
Mi l n e
1997)
t ha t
v a r y
a s
t o t he i r
r e qu i r e me n t s
f or
c ha n ge s
i n
pr a c t i c e s
v e r su s
si mpl e
d i sc l osu r e of
pr a c t i c e s. P r e su ma bl y , c ha n ge s
i n on l i n e r e t a i l e r
pr a c t i c e s
t ha t a r e d e e me d c on su me r
f r i e n d l y
wi l l bu i l d on l i n e
shoppe r s'
c on f i d e n c e wi t h
r e spe c t
t o t he i r f u t u r e
pu r c ha si n g
a c t i v i t i e s.
Con v e r se l y , i n c r e a si n g
me d i a
c ov e r a ge
of t he se
i ssu e s
ma y
d e c r e a se c on su me r c on f i d e n c e
by hi ghl i ght i n g
t he
r i sks i n v ol v e d i n on l i n e
shoppi n g
a n d t hu s d e t e r f u l l c on -
su me r
a d opt i on
of e -c omme r c e
(Ju d ge 1998). The r e f or e ,
t he
r ol e of
pol i c y ma ke r s
i s t wof ol d : t o f a c i l i t a t e t he
a d opt i on
of
on l i n e
shoppi n g
wi t h i t s
pr opose d
ma r ke t e f f i c i e n c i e s a n d
si mu l t a n e ou sl y
t o
pr ot e c t
a n d i n f or mc on su me r s
by ma ki n g
r i sks of I n t e r n e t c omme r c e kn own t o a l l
pot e n t i a l
a n d a c t i v e
pa r t i c i pa n t s.
Fr oma
ma r ke t i n g pe r spe c t i v e ,
t he d i sc l osu r e of
on l i n e r e t a i l e r
pr a c t i c e s ma y
se r v e bot h t o i n f or mc on su me r s
a bou t r i sks of on l i n e
pr a c t i c e s
a n d t o r e d u c e c on su me r r i sk
pe r c e pt i on s
a n d i n c r e a se
pu r c ha se
be ha v i or .
O n l i n e Di sc l osu r e of
P r i v a c y -
a n d
S e c u r i t y -R e l a t e d
P r a c t i c e s
A ppr opr i a t e
on l i n e r e t a i l e r
pr a c t i c e s r e ga r d i n g t he pr i v a c y
a n d se c u r i t y of c on su me r i n f or ma t i on a r e t he
t opi c
of mu c h
r e c e n t l y pr opose d
or e n a c t e d
l e gi sl a t i v e me a su r e s. For e xa m-
pl e , pr opose d r e gu l a t i on , su c h a s t he Con su me r I n t e r n e t
P r i v a c y P r ot e c t i on A c t of 1999 (H.R . 313), t he O n l i n e
P r i v a c y P r ot e c t i on A c t of 1999 (S . 809), a n d t he I n box
P r i v a c y
A c t of 1999 (S . 759), a l l e xa mi n e a t l e a st on e a spe c t
of on l i n e
a c qu i si t i on a n d d i sc l osu r e of c on su me r i n f or ma t i on .
The
r e c e n t l y e n a c t e d Chi l d r e n 's O n l i n e P r i v a c y P r ot e c t i on
A c t of 1998 (16 C.F.R . P a r t 312), whi c h
a ppl i e s
t o c hi l d r e n
y ou n ge r t ha n 13 y e a r s of
a ge ,
i s e v e n mor e r e st r i c t i v e i n t he
d i sc l osu r e a n d c on su me r c on t a c t
r e qu i r e me n t s
t ha t
ma y
be
i mpose d on c e r t a i n
t y pe s
of We b si t e s. S i mi l a r
l e gi sl a t i on ha s
be e n pr opose d r e ga r d i n g I n t e r n e t
se c u r i t y i ssu e s su c h a s t he
E-P r i v a c y
A c t
(S . 2067)
a n d t he S e c u r e P u bl i c Ne t wor ks A c t
(S . 909),
bot h of whi c h d e a l wi t h
e n c r y pt i on r i ght s
a n d st a n -
d a r d s
r e ga r d i n g
d ome st i c a n d i n t e r n a t i on a l e -c omme r c e .
I n
ge n e r a l , pol i c y ma ke r s
a r e
t e n d i n g
t owa r d
r e gu l a t i on s
t ha t ma ke on l i n e r e t a i l e r s
r e spon si bl e
f or
d i sc l osi n g
c on -
su me r i n f or ma t i on
a c qu i si t i on , u sa ge ,
a n d
pr ot e c t i on pr a c -
t i c e s. I n
f a c t ,
d i sc l osu r e of on l i n e i n f or ma t i on
pr i v a c y pr a c -
t i c e s ha s be e n t he
su bje c t
of se v e r a l r e c e n t Fe d e r a l Tr a d e
Commi ssi on
(FTC) i n v e st i ga t i on s, i n c l u d i n g
on e i n Ma r c h
1998 whe r e i n mor e t ha n 90% of e xa mi n e d We b si t e s
(mor e
t ha n 1400 i n
t ot a l )
c ol l e c t e d some
t y pe
of
pe r son a l
i n f or ma -
t i on f r omv i si t or s t o t he i r
pa ge s.
I n c on t r a st , on l y
14% of t he
674 c omme r c i a l We b si t e s e xa mi n e d
pr ov i d e d a n y t y pe
of
n ot i f i c a t i on
r e ga r d i n g
i n f or ma t i on c ol l e c t i on
pr a c t i c e s,
a n d
on l y
2%
pr ov i d e d c ompr e he n si v e pr i v a c y pol i c i e s (FTC
1998d ;
se e a l so FTC
1999).
A mor e r e c e n t e xa mi n a t i on
by
Cu l n a n
(1999a )
f i n d s t ha t 65.9% of t he 361 ".c om" We b
si t e s e xa mi n e d
pr ov i d e d
a t l e a st on e
t y pe
of
pr i v a c y
d i sc l o-
su r e
(se e
Cu l n a n
1999b).
O n l i n e R e t a i l e r
R e spon se s
t o
P r i v a c y
Con c e r n s
Con si d e r i n g
t he
pr i v a c y
a n d
se c u r i t y
i ssu e s r a i se d
by gov -
e r n me n t a n d c on su me r
gr ou ps,
we n ow ou t l i n e t hr e e
ke y pr i -
v a c y
c on c e r n s a n d t hr e e on l i n e r e t a i l e r me t hod s of
d e a l i n g
wi t h
pe r c e i v e d se c u r i t y pr obl e ms (Ta bl e
I
pr e se n t s
t he v a r i -
ou s
t y pe s
of on l i n e r e t a i l e r
r e spon se s
t o
pr i v a c y
a n d
se c u r i t y
i ssu e s).
We t he n d i sc u ss how t he d i sc l osu r e of su c h i n f or -
ma t i on
ma y
r e l a t e t o c on su me r
pe r c e pt i on s
a n d i n t e n t i on s.
O n l i n e Cu st ome r
I d e n t i f i c a t i on
O f c on c e r n t o
pol i c y ma ke r s
i s whe t he r a n d t o wha t
d e gr e e
a n
on l i n e r e t a i l e r c ol l e c t s
pe r son a l
i n f or ma t i on f r omWe b si t e
c u st ome r s
(se e
Cu l n a n
1995, 1999a ). A l t hou gh
se v e r a l of
t he a f or e me n t i on e d
l e gi sl a t i v e
e f f or t s a d v oc a t e f u l l d i sc l o-
su r e of i n f or ma t i on
a c qu i si t i on a c t i v i t i e s,
most i n f or ma t i on
pr ov i d e d
t o on l i n e bu si n e sse s i s d on e
kn owi n gl y by
c on -
su me r s. The r e
e xi st s, howe v e r ,
t he
a bi l i t y
f or on l i n e r e t a i l e r s
t o
i d e n t i f y
a n d
ga t he r
i n f or ma t i on on
r e pe a t
v i si t or s t o a We b
si t e
by pl a c i n g
c od e d i n f or ma t i on
(c a l l e d "c ooki e s")
on
c ompu t e r
u se r s' ha r d d r i v e s wi t hou t t he i r
kn owl e d ge
(S a mu e l
a n d S c he r
1999).
Thi s i n f or ma t i on
ma y
be c om-
bi n e d wi t h
pr e v i ou sl y pr ov i d e d pe r son a l
i n f or ma t i on t o t r a c k
pa t t e r n s
of We b si t e
e xpl or a t i on
a n d i n f or ma t i on se a r c h
be ha v i or .2 The c on c e a l e d n a t u r e of t hi s i n f or ma t i on
a c qu i si -
t i on
hi ghl i ght s
t he
i mpor t a n c e
f or on l i n e r e t a i l e r s t o d i sc l ose
t he i r u se of c ooki e s or si mi l a r
t e c hn ol ogi e s
so t ha t c u st ome r s
wi l l kn ow t o wha t
d e gr e e t he y
wi l l be i d e n t i f i e d whe n
t he y
r e t u r n t o a
pa r t i c u l a r
We b si t e .
S u r pr i si n gl y , n on e of t he
a f or e me n t i on e d
l e gi sl a t i on spe c i f i c a l l y
a d d r e sse s t hi s i ssu e .
O n l i n e r e t a i l e r s
ma y
of f e r v a r i ou s l e v e l s of
r e spon se s t o
c u st ome r i d e n t i f i c a t i on i ssu e s. The most e xt r e me
posi t i on
2A l t hou gh I n t e r n e t u se r s ma y a d ju st t he i r We b br owse r s t o r e je c t a l l or
c e r t a i n t y pe s of c ooki e s or t o wa r n t he mbe f or e a c ooki e i s pl a c e d on t he i r
ha r d d r i v e , ma n y c on su me r s l a c k kn owl e d ge of t hi s f u n c t i on . Fu r t he r mor e ,
se v e r a l on l i n e pr od u c t or d e r i n g sy st e ms r e qu i r e t he u se of c ooki e s t o t r a c k
se l e c t e d pr od u c t s so t ha t t he pu r c ha se pr oc e ss c a n be c a r r i e d ou t . The u se
of c ooki e s c a n e n a bl e a n I n t e r n e t u se r t o br owse t o a pa r t i c u l a r si t e a n d
a u t oma t i c a l l y be pr e se n t e d wi t h i n f or ma t i on u n i qu e l y pr e f e r r e d by t ha t
u se r , whe t he r by c on sc i ou s c hoi c e (i .e ., se l e c t e d st oc k qu ot e s or n e ws t op-
i c s) or by wa y of ma r ke t e r a n a l y si s of on l i n e se a r c h a n d pu r c ha se pa t t e r n s
(i .e ., on l i n e c a t a l og of f e r i n gs or ba n n e r a d v e r t i si n g t ha t c or r e spon d t o pr e -
d e t e r mi n e d u se r i n t e r e st s).
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56 I n t e r n e t
P r i v a c y
a n d
S e c u r i t y
Ta bl e 1. O n l i n e R e t a i l e r
R e spon se s
t o
P r i v a c y
a n d
S e c u r i t y
I ssu e s
P r i v a c y
I ssu e sa
O n l i n e c u st ome r i d e n t i f i c a t i on
(i n c l u d i n g
u se of
c ooki e s)
No
pol i c y
st a t e me n t
r e ga r d i n g
t hi s i ssu e
I d e n t i f i e s c u st ome r whe n c u st ome r
l ogs
on t o si t e
I d e n t i f i e s c u st ome r whe n c u st ome r
l ogs
on t o si t e u n l e ss c u s-
t ome r
opt s
ou t
I d e n t i f i e s c u st ome r
on l y
i f c u st ome r
r e qu e st s
su c h i d e n t i f i c a -
t i on
(e .g.,
"R e me mbe r
n a me /pa sswor d ")
Doe s n ot
i d e n t i f y
c u st ome r whe n c u st ome r
l ogs
on t o si t e
Un sol i c i t e d c u st ome r c on t a c t s
No
pol i c y
st a t e me n t
r e ga r d i n g
t hi s i ssu e
Use s i n f or ma t i on t o ma ke u n sol i c i t e d c u st ome r c on t a c t s
Use s i n f or ma t i on t o ma ke u n sol i c i t e d c u st ome r c on t a c t s u n l e ss
c u st ome r
opt s
ou t
Use s i n f or ma t i on t o ma ke u n sol i c i t e d c u st ome r c on t a c t s
on l y
i f
r e qu e st e d by
c u st ome r
Use s i n f or ma t i on
on l y
f or i n t e r n a l
pu r pose s
wi t hou t
c on t a c t i n g
c u st ome r
Doe s n ot c ol l e c t
a n y
i n f or ma t i on
Di st r i bu t i on of c u st ome r i n f or ma t i on t o t hi r d
pa r t i e s
No
pol i c y
st a t e me n t
r e ga r d i n g
t hi s i ssu e
S ha r e s i n f or ma t i on wi t h ot he r
c ompa n i e s
Ca r e f u l l y (c a u t i ou sl y )
sha r e s i n f or ma t i on wi t h ot he r
c ompa n i e s
S ha r e s i n f or ma t i on wi t h ot he r
c ompa n i e s
u n l e ss c u st ome r
opt s
ou t
Ca r e f u l l y (c a u t i ou sl y )
sha r e s i n f or ma t i on wi t h ot he r
c ompa n i e s
u n l e ss c u st ome r
opt s
ou t
S ha r e s i n f or ma t i on wi t h ot he r
c ompa n i e s on l y
i f
r e qu e st e d by
c u st ome r
Doe s n ot sha r e i n f or ma t i on wi t h ot he r
c ompa n i e s
Doe s n ot c ol l e c t
a n y
i n f or ma t i on
S e c u r i t y
I ssu e s
S e c u r e t r a n sa c t i on s
O n l i n e c r e d i t c a r d
se c u r i t y gu a r a n t e e s
A l t e r n a t i v e
pa y me n t opt i on s
a R e t a i l e r
r e spon se s
f or
pr i v a c y
i ssu e s a r e or d e r e d f r oml e a st f a v or a bl e t o
most f a v or a bl e f r oma c on su me r
pr i v a c y pe r spe c t i v e .
(pe r ha ps pr e f e r r e d by
st r i c t
pr i v a c y a d v oc a t e s)
i s n e v e r t o
i d e n t i f y
c u st ome r s whe n
t he y
a c c e ss a si t e .
A l t e r n a t i v e l y ,
a
c on su me r
opt -i n
c hoi c e wou l d a l l ow su c h i d e n t i f i c a t i on t o
oc c u r
on l y
i f t he c u st ome r
e xpl i c i t l y r e qu e st s
su c h a
pr a c t i c e
(e .g., c he c ki n g
a box t ha t a sks t he on l i n e r e t a i l e r t o
"r e me m-
be r my n a me a n d
pa sswor d "). Ne ga t i v e opt i on ,
or opt -ou t ,
c hoi c e s, whi c h ha v e be e n su gge st e d by
se v e r a l l e gi sl a t i v e
e f f or t s a n d a r e of t e n pr a c t i c e d
i n ma i l -or d e r ma r ke t i n g
(Mi l n e 1997), e n a bl e c on su me r s t o pr ohi bi t
a u t oma t i c i d e n -
t i f i c a t i on by e i t he r c he c ki n g a n opt -ou t
box d u r i n g
i n i t i a l
r e gi st r a t i on
or se pa r a t e l y c on t a c t i n g
t he on l i n e r e t a i l e r a n d
r e qu e st i n g
t ha t su c h i d e n t i f i c a t i on d oe s n ot oc c u r . A n e v e n
l e ss d e si r a bl e l e v e l of r e spon se
f r oma c on su me r pr i v a c y
pe r spe c t i v e
wou l d be c on st a n t i d e n t i f i c a t i on of c on su me r s
a s t he y a c c e ss t he We b si t e , wi t hou t a n opt -ou t
a l t e r n a t i v e .
Fi n a l l y ,
t he r e spon se
most l i ke l y
se e n by pol i c y ma ke r s
a s
t he l e a st f a v or a bl e i s t he l a c k of
a n y
c ommu n i c a t i on t o t he
I n t e r n e t u se r
r e ga r d i n g
t he on l i n e c u st ome r i d e n t i f i c a t i on
pr a c t i c e s
of t he
pa r t i c u l a r
r e t a i l e r
(Br i n kl e y
1998; FTC
1998b).
Un sol i c i t e d Cu st ome r Con t a c t s
The
pr a c t i c e
of
c ol l e c t i n g
c on su me r i n f or ma t i on f or on e
pu r pose
a n d t he n
u si n g
t ha t i n f or ma t i on t o ma ke u n sol i c i t e d
c on t a c t s ha s
l on g
be e n a
pr i v a c y
i ssu e
(se e
Good wi n 1991;
Mi l n e
1997).
Wi t h
r e spe c t
t o t he
I n t e r n e t ,
t he
ma jor i t y
of
l e gi sl a t i v e
e f f or t s a d d r e ss u n sol i c i t e d c u st ome r c on t a c t s a s a
c ommon c on c e r n f or c on su me r s a n d t hu s on e of t wo
ke y
i ssu e s f or
r e gu l a t i on .
A s wi t h on l i n e c u st ome r i d e n t i f i c a -
t i on , r e spon se s
t o t he u n sol i c i t e d c on t a c t c on c e r n s
v a r y
a s t o
t he l e v e l of
pr i v a c y pr ot e c t i on t he y
of f e r . A t t he most f a v or -
a bl e l e v e l
(f r om
a
pr i v a c y pe r spe c t i v e ),
on l i n e r e t a i l e r s
wou l d n ot c ol l e c t
a n y
i n f or ma t i on f r omc on su me r s,
t hu s
pr ohi bi t i n g
t he r e t a i l e r s f r om
ma ki n g
u n sol i c i t e d c on t a c t s. A
si mi l a r si t u a t i on wou l d i n v ol v e t he c ol l e c t i on of
pe r son a l l y
i d e n t i f y i n g
i n f or ma t i on c ombi n e d wi t h t he
pr e se n c e
of a
pol i c y
t ha t t he i n f or ma t i on wou l d n ot be u se d f or
c on t a c t i n g
c u st ome r s.
O pt -i n
a n d
opt -ou t pol i c i e s r e pr e se n t
t he n e xt
t wo l e v e l s of
r e spon se ;
t he l a t t e r i s t he most c ommon
r e spon se
i n c u r r e n t d i r e c t
ma r ke t i n g
a c t i v i t i e s
(se e
Mi l n e
1997).3
Cu st ome r
I n f or ma t i on
Di st r i bu t i on
The ot he r
ke y r e gu l a t or y
i ssu e i s t he
d e gr e e
t o whi c h c u st ome r
i n f or ma t i on wi l l be sha r e d
(i .e .,
r e n t e d or
sol d )
t o t hi r d
pa r t i e s
t ha t ha v e
ma r ke t i n g-r e l a t e d
i n t e r e st s i n su c h d a t a .
Thou gh
a n
i mpor t a n t
i ssu e i n mu c h
pr i v a c y
r e se a r c h
(e .g.,
Cu l n a n 1995;
Good wi n 1991;
Mi l n e
1997),
t hi s c on c e r n ha s
ju st be gu n
t o
r e c e i v e i n t e r e st wi t h
r e spe c t
t o on l i n e
shoppi n g, pa r t i c u l a r l y
i n
l i ght
of t he a f or e me n t i on e d
l e gi sl a t i v e
e f f or t s. P ossi bl e on l i n e
r e t a i l e r
r e spon se s
t o i n f or ma t i on d i st r i bu t i on c on c e r n s a r e
si mi l a r t o t hose l i st e d
pr e v i ou sl y
f or c u st ome r c on t a c t s
(i .e .,
n ot
c ol l e c t i n g
i n f or ma t i on a n d
opt -i n
a n d
opt -ou t c hoi c e s).
O n e
a spe c t
of i n f or ma t i on d i sc l osu r e t ha t d i f f e r s f r omt he c u s-
t ome r c on t a c t i ssu e i s t ha t
c ompa n i e s ma y pr ov i d e
a ssu r a n c e
t ha t
t he y
wi l l sha r e i n f or ma t i on
se l e c t i v e l y ,
t ha t
i s,
wi t h ot he r
pa r t i e s
t ha t wi l l
(1)
ma ke
of f e r i n gs
t o t he c on su me r t ha t wi l l
be of i n t e r e st t o t he c on su me r a n d /or
(2)
u se
r e spon si bl y
t he
i n f or ma t i on t ha t i s sha r e d . The se l e v e l s of
r e spon se
wou l d
pr e -
su ma bl y
be f a v or e d
by
c on su me r s ov e r mor e
ge n e r a l
st a t e -
me n t s of
sha r i n g
i n f or ma t i on . I n
su ppor t
of t hi s,
Mi l n e
(1997)
f i n d s t ha t c on su me r s a r e mor e
wi l l i n g
t o a l l ow t he t r a n sf e r of
pe r son a l
i n f or ma t i on whe n
r e spon se
c a r d s st a t e t ha t
pe r son a l
i n f or ma t i on wi l l be pr ov i d e d
t o "ma i l -or d e r bu si n e sse s t ha t
ha v e pr od u c t s
or se r v i c e s t ha t we t hi n k wi l l be of i n t e r e st t o
y ou "
r a t he r t ha n whe n r e spon se
c a r d s st a t e t ha t t he i n f or ma -
t i on
wi l l be
pr ov i d e d me r e l y
t o ma i l -or d e r bu si n e sse s.
O n l i n e R e t a i l e r R e spon se s
t o S e c u r i t y
Con c e r n s
A ke y se c u r i t y
c on c e r n i n v ol v e d i n on l i n e shoppi n g pe r t a i n s
t o u n a u t hor i ze d t hi r d -pa r t y
a c c e ss of c on su me r s' pe r son a l
3A l t hou gh
c on su me r s
ma y ha v e c e r t a i n r i ght s t o opt
ou t of a c u st ome r
c on t a c t
pr oc e d u r e r e ga r d l e ss
of t he d i sc l osu r e of su c h
a
pol i c y ,
we f oc u s on
d i sc l osu r e be c a u se ma n y c on su me r s ha v e be e n shown t o be u n a wa r e of
t he i r r i ght s wi t h r e spe c t t o d a t a ba se pr i v a c y i ssu e s a n d pa r t i c u l a r l y opt -ou t
pr oc e d u r e s (se e R ohma n d Mi l n e 1998).
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All use subject to JSTOR Terms and Conditions
Jou r n a l
of P u bl i c
P ol i c y
&
Ma r ke t i n g
57
a n d f i n a n c i a l i n f or ma t i on . Con su me r c on c e r n s
r e ga r d i n g
t hi s i ssu e a r e
hi ghl i ght e d
be c a u se of
pu bl i c i ze d se c u r i t y
br e a c he s of on l i n e r e t a i l e r d a t a ba se i n f or ma t i on ,
su c h a s
Ha l l ma r k's
d i sc ov e r y
t ha t c on su me r s'
pe r son a l
e l e c t r on i c
gr e e t i n g
c a r d
me ssa ge s (on
wha t wa s
l i ke l y t hou ght
of a s a
se c u r e
si t e )
we r e
a c t u a l l y
a v a i l a bl e t o
a n y on e u si n g
t he
si t e 's se a r c h
e n gi n e (CNN 1999).
Gi v e n t ha t t he
pr e se n c e
of
on l i n e
se c u r i t y
c on c e r n s
ma y
c u r t a i l
pu r c ha se
be ha v i or ,
t he
a l l e v i a t i on of t he se c on c e r n s wou l d se e mt o be a
ke y
f oc u s
of on l i n e r e t a i l e r s. We n ow d i sc u ss t hr e e
pot e n t i a l
on l i n e
c ommu n i c a t i on
pr a c t i c e s pr e su ma bl y d e si gn e d
t o r e d u c e
c on su me r s'
se c u r i t y
c on c e r n s.
S e c u r e Tr a n sa c t i on s
The
pr ot e c t i on
of t he on l i n e t r a n sa c t i on of i n f or ma t i on
(whe t he r pe r son a l
or
f i n a n c i a l )
i s a
t e c hn ol ogi c a l
i ssu e . Ye t
I n t e r n e t
se c u r i t y
a d v oc a t e s
su gge st
t ha t r e t a i l e r s
pr ov i d e
c on su me r s wi t h i n f or ma t i on
r e ga r d i n g
t he
sa f e gu a r d i n g
of
t r a n sa c t i on s,
e i t he r wi t h
c l e a r l y
l a be l e d "se c u r e se r v e r s" or
pr omi n e n t
l i n ks t o
se c u r i t y pol i c i e s (Con su me r R e por t s
O n l i n e
1998; FTC 1998a ). Thu s,
i n a d d i t i on t o t he a c t u a l
pr ov i si on
of se c u r e t r a n sa c t i on
t e c hn ol ogy (e .g.,
se c u r e
se r v e r s,
se c u r e soc ke t s
l a y e r e n c r y pt i on ),
on l i n e r e t a i l e r s
ha v e be e n c ou n se l e d t o
a ssu a ge
t he c on c e r n s of c on su me r s
by c ommu n i c a t i n g
t he
se c u r i t y
of t he i r on l i n e i n f or ma t i on
sy st e ms.
O n l i n e Cr e d i t Ca r d
S e c u r i t y
Gu a r a n t e e s
To d i mi n i sh c on su me r
se c u r i t y
c on c e r n s
(se e
Na t i on a l
Con su me r s
Le a gu e 1999)
e v e n
f u r t he r ,
some on l i n e r e t a i l e r s
ha v e
i mpl e me n t e d
c on su me r
gu a r a n t e e s a ga i n st
c r e d i t c a r d
f r a u d t ha t
ma y
oc c u r a s a r e su l t of on l i n e
d i v u l ge n c e
of c r e d i t
c a r d i n f or ma t i on
(e .g.,
A ma zon .c om's sa f e
shoppi n g gu a r -
a n t e e or Wa l -ma r t 's on l i n e
se c u r i t y gu a r a n t e e ).
The se
gu a r -
a n t e e s,
whi c h some t i me s r e f e r e n c e t he Fa i r Cr e d i t
Bi l l i n g
A c t
(15
U.S .C.
1601-67), t y pi c a l l y pl e d ge
r e i mbu r se me n t
of u n a u t hor i ze d
c ha r ge s
ma d e t o a c r e d i t c a r d i f su c h
c ha r ge s
r e su l t e d f r om
pu r c ha si n g t hr ou gh
t he on l i n e r e t a i l e r 's se c u r e
sy st e m.
Be c a u se t he ma xi mu mr e t a i l e r
l i a bi l i t y
f or su c h a
gu a r a n t e e
wou l d
t y pi c a l l y
be $50 a n d be c a u se c a se s of
on l i n e c r e d i t c a r d f r a u d f r om
se c u r i t y
br e a c he s a r e
r e por t e d
a s
v e r y i n f r e qu e n t ,
t hi s r e t a i l
pr a c t i c e
wou l d
l i ke l y
se r v e a s a
r e a son a bl e me t hod of
a l l a y i n g
c on su me r c on c e r n s.
A l t e r n a t i v e
P a y me n t O pt i on s
A
ke y
c on su me r c on c e r n of on l i n e
shoppi n g
i s t he
i n t e r c e p-
t i on of c r e d i t c a r d i n f or ma t i on (Na t i on a l Con su me r s Le a gu e
1999). A v i a bl e r e t a i l e r r e spon se
wou l d be t he
pr ov i si on
of
a l t e r n a t i v e pa y me n t (or or d e r i n g) opt i on s
t ha t e n a bl e t he
on l i n e c u st ome r t o shi f t c e r t a i n c ompon e n t s of t he t r a n sa c -
t i on t o t he I n t e r n e t (e .g.,
i n f or ma t i on a c qu i si t i on , or d e r i n g)
whi l e st i l l c on d u c t i n g
mor e v u l n e r a bl e c ompon e n t s (e .g.,
a c t u a l pa y me n t )
of f l i n e . S e v e r a l on l i n e r e t a i l e r s of f e r c on -
su me r s t he oppor t u n i t y
t o
c ompl e t e
a n d su bmi t or d e r s
t hr ou gh t he I n t e r n e t , c ombi n e d wi t h
t e l e phon e
or f a c si mi l e
t r a n smi ssi on of c r e d i t c a r d i n f or ma t i on . S ome We b si t e s a l so
su gge st ma i l i n g, f a xi n g, t e l e phon i n g,
or e -ma i l i n g bot h t he
or d e r a n d t he pa y me n t
i f t he c on su me r ha s c on c e r n s ov e r a
c ompl e t e We b si t e t r a n sa c t i on . O f f e r i n g
a l t e r n a t i v e
pa y me n t
me t hod s i s n ot se e n a s a n i d e a l r e t a i l e r r e spon se , be c a u se t he
e f f i c i e n c i e s of I n t e r n e t
or d e r i n g
a n d
pa y me n t
a r e sa c r i f i c e d
a s t he
pe r c e n t a ge
of of f l i n e
pu r c ha se
t r a n sa c t i on s i n c r e a se s.
Thu s, a l t hou gh
t hi s
pr a c t i c e ma y
r e d u c e c on su me r c on c e r n ,
i t
ma y
a l so r e d u c e a c t u a l on l i n e
pu r c ha si n g.
P r i v a c y
a n d
S e c u r i t y
Di sc l osu r e s a n d Con su me r
Be ha v i or
A l t hou gh
e f f or t s t o
i mpl e me n t ma n d a t or y
d i sc l osu r e of t he
pr e v i ou s
i ssu e s a n d
pr a c t i c e s
a r e ba se d on a c on su me r
pr i -
v a c y pe r spe c t i v e ,
t he d i sc l osu r e of
pr i v a c y
a n d
se c u r i t y
i n f or ma t i on
ma y
a l so be u se f u l f r oma
ma r ke t i n g st r a t e gy
pe r spe c t i v e . S pe c i f i c a l l y ,
i f c on c e r n s a bou t
pr i v a c y
a n d
se c u r i t y
i ssu e s t e n d t o r a i se r i sk
pe r c e pt i on s
a n d l owe r
pu r -
c ha se
l i ke l i hood s, hi ghe r
l e v e l s of
pr i v a c y -
a n d
se c u r i t y -
r e l a t e d d i sc l osu r e
ma y
be u se f u l i n
st e mmi n g
su c h c on c e r n s.
Thi s,
i n
t u r n ,
wou l d be
e xpe c t e d
t o r e su l t i n l owe r c on su me r
r i sk
pe r c e pt i on s
a n d
hi ghe r pu r c ha se
l i ke l i hood s. Thu s,
i t i s
e xpe c t e d
t ha t t he
pe r c e n t a ge
of We b si t e s wi t h
(1) pr i v a c y -
r e l a t e d st a t e me n t s a n d
(2) se c u r i t y -r e l a t e d
st a t e me n t s f or a
pa r t i c u l a r shoppi n g c a t e gor y
wi l l be
n e ga t i v e l y
r e l a t e d t o
c on su me r r i sk
pe r c e pt i on s r e ga r d i n g
on l i n e
shoppi n g
i n t ha t
c a t e gor y
a n d wou l d be
posi t i v e l y
r e l a t e d t o c on su me r on l i n e
pu r c ha se
i n t e n t i on s i n t ha t
c a t e gor y .
Me t hod a n d R e su l t s
Exa mi n a t i on of We b S i t e s
We b si t e s f or 381 c omme r c i a l
e n t e r pr i se s
ba se d i n t he Un i t e d
S t a t e s a n d
t a r ge t i n g
U.S . c on su me r s we r e v i si t e d i n t he f i r st
t wo mon t hs of 1999 a n d we r e e xa mi n e d wi t h
r e spe c t
t o t he
pr i v a c y
a n d
se c u r i t y
i ssu e s r a i se d
pr e v i ou sl y .
The We b si t e s
we r e
r a n d oml y sa mpl e d
f r omt hr e e
popu l a r shoppi n g por t a l s
(e xc i t e .c om, y a hoo.c om,
a n d
n e t sc a pe .c om),
a n d e a c h si t e
wa s
pl a c e d
i n t o on e of 17
shoppi n g c a t e gor i e s
t ha t
a ppe a r e d
t o be t he ma i n
e mpha si s
of e a c h si t e 's sa l e s e f f or t s a t t ha t
t i me . The 17
c a t e gor i e s
we r e
f a i r l y
c ommon a c r oss t he
por -
t a l si t e s a n d
r e pr e se n t
a br oa d
a r r a y
of
good s. (A
l i st of
spe -
c i f i c We b si t e s i s a v a i l a bl e
u pon r e qu e st
f r omt he
a u t hor s.)
Tr a i n e d r e se a r c he r s a c c e sse d e a c h We b
pa ge ;
se a r c he d
f or
a n y
i n f or ma t i on
pe r t a i n i n g
t o
pr i v a c y
a n d
se c u r i t y
i ssu e s;
a n d
pr i n t e d
t he
pa ge s
on whi c h t hi s i n f or ma t i on wa s
f ou n d , pa ge s
wi t h l i n ks t o su c h
i n f or ma t i on ,
a n d t he si t e
home
pa ge (i .e .,
i n i t i a l
st a r t i n g pa ge ).
Ea c h We b si t e wa s
t he n c od e d
(se e
Ta bl e
1) by
t he a u t hor s wi t h
r e spe c t
t o i t s
i n f or ma t i on
r e ga r d i n g (1)
c u st ome r i d e n t i f i c a t i on
(i n c l u d i n g
t he u se of
c ooki e s), (2)
c u st ome r
c on t a c t ,
a n d
(3)
i n f or ma -
t i on
sha r i n g.
The si t e s we r e a l so c od e d
a c c or d i n g
t o t he
pr e se n c e
or a bse n c e of wr i t t e n i n f or ma t i on r e ga r d i n g (I )
se c u r e t r a n sa c t i on sy st e ms, (2) c r e d i t c a r d f r a u d
gu a r a n t e e s,
a n d (3) a l t e r n a t i v e or d e r i n g me t hod s.4 I n i t i a l
c od i n g a gr e e -
me n t wa s hi gh (93% a c r oss a l l v a r i a bl e s), a n d d i sa gr e e -
me n t s we r e r e sol v e d by d i sc u ssi on . A l t hou gh
t he
ge n e r a l
a ppr oa c h
u se d he r e i s
c ompa r a bl e
t o t ha t r e por t e d by
on e of
t he FTC's (1998d ) r e c e n t st u d i e s on e -c omme r c e , t he c u r -
r e n t r e se a r c h r e por t s
n ot
on l y
t he
pr e se n c e
of i n f or ma t i on
pr i v a c y a n d /or se c u r i t y
d i sc l osu r e bu t a l so t he
t y pe
a n d l e v e l
of d i sc l osu r e .
4Thi r d -pa r t y e n d or se me n t s (e .g., se a l s of a ppr ov a l su c h a s Ve r i S i gn ,
TR US Te , a n d CP A We bTr u st )
we r e n ot e xa mi n e d i n t hi s st u d y ,
n or wa s t he
a c t i v a t i on of se c u r e l i n k i c on s (i .e ., a l oc ke d pa d l oc k or u n br oke n ke y ),
whi c h a ppe a r on popu l a r We b br owse r s.
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58 I n t e r n e t
P r i v a c y
a n d
S e c u r i t y
Ta bl e 2. I n c i d e n c e of
P r i v a c y -
a n d
S e c u r i t y -R e l a t e d
S t a t e me n t s on Comme r c i a l We b S i t e sa
Con su me r
P r i v a c y -R e l a t e d
S t a t e me n t s S e c u r i t y -R e l a t e d
S t a t e me n t s
P e r c e pt i on s
Cu st ome r I n f or - S e c u r e A l t e r n a t i v e P u r c ha se
S hoppi n g Ca t e gor y I d e n t i f i -
Un sol i c i t e d ma t i on Tr a n s-
S e c u r i t y
O r d e r - Li ke l i -
(S a mpl e S i ze )
c a t i on Con t a c t
S ha r i n g A n y
a c t i on Gu a r a n t e e
i n g A n y
R i sk hood
Books
(21)
33.3 42.9 42.9 61.9 71.4 19.0 61.9 76.2 2.43 3.73
Cl ot hi n g (29)
34.5 44.8 44.8 48.3 55.2 10.3 41.4 62.1 3.95 2.27
Compu t e r
ha r d wa r e
(13)
61.5 61.5 38.5 69.2 92.3 7.7 53.8 92.3 4.10 2.58
Cosme t i c s/ski n c a r e
(36)
16.7 36.1 19.4 38.9 47.2 5.6 52.8 61.1 3.86 1.40
De pa r t me n t
st or e s
(14)
64.3 71.4 64.3 71.4 42.9 7.1 28.6 57.1 3.54 2.18
El e c t r on i c s
(12)
58.3 58.3 58.3 75.0 50.0 16.7 33.3 50.0 4.46 2.35
Fl owe r s a n d
gi f t s (9)
33.3 55.6 55.6 55.6 77.8 0.0 66.7 77.8 3.47 2.77
Food a n d
gr oc e r i e s (13)
23.1 46.2 46.2 46.2 61.5 7.7 61.5 76.9 3.95 1.78
Ha i r c a r e
(15)
20.0 20.0 40.0 46.7 26.7 0.0 40.0 40.0 3.53 1.43
He a l t h f ood s
(25)
16.0 28.0 28.0 32.0 56.0 4.0 72.0 84.0 3.93 1.92
Home d e c or
(27)
7.4 14.8 11.1 22.2 37.0 3.7 51.9 59.3 3.69 1.80
Mu si c
(51)
17.6 29.4 25.5 45.1 60.8 3.9 49.0 78.4 3.19 3.64
O f f i c e
su ppl i e s (35)
17.1 20.0 8.6 25.7 28.6 5.7 31.4 45.7 3.25 2.21
,
P e t
su ppl i e s (17)
17.6 23.5 17.6 23.5 52.9 0.0 41.2 70.6 3.35 1.28
R u gs
a n d
c a r pe t s (17)
0.0 5.9 5.9 5.9
11.8
0.0 52.9 52.9 4.10 1.19
S por t i n g good s (35)
8.6 20.0 17.1 28.6 45.7 2.9 40.0 60.0 3.58 2.16
Toy s
a n d
ga me s (12)
41.7 75.0 75.0 83.3 83.3 8.3 33.3 83.3 3.57 2.55
O v e r a l l
(381)
23.1 33.6 29.4 41.5 50.7 5.8 47.5 65.6
a A l l n u mbe r s f or
pr i v a c y
a n d
se c u r i t y
i n f or ma t i on a r e
pe r c e n t a ge s
of si t e s wi t hi n a
pa r t i c u l a r c a t e gor y
t ha t
ga v e
some
t y pe
of n ot i f i c a t i on (st a t e me n t , pol i c y ,
a n d so f or t h)
t o c on su me r s
r e ga r d i n g
t he
pr i v a c y
or
se c u r i t y
i ssu e i n
qu e st i on .
bR i sk a n d
pu r c ha se
l i ke l i hood n u mbe r s
r e pr e se n t a ggr e ga t e d
me a n s f r omt he c on su me r
su r v e y .
De sc r i pt i v e
R e su l t s
The
ge n e r a l
r e su l t s show t ha t t he d i sc l osu r e of on l i n e
pr i -
v a c y pr a c t i c e s
ha s r i se n si n c e t he Ma r c h 1998 FTC
(1998e )
su r v e y
a n d i s c ompa r a bl e
t o t he Ma r c h 1999 su r v e y (Cu l n a n
1999a ). A l t hou gh
t he 1998 FTC st u d y
i n d i c a t e s t ha t 14% of
c omme r c i a l We b si t e s ma d e me n t i on of
pr a c t i c e s
r e l a t e d t o
c on su me r i n f or ma t i on pr i v a c y
a n d Cu l n a n
(1999a ) r e por t s
a
65.9% d i sc l osu r e r a t e i n Ma r c h 1999,
ou r d a t a
(Ja n u a r y /Fe br u a r y 1999)
show ov e r a l l d i sc l osu r e
(i .e .,
t he
pr e se n c e
of
a n y t y pe
of
pr i v a c y
st a t e me n t )
t o be 41.5%.
(Not e
t ha t d i r e c t
c ompa r i son s
a c r oss t he se st u d i e s a r e n ot
f e a si bl e be c a u se of d i f f e r e n c e s i n t he
sa mpl e s u se d .)
We
pr e se n t
t he r e su l t s f r omt he
st u d y
i n Ta bl e 2.
For i n d i v i d u a l
t y pe s
of
pr i v a c y
c on c e r n s,
d i sc l osu r e of
pr a c t i c e s
r e l a t e d t o u n sol i c i t e d c u st ome r c on t a c t c on st i t u t e d
33.6%
(n
=
128)
of t he c u r r e n t
sa mpl e . R e ga r d i n g
t he v a r i -
ou s l e v e l s of
pr i v a c y pr ot e c t i on ,
19
(5.0%) pr omi se d
n o
u n sol i c i t e d c on t a c t s,
38
(10.0%)
c on t a c t e d
on l y
i f
r e qu e st e d ,
60
(15.7%) pr ov i d e d
a n
opt -ou t
a l t e r n a t i v e ,
a n d 11
(2.9%)
st a t e d t ha t c on t a c t s wou l d oc c u r bu t d i d n ot
gi v e
a n
opt -ou t
a l t e r n a t i v e . The
r e ma i n i n g
253
(66.4%)
si t e s
pr ov i d e d
n o
i n f or ma t i on
r e ga r d i n g
u n sol i c i t e d c on su me r c on t a c t s.5
The
sha r i n g
of i n f or ma t i on wi t h ot he r
c ompa n i e s
wa s d i s-
c l ose d
by on l y
112
(29.4%)
of t he e xa mi n e d on l i n e r e t a i l e r s.
Wi t h
r e spe c t
t o
pr i v a c y pr ot e c t i on
l e v e l s,
65 si t e s
(17.1%)
r e por t e d
n o
sha r i n g
of c on su me r i n f or ma t i on ;
2
(.5%)
sha r e d i n f or ma t i on
on l y
i f
r e qu e st e d by
t he c u st ome r
(a n
opt -i n pr oc e d u r e );
19
(5.0%) c a r e f u l l y
sha r e d i n f or ma t i on
bu t
pr ov i d e d
a n
opt -ou t
a l t e r n a t i v e ,
whe r e a s 16
(4.2%)
me r e l y pr ov i d e d
t he
opt -ou t
a l t e r n a t i v e ;
3
(.8%) a gr e e d
t o
sha r e
c a r e f u l l y
bu t ha d n o
opt -ou t pr oc e d u r e ;
a n d 7
(1.8%)
me r e l y
sha r e d i n f or ma t i on wi t hou t f u r t he r n ot i f i c a t i on . The
r e ma i n i n g
269 si t e s
(70.6%)
ha d n o su c h
pr i v a c y
st a t e me n t .
O n l i n e c u st ome r i d e n t i f i c a t i on
pr oc e d u r e s
ha d t he l owe st
d i sc l osu r e r a t e s:
O n l y
88 si t e s
(23.1%)
of f e r e d t hi s
t y pe
of
st a t e me n t . Ni n e t e e n si t e s
(5.0%) e xpl i c i t l y
st a t e d t ha t
t he y
n e v e r i d e n t i f i e d c u st ome r s who a c c e ss t he si t e ,
12
(3.1%)
pr ov i d e d
a n
opt -i n
a l t e r n a t i v e ,
18
(4.7%) pr ov i d e d
a n
opt -
ou t a l t e r n a t i v e ,
a n d 39
(10.2%)
st a t e d t ha t
t he y
i d e n t i f i e d
c u st ome r s bu t d i d n ot
pr ov i d e a n y opt -ou t
a l t e r n a t i v e s.
Wi t h
r e spe c t
t o me t hod s of
r e spon d i n g
t o
se c u r i t y
c on -
c e r n s,
250 si t e s
(65.6%)
d i sc l ose d a t l e a st on e of t he t hr e e
se c u r i t y -r e l a t e d pr a c t i c e s
d e sc r i be d
pr e v i ou sl y . S pe c i f i c a l l y ,
193
(50.7%)
i n d i c a t e d t ha t t r a n sa c t i on s we r e se c u r e ,
bu t
I
50O f
t he 381 c omme r c i a l We b si t e s i n t he
sa mpl e ,
88 d i d n ot a l l ow a f u l l
pu r c ha se t r a n sa c t i on -i n c l u d i n g pa y me n t by
c r e d i t c a r d -t o be ma d e ov e r
t he I n t e r n e t . Howe v e r , ma n y
of t he si t e s st i l l a l l owe d
n on pa y me n t c ommu n i -
c a t i on of
pe r son a l
i n f or ma t i on , su c h a s
a ski n g qu e st i on s, joi n i n g ma i l i n g
l i st s, st a t i n g pr od u c t pr e f e r e n c e s,
a n d e v e n on l i n e
or d e r i n g
wi t h
pr e shi pme n t ,
post shi pme n t ,
or CO D
bi l l i n g.
Be c a u se t he se si t e s st i l l c ol l e c t
pe r son a l
a n d
some f i n a n c i a l c on su me r i n f or ma t i on , ma n y pr i v a c y
a d v oc a t e s c on t e n d t ha t
t he on l i n e r e t a i l e r s shou l d st i l l d i sc l ose
pr i v a c y
a n d
se c u r i t y pr a c t i c e s.
Ne v e r t he l e ss, we
pr e se n t
i n t hi s f oot n ot e t he
a ggr e ga t e pr i v a c y
a n d
se c u r i t y
f i gu r e s
f or
on l y
t hose We b si t e s t ha t a l l owe d c r e d i t c a r d t r a n sa c t i on s.
O f t he 293 si t e s
a l l owi n g
c r e d i t c a r d t r a n sa c t i on s,
146
(49.8%)
ha d some
t y pe
of
pr i v a c y
st a t e me n t . Di sc l osu r e
f i gu r e s
f or t he i n d i v i d u a l
t y pe s
of
pr i -
v a c y
c on c e r n s we r e
118 (40.3%)
f or u n sol i c i t e d c u st ome r c on t a c t s,
102
(34.8%)
f or c u st ome r i n f or ma t i on d i st r i bu t i on ,
a n d 82
(28%)
f or on l i n e
c u st ome r i d e n t i f i c a t i on .
R e ga r d i n g se c u r i t y -r e l a t e d
st a t e me n t s, 230
(78.5%)
ha d some
t y pe
of
se c u r i t y st a t e me n t ,
192
(65.5%)
c ommu n i c a t e d
t he
pr e se n c e
of se c u r e t r a n sa c t i on
sy st e ms,
22
(7.5%)
ha d
on l i n e se c u r i t y
gu a r a n t e e s,
a n d 161
(54.9%) e xpl i c i t l y
d i sc l ose d a l t e r n a t i v e
pa y me n t
me t hod s.
This content downloaded from 203.217.177.216 on Wed, 6 Aug 2014 22:43:22 PM
All use subject to JSTOR Terms and Conditions
Jou r n a l of P u bl i c
P ol i c y
&
Ma r ke t i n g
59
on l y
22
(5.8%) gu a r a n t e e d
t ha t
se c u r i t y . Fi n a l l y ,
181 si t e s
(47.5%) e xpl i c i t l y
of f e r e d a l t e r n a t i v e
pu r c ha si n g
me t hod s.
The d i sc l osu r e r a t e s v a r i e d
c on si d e r a bl y
a c r oss
shoppi n g
c a t e gor i e s.
A s c a n be se e n i n Ta bl e 2, We b si t e
c a t e gor i e s
su c h a s
d e pa r t me n t
st or e s a n d
t oy s
a n d
ga me s
ha d
hi ghe r
pe r c e n t a ge s
of
pr i v a c y
st a t e me n t s,
whe r e a s l owe r
pe r c e n t -
a ge s
we r e f ou n d i n
c a t e gor i e s
su c h a s home d e c or a n d
r u gs
a n d
c a r pe t s.
The
R e l a t i on shi p
Be t we e n E-R e t a i l e r
R e spon se s
a n d Con su me r
P e r c e pt i on s
To e xa mi n e whe t he r t he
pr e v a l e n c e
of
pr i v a c y
a n d
se c u r i t y
d i sc l osu r e s r e l a t e s t o c on su me r
pe r c e pt i on s,
we
c ompa r e d
t he We b si t e e xa mi n a t i on d e t a i l e d
pr e v i ou sl y
wi t h a su bse t
of d a t a f r oma Ma r c h 1999
i n v e st i ga t i on
of 160 I n t e r n e t
u se r s.6 The d a t a a r e f r oma
pe n c i l -a n d -pa pe r su r v e y
u se d t o
e xpl or e
c on su me r s' I n t e r n e t
u sa ge
a c t i v i t i e s a n d t he i r
pe r -
c e pt i on s r e ga r d i n g
on l i n e
shoppi n g. A mon g
ot he r i t e ms n ot
e xa mi n e d
he r e ,
t he
qu e st i on n a i r e
i n c l u d e d
pu r c ha se
l i ke l i -
hood a n d r i sk
pe r c e pt i on
me a su r e s f or 17
c a t e gor i e s
of
good s
sol d on l i n e a t t he t i me of t he
st u d y ;
t he se
c a t e gor i e s
ma t c he d t hose u se d f or t he We b si t e e xa mi n a t i on . P u r c ha se
l i ke l i hood f or e a c h
c a t e gor y
wa s me a su r e d wi t h a se v e n -
poi n t r e spon se
i t e mt ha t a ske d how
l i ke l y r e spon d e n t s
we r e
t o ma ke I n t e r n e t
pu r c ha se s
f or e a c h
shoppi n g c a t e gor y
a n d
wa s a n c hor e d wi t h
"v e r y u n l i ke l y " (1)
a n d
"v e r y l i ke l y " (7).
R i sk
pe r c e pt i on
wa s a sse sse d
by a ski n g
how
r i sky
on l i n e
pu r c ha se s
a r e i n e a c h
c a t e gor y
on a sc a l e a n c hor e d wi t h "n ot
r i sky " (1)
a n d
"r i sky " (7).
To a sse ss t he
e xpe c t e d r e l a t i on shi ps,
t he
pe r c e n t a ge s
of
pr i v a c y -
a n d
se c u r i t y -r e l a t e d
st a t e me n t s f r omt he We b si t e
e xa mi n a t i on
(Col u mn s
5 a n d 9 of Ta bl e
2)
we r e
c ompa r e d
wi t h t he r i sk
pe r c e pt i on s
a n d
pu r c ha se
l i ke l i hood s f r omt he
c on su me r
su r v e y
a t -t he
shoppi n g c a t e gor y
l e v e l .
S pe a r ma n 's
r a n k c or r e l a t i on s we r e c a l c u l a t e d f or e a c h
pa i r
of v a r i a bl e s.
A l t hou gh
t he
pr e v a l e n c e
of
pr i v a c y
a n d
se c u r i t y
st a t e -
me n t s wa s
e xpe c t e d
t o be
n e ga t i v e l y
c or r e l a t e d wi t h r i sk
pe r c e pt i on s, a n a l y se s
showe d n o
r e l a t i on shi p
f or e i t he r
pr i -
v a c y
(r s
=
-.06, n .s.)
or
se c u r i t y
(r s
=
-.01, n .s.). Howe v e r ,
t he
pe r c e n t a ge
of
pr i v a c y
st a t e me n t s i n a
c a t e gor y
wa s
pos-
i t i v e l y
r e l a t e d
(a s e xpe c t e d )
t o
c a t e gor y -l e v e l
on l i n e
pu r -
c ha se l i ke l i hood s
(r s
=
.65, p < .01). Li ke wi se ,
t he
pe r c e n t -
a ge
of
se c u r i t y
st a t e me n t s i n a
c a t e gor y
wa s
posi t i v e l y
r e l a t e d t o on l i n e
pu r c ha se
l i ke l i hood s
(r s
=
.44, p < .05).7
Di sc u ssi on
I n a d d i t i on t o
pr ov i d i n g a c ompa r i son poi n t
wi t h FTC-
r e l a t e d r e se a r c h, t he
pr e se n t e xa mi n a t i on of c omme r c i a l
We b si t e s d e l v e s f u r t he r i n t o I n t e r n e t
pr i v a c y
a n d
se c u r i t y
i ssu e s
by e xa mi n i n g
t he
d e gr e e
of f a v or a bl e n e ss of a c t u a l
on l i n e r e t a i l e r
pr a c t i c e s
f r oma
pr i v a c y pol i c y pe r spe c t i v e .
I n
a d d i t i on , by i n t e gr a t i n g
d a t a f r oma c on su me r
su r v e y ,
we
show t ha t a
posi t i v e r e l a t i on shi p
e xi st s be t we e n t he
pe r c e n t -
a ge
of
pr i v a c y -
a n d
se c u r i t y -r e l a t e d
st a t e me n t s on We b si t e s
f or
pa r t i c u l a r
on l i n e
shoppi n g c a t e gor i e s
a n d c on su me r s'
on l i n e
pu r c ha se
l i ke l i hood s f or t hose
c a t e gor i e s.8
Li mi t a t i on s a n d Fu t u r e R e se a r c h Di r e c t i on s
A l t hou gh
t he e xa mi n a t i on
pr e se n t e d
he r e i s
he l pf u l
f or
u n d e r st a n d i n g
d i sc l osu r e
pr a c t i c e s
of on l i n e r e t a i l e r s, se v -
e r a l l i mi t a t i on s shou l d be a d d r e sse d i n f u r t he r r e se a r c h.
Fi r st , t he
r a pi d gr owt h
of t he I n t e r n e t a n d on l i n e
shoppi n g
pr a c t i c e s
ma ke s
pu bl i she d
r e se a r c h su c h a s t hi s d a t e d
by
t he
t i me of
pu bl i c a t i on .
The e xa mi n a t i on of on l i n e d i sc l osu r e
pr a c t i c e s
shou l d be a n
on goi n g
r e se a r c h e f f or t , pa r t i c u l a r l y
wi t h
r e spe c t
t o how su c h
pr a c t i c e s ma y
a f f e c t c on su me r
pe r -
c e pt i on s.
A se c on d l i mi t a t i on i n v ol v e s t he me a su r e of
pe r -
c e i v e d r i sk u se d i n t he c on su me r
su r v e y . Mor e -spe c i f i c
me a su r e s of
pe r c e i v e d
r i sk wou l d a i d i n
u n d e r st a n d i n g
how
c on su me r s
pe r c e i v e
t he v a r i ou s d i me n si on s of r i sk wi t h
r e spe c t
t o on l i n e
shoppi n g.
For
e xa mpl e ,
v a r i ou s r i sk
d i me n si on s
ma y
be mor e sa l i e n t
d e pe n d i n g
on t he
pr od u c t
c a t e gor y
t ha t i s
be i n g
c on si d e r e d f or on l i n e
pu r c ha se .
Fi n a l l y ,
i n st e a d of
e xa mi n i n g on l y pe r c e i v e d
r i sk t owa r d
ge n e r a l
on l i n e
shoppi n g, spe c i f i c
a sse ssme n t s of r i sk
r e ga r d -
i n g pr i v a c y ,
on l i n e r e t a i l e r
f r a u d ,
a n d t he
se c u r i t y
of on l i n e
t r a n sa c t i on
sy st e ms
wou l d be
he l pf u l
f or
u n d e r st a n d i n g
t hose
a spe c t s
t ha t
ma y
be i n f l u e n c e d
by
on l i n e d i sc l osu r e s.
The r e a r e se v e r a l d i r e c t i on s t ha t f u t u r e
pol i c y -r e l a t e d
ma r ke t i n g
r e se a r c h c a n t a ke t o a d v a n c e
kn owl e d ge
t ha t wi l l
be be n e f i c i a l t o bot h c on su me r s a n d bu si n e sse s. For e xa m-
pl e ,
mu c h of t he
pr opose d l e gi sl a t i on
i s
t a r ge t e d
t owa r d
ma n d a t or y
d i sc l osu r e s of on l i n e r e t a i l e r s'
c ol l e c t i on , u se ,
a n d d i sse mi n a t i on of c on su me r d a t a . The se d i sc l osu r e s a r e
of t e n se e n
by pol i c y ma ke r s
a s
n e c e ssa r y
i n f or ma t i on t ool s
so t ha t c on su me r s c a n
ope r a t e
wi t h mor e
c ompl e t e
kn owl -
e d ge
of r e t a i l e r
pr a c t i c e s (A n d r e ws 1998).
The sa me d i sc l o-
su r e s
ma y
be se e n
by
r e t a i l e r s a s a n
oppor t u n i t y
t o r e d u c e
c on su me r c on c e r n s
r e ga r d i n g pr i v a c y
i ssu e s. A n
a ppr oa c h
su gge st e d by
Mi l n e a n d Boza
(1999)
u se s
c on c e pt s
f r om
r e l a t i on shi p ma r ke t i n g
t o f oc u s on l i n e r e t a i l e r
r e spon se s
t o
pr i v a c y
a n d
se c u r i t y
i ssu e s so t ha t t he se
r e spon se s e mpha -
si ze t he
d e v e l opme n t
a n d
i mpr ov e me n t
of t r u st be t we e n
ma r ke t e r s a n d c on su me r s.
Thu s,
i n st e a d of
f oc u si n g
on c on -
c e r n s, t he f oc u s shi f t s t o t r u st , whi c h Mi l n e a n d Boza
d e sc r i be a s a d i st i n c t
a ppr oa c h t o
ma n a gi n g pot e n t i a l pr i -
v a c y i ssu e s
r e ga r d i n g
d a t a ba se
ma n a ge me n t (c f . Mi l n e a n d
Gor d on 1993). Be c a u se t he me t hod or f or ma t of i n f or ma t i on
d i sc l osu r e s c a n a f f e c t c on su me r
pe r c e pt i on s
a n d be ha v i or
(e .g., S pr ot t , Ha r d e st y ,
a n d
Mi y a za ki 1998), r e se a r c h t ha t
e xa mi n e s how su c h
a ppr oa c he s c a n
sa t i sf y
n e w
l e gi sl a t i v e
r e qu i r e me n t s wou l d be he l pf u l . Con su me r s wou l d r e c e i v e
6R e spon d e n t s
we r e
r a n d oml y
sol i c i t e d i n a
ma jor
i n t e r n a t i on a l
a i r por t
of
a
l a r ge
U.S .
c i t y (t he e f f e c t i v e
r e spon se
r a t e wa s
84.7%).
S e e
Mi y a za ki
a n d
Fe r n a n d e z
(2000)
f or
su r v e y d e t a i l s, i n c l u d i n g sa mpl e
c ha r a c t e r i st i c s.
7I n
su ppor t
of ou r
pr e v i ou s su gge st i on
t ha t a l t e r n a t i v e
or d e r i n g
me t hod s
ma y
n ot be a s e f f e c t i v e i n
i n c r e a si n g
on l i n e
or d e r i n g
a s t he ot he r
se c u r i t y
i n f or ma t i on
d i sc l osu r e s, t he
S pe a r ma n 's
r a n k c or r e l a t i on be t we e n a l t e r n a -
t i v e
or d e r i n g
me t hod s a n d
pu r c ha se
l i ke l i hood s wa s
n on si gn i f i c a n t
(r s
=
.06), whe r e a s t he c or r e l a t i on be t we e n t he r a t e t ha t e i t he r of t he ot he r se c u -
r i t y
st a t e me n t s
a ppe a r e d
a n d
pu r c ha se
l i ke l i hood s wa s
si gn i f i c a n t (r ,
=
.65,
p <.01).
8A l t hou gh
t he
pr e v a l e n c e
of
pr i v a c y -
a n d
se c u r i t y -r e l a t e d
d i sc l osu r e s
wa s n ot f ou n d t o be r e l a t e d t o
c a t e gor y -l e v e l
r i sk
pe r c e pt i on s,
t hi s
ma y
ha v e be e n a n a r t i f a c t of t he
d i v e r si t y
i n t he d i me n si on s of r i sk t ha t e a c h
pr od u c t c a t e gor y ma y
i n v oke .
Con si d e r i n g
t ha t ou r on e -i t e mr i sk
pe r c e p-
t i on me a su r e wa s
ge n e r i c , a n y
su c h v a r i a n c e i n t he d i me n si on of r i sk c on -
si d e r e d
by
c on su me r s whe n
r e spon d i n g
t o e a c h
c a t e gor y
c ou l d ha v e hi n -
d e r e d t he
f i n d i n gs.
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All use subject to JSTOR Terms and Conditions
60 I n t e r n e t
P r i v a c y
a n d
S e c u r i t y
t he d i sc l osu r e s
r e qu i r e d by pol i c y ma ke r s,
a n d ma r ke t e r s
wou l d
e n joy
t he be n e f i t s of i n c r e a se d e f f e c t i v e n e ss f r oma
ma n a ge r i a l pe r spe c t i v e .
A l t hou gh
se v e r a l
l e gi sl a t i v e
e f f or t s
a ppe a r
t o be d i r e c t e d
a t
e -c omme r c e , pol i c y ma ke r s
shou l d c on t i n u e t o e v a l u a t e
n ot
on l y
on l i n e
pr a c t i c e
a n d c on su me r
pe r c e pt i on s
bu t a l so
e xpe r t opi n i on r e ga r d i n g
t he se r i ou sn e ss of t hr e a t s su c h a s
u n d i sc l ose d c u st ome r i d e n t i f i c a t i on a n d
t r a c ki n g-t wo
i ssu e s t ha t ha v e r e c e i v e d l i t t l e a t t e n t i on i n
pe n d i n g l e gi sl a -
t i on . I n
a d d i t i on ,
pr i v a c y
a n d
se c u r i t y
c on c e r n s
ma y
ha v e
d i f f e r e n t i a l e f f e c t s on c on su me r
pe r c e pt i on s
a n d be ha v i or ,
pe r ha ps c ompl i c a t i n g pol i c y ma ke r s'
e f f or t s t o i n f or mc on -
su me r s of u n sa f e on l i n e
pr a c t i c e s
whi l e st i l l
a v oi d i n g
u n n e c e ssa r y
d e c e l e r a t i on of I n t e r n e t
a d opt i on
r a t e s. A s
su c h,
t he
ba r r a ge
of
pr i v a c y
a n d
se c u r i t y wa r n i n gs
i ssu e d t o
c on su me r s
ma y
ha v e mi xe d e f f e c t s on c on su me r c on f i -
d e n c e , pa r t i c u l a r l y
a s t he I n t e r n e t be c ome s
pe r c e i v e d
a s a
n e c e ssa r y
e l e me n t of mod e r n l i f e .
A n a d d i t i on a l c on c e r n i s t he d i r e c t i on i n whi c h
l e gi sl a t i on
i s he a d e d .
P e t t y (1998)
c on t e n d s t ha t
t hou gh
t he r e wi l l be
c on t i n u e d e f f or t s t o r e d u c e
d e c e pt i v e pr a c t i c e s,
t he
e me r g-
i n g
f oc u s wi l l be on
r e d u c i n g
u n f a i r n e ss, pa r t i c u l a r l y
a s i t
a ppl i e s
t o t he
t a r ge t i n g
of
pot e n t i a l l y
v u l n e r a bl e a u d i -
e n c e s-a
pr a c t i c e
t ha t wi l l be
i n c r e a si n gl y e a sy
t o f a c i l i t a t e
a s I n t e r n e t -r e l a t e d d a t a ba se i n f or ma t i on
gr ows.
A s t he
popu l a r i t y
of t he I n t e r n e t c on t i n u e s t o
r i se ,
t he
pr i -
v a c y
a n d
se c u r i t y
i ssu e s d i sc u sse d he r e wi l l
i n e v i t a bl y
c ha n ge .
Fu t u r e a l t e r n a t i v e s t o c r e d i t c a r d s,
su c h a s e l e c -
t r on i c
mon e y
or "e -c a sh"
(R ot hf e d e r 1997),
a r e
u n l i ke l y
t o
r e l i e v e c on su me r c on c e r n s
r e ga r d i n g pr i v a c y
a n d
se c u r i t y .
S i mi l a r l y ,
on l i n e c r e d i t c a r d
gu a r a n t e e s, t hou gh c a l mi n g
some
sy st e mse c u r i t y
wor r i e s, ma y
d o l i t t l e t o r e sol v e
pr i -
v a c y
c on c e r n s.
Con v e r se l y , t hi r d -pa r t y
e n d or se r s,
su c h a s
TR US Te ,
Be t t e r Bu si n e ss Bu r e a u O n l i n e ,
or We b
A ssu r a n c e Bu r e a u , ma y
be u se f u l i n
bu i l d i n g
t r u st be t we e n
c on su me r s a n d
pa r t i c i pa t i n g
on l i n e r e t a i l e r s wi t h
r e spe c t
t o
pr i v a c y
bu t
ma y
n ot r e sol v e
se c u r i t y
i ssu e s. The i n t r od u c -
t i on of
se c u r i t y -r e l a t e d
se a l s of
a ppr ov a l ,
howe v e r ,
su c h a s
Ve r i S i gn
a n d CP A We bTr u st , ma y
r e sol v e t hi s c on c e r n . I n
su mma r y ,
t he sol u t i on t o
ma n y
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