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Internet Privacy from the Individual and Business Perspectives - Introduction: privacy, Trust: privacy from the business perspective, Individual vs. business = privacy vs. personalization, Cookies, Google, Solutions

information regulation consumers data

Tziporah Stern

Baruch College, CUNY, USA


People have always been concerned about protecting personal information and their right to privacy. It is an age-old concern that is not unique to the Internet. People are concerned with protecting their privacy in various environments, including healthcare, the workplace and e-commerce. However, advances in technology, the Internet, and community networking are bringing this issue to the forefront. With computerized personal data files:

  1. retrieval of specific records is more rapid;
  2. personal information can be integrated into a number of different data files; and
  3. copying, transporting, collecting, storing, and processing large amounts of information are easier.

In addition, new techniques (i.e., data mining) are being created to extract information from large databases and to analyze it from different perspectives to find patterns in data. This process creates new information from data that may have been meaningless, but in its new form may violate a person’s right to privacy. Now, with the World Wide Web, the abundance of information available on the Internet, the many directories of information easily accessible, the ease of collecting and storing data, and the ease of conducting a search using a search engine, there are new causes for worry (Strauss & Rogerson, 2002). This article outlines the specific concerns of individuals, businesses, and those resulting from their interaction with each other; it also reviews some proposed solutions to the privacy issue.


Privacy also is important to businesses. A business collects information about its customers for many reasons: to serve them more successfully, to build a long-term relationship with them, and to personalize services. To build a successful relationship, businesses must address their customers’ privacy concerns (Resnick & Montania, 2003) so that their customers will trust them. They must also protect all information they have access to, since this is what consumers expect of them (Hoffman et al., 1999). Furthermore, they must be aware of the fact that some information is more sensitive (Cranor et al., 1999), such as Social Security numbers (Berghel, 2000). This trust is the key to building a valuable relationship with customers (Hoffman et al., 1999; Liu et al. 2004).

One of the many ways a business can gain consumer confidence is by establishing a privacy policy, which may help consumers trust it and lead them to return to the Web site to make more purchases (Liu et al., 2004). When a business is trusted, consumers’ privacy concerns may be suppressed, and they may disclose more information (Xu et al., 2003). Privacy protection thus may be even more important than Web site design and content (Ranganathan & Ganapathy, 2002). Also, if an organization is open and honest with consumers, the latter can make a more informed decision as to whether or not to disclose information (Olivero & Lunt, 2004).


In matters of information, there are some areas of conflict between businesses and consumers. First, when a consumer and an organization complete a transaction, each has a different objective. The consumer does not want to disclose any personal information unnecessarily, and a business would like to collect as much information as possible about its customers so that it can personalize services and advertisements, target marketing efforts, and serve them more successfully. Consumers do appreciate these efforts yet are reluctant to share private information (Hoffman, 2003).


Second, search engines also may potentially cause privacy problems by storing the search habits of their customers by using cookies. Their caches also may be a major privacy concern, since Web pages with private information posted by mistake, listserv, or Usenet postings may become available worldwide (Aljifri & Navarro, 2004). In general, cookies may be a privacy threat by saving personal information and recording user habits. The convenience of having preferences saved does not outweigh the risks associated with allowing cookies access to your private data. There are now many software packages that aid consumers in choosing privacy preferences and blocking cookies (see solutions section).


Finally, the most recent controversy involves Google’s Gmail service and Phonebook. Gmail uses powerful search tools to scan its users’ e-mails in order to provide them with personalized advertisements. On the one hand, this invades users’ private e-mails. However, it is a voluntary service the user agrees to when signing up (Davies, 2004).


There have been many attempts at trying to solve the privacy problem. There are three different types of solutions: governmental regulation, self-regulation, and technological approaches.

Governmental Regulation

Some form of government policy is essential, since in the absence of regulation and legislation to punish privacy-offenders, consumers may be reluctant to share information. However, written privacy policy requires enforcement (O’Brien & Yasnoff, 1999). In addition, given the current bureaucratic nature of legislation, technology advances far faster than the laws created to regulate it. Consequently, self-regulation may be a better solution.


There are numerous forms of self-regulation. The Fair Information Practices (U.S.) and the Organization for Economic Co-operation and Development (OECD) Guidelines (International) are both guidelines for protecting computerized records. These guidelines provide a list of policies a company should follow. Another type of self-regulated solution is a privacy seal program such as TRUSTe or Verisign. A business may earn these seals by following the guidelines that the seal company provides. A third kind of self-regulation is opt-in/opt-out policy. Consumers should be able to choose services by opting in or out (Hoffman et al., 1999) and to voluntarily embrace new privacy principles (Smith, 2001). A joint program of privacy policies and seals may provide protection comparable to government laws (Cranor et al., 1999) and may even address new issues faster than legislation.


Technological solutions also are a viable alternative. Technologies can protect individuals by using encryption, firewalls, spyware, and anonymous and pseudonymous communication. A well-known privacy technology is the Platform for Privacy Preferences (P3P), a World Wide Web Consortium (W3C) project that provides a framework for online interaction and assists users in making informed privacy decisions. In summary, although there seems to be some promise to each of these three alternatives, a combination of government regulation, privacy policies, and technology may be the best solution.


Advances in the collection and analysis of personal information have proven to be beneficial to society. At the same time, they have aggravated the innate concern for the protection of privacy. This article has reviewed current issues in the areas of information privacy and its preservation. It has included the differing points of view of those providing the information and those collecting and using it. Since the collection of information entails both benefits and threats, various suggestions for minimizing the economic costs and maximizing the benefits are discussed.

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