Real World Case for Presentation: No. 3
Acxiom Inc.: Consumer Privacy Challenges in E Business
What detail of you private life would you least like to see splashed across the Internet Or added
to a database, linked to your name and sold in a mailing list?
The privacy problem is simple. Companies need to glean information that will help target sales.
Consumers want the convenience of secure h-commerce without worrying about having their
identities stolen, being spammed, or having the aggregators of personal data knowing and
profiting from every detail of their lives. As retailers and consumers force this issue, h-commerce
could get squeezed in the process particularly among companies that minimize the privacy
concerns of their customers. Take Acxiom.
You may not know Acxiom. But the Conway, Arkansas, company probably knows you, having
spent 30 years amassing a monster database of consumer information. It has dossiers on 160
million Americans 90 percent of U.S. households. Acxiom has 20 million unlisted telephone
numbers gleaned mostly from those warranty cards you filled out when you bought that new
coffee maker that it sells to law enforcement agencies, lawyers, private investigators, debt
collectors, and just about anybody else willing to pay its fee. Acxiom is often better at tracking
down deadbeat dads than the police. That's because Acxiom combines the most extensive public
records database ever gathered by a nongovernmental entity with consumer information it
purchases from the private sector.
The company's biggest clients are data-hungry telemarketers, retailers, h-commerce companies,
and direct mail marketers. Acxiom advises Wal Mart on how to stock its shelves, while helping
Citicorp decide the creditworthiness of potential customers.
"We are not a credit agency," sniffed Jerry Jones, Acxmm's legal and business development
leader, over an elaborate dinner recently at San Francisco's Ritz Canton. Mr. Jones and several of
his colleagues were in the midst of a nationwide tour hawking their latest product a data
integration software system dubbed AbiliTec, which enables clients like Mercedes Benz of
America to access real time detailed transaction information on shoppers, whether they are on
the phone, at a dealership, or online. With something as simple as caller JD, a Mercedes Benz
operator can make a snap decision on whether or not a caller is a potential customer or a waste of
time.
Mr. Jones says Acxiom is in the business of streamlining business. Maybe so, but Acxiom's
power in advising clients on which customers to embrace and which to reject raises troubling
privacy issues, argue privacy advocates like Deirdre Mulligan of The Center for Democracy and
Technology.
Acxiom can help e commerce clients "fraud score" web surfers. Using a combination of
demographics, criminal background checks, and other factors, the company's clients can quickly
prevent certain customers from purchasing items electronically. "It raises a whole bunch of
troubling questions," Ms. Mulligan says.

Today, Acxiom bills itself as the largest data mining company in the country. And it's hard to
argue against that boast considering Acxiom has sales topping $1 billion annually and 5,600
employees worldwide. The company hopes its AbiliTec product will enable it to grow by 30
percent in 2001.
Some high tech companies say increased privacy de-mands place an undue burden on their
businesses. But critics like consumer rights groups and even some business advocates counter
that the savvy ones will channel that resistance into a proactive approach. In other words, a
privacy friendly stance could win over more potential customers than the hard line would.
By making their practices compliant with whatever privacy standards are set and taking
advantage of some innovative new tracking and encryption technologies, companies eventually
could be able to offer consumers the protection they want without subtracting from their sales
numbers. That could mean collecting the same data the companies always have, but not sharing
it with others without first seeking permission, or assuring customers that sites that inevitably
will track their web movements are held accountable for their practices.
Case Study Questions
1.What are the problems companies face when dealing with consumer privacy issues in h
business and E commerce?
2.Are there any ethical issues in how Axciom uses its information on most American
households Why or why not?
3.What can companies do to proactively meet consumer privacy concerns, while capitalizing
on the business value of their information?
4.What do you think about collecting customer information by using online methods like
questionnaires and cookies?
5.Do you think that privacy is important for an enterprise to conduct its businesses, such as
the privacy issues about its own employees?