Online privacy is important for building customer trust. Consumers care deeply about how their personal information is collected and used. Many factors influence consumer decisions, including privacy policies and how information is protected. Lack of privacy protections negatively impacts e-commerce. While the U.S. has some privacy laws, other countries like Australia and EU members have stronger protections that can affect international companies. Chief privacy officers and following best practices help companies address these issues.

1. Online Privacy and Your Company Zach Evans

2. Why Is Privacy Important? Collection, enhancement, and aggregation of data are instantaneous Information can be collaborated upon across the entire organization Expectations of consumers are shifting rapidly: customer’s patience levels are getting shorter and shorter Privacy and customer permission are cornerstone to customer trust

3. Nine Factors in Deciding to Visit a Web Site Source: Consumer WebWatch 23 36 30 9 The site displays awards and certificates from other groups 12 26 41 19 The site displays seals of approval from other groups 11 27 37 24 What businesses and organizations financially support the site 12 22 33 32 Knowing who owns a Web site 4 8 36 50 Being able to find out important facts about a Web site 2 4 28 65 Knowing the site is updated frequently with new information 2 4 25 68 Being able to easily identify the sources of information 1 3 14 80 Being able to trust the information 1 2 16 80 The site is easy to navigate and to find what you want NOT AT ALL IMPORTANT NOT TOO IMPORTANT SOMEWHAT IMPORTANT VERY IMPORTANT

4. Internet Users’ Trust of Organizations Source: Consumer WebWatch

5. Privacy Survey Results Wall Street Journal and NBC News Individuals were asked to identify the issue(s) that concern them the most about the 21 st century 29% responded that they were more concerned about threats to personal privacy that other social issues such as overpopulation, war, and global warming Business Week 37% of Internet users would be “a lot” more inclined to purchase on a site that had a privacy policy 63% of Internet users are very concerned about the use of personal information Jupiter Communications Privacy/Security was the #1 factor that would convert researchers into buyers

6. Six Factors in Choosing an E-Commerce Site Source: Consumer WebWatch 2 4 18 76 The site’s privacy policy 2 2 14 81 The email address, street address or telephone number where you can reach the site’s staff about any problems 2 1 8 88 A statement of the site’s policies for returning unwanted items or canceling reservations 1 1 9 89 An explanation of when you can expect delivery of your products or confirmation of your reservations 1 1 4 93 A statement of how the site will use your name, address, credit card number and other personal information you provide 1 0 3 95 A statement of fees that you will be charged for using the site, including shipping costs, transaction fees and handling fees NOT AT ALL IMPORTANT NOT TOO IMPORTANT SOMEWHAT IMPORTANT VERY IMPORTANT

7. Six Factors in Choosing News/Information Sites Source: Consumer WebWatch 10 24 42 22 The financial relationships the site has with other sites or other businesses 10 22 37 30 A page that lists the editor or people responsible for the content on the site, like the masthead on a print publication 6 13 45 34 A prominently displayed page for corrections and clarifications 7 16 39 36 Email addresses for the editor or people responsible for the content on the site 4 10 25 59 Advertising is clearly labeled as advertising and distinguished from news and information on the site 4 8 22 65 The site’s privacy policy NOT AT ALL IMPORTANT NOT TOO IMPORTANT SOMEWHAT IMPORTANT VERY IMPORTANT

8. Comparison of Importance Users Place on Various Factors and How Much They View Policies Source: Consumer WebWatch

9. Economic Impact of Privacy Concerns Report by Forrester Research found that $15 billion of projected e-commerce revenue would be unrealized because of privacy concerns

10. Basis for Privacy Laws No “right of privacy” in the U.S. Constitution Does restrict how government, at all levels, can collect/use personal information “ Common law” historically limits intrusive collection of personal information Privacy Protection Study Commission (1977) recommended to Congress the following objectives Minimize intrusiveness in the lives of individuals Maximize fairness in institutional decisions made about individuals Provide individuals with legitimate, enforceable expectations of confidentiality

11. Current Federal Privacy Laws Cable Communications Policy Act Census Confidentiality Statute Children’s Online Privacy Protection Act of 1998 Customer Proprietary Network Information Driver’s Privacy Protection Act Electronic Communications Privacy Act Freedom of Information Act Gramm-Leach-Bliley Act Privacy Act Telephone Consumer Protection Act

12. Australian Privacy Amendment Act of 2000 Provides that personal information cannot be collected without the consent of person giving it Once collected, information must be kept confidential Information “cannot be transferred to another country that does not have privacy protection”

13. Australian Privacy Amendment Act Impact U.S. companies with Australian subsidiaries cannot transfer information between countries because U.S. does not (currently) have privacy protection

14. European Union Directive 95/46/EC Adopted in 1998 and became applicable to U.S. in 2001 Users must ‘unambiguously’ give consent for personal data to be collected after being informed about the purposes of the data collection Expressly forbids collection of ‘sensitive data’ such as: racial or ethnic origin, political opinions, religious beliefs, trade union membership, and sexual preference Forbids transfer of personal data to a country that does not provide a level of protection similar to its own

15. European Union Directive 95/46/EC Impact U.S. companies must voluntarily abide to ‘Safe Harbor’ provisions negotiated by U.S. Chamber of Commerce Fewer than 75 U.S. companies had signed up for it as of mid-2001 Microsoft, Intel, Hewlett Packard, and Procter & Gamble

16. Making Privacy a Top-Level Issue Posted privacy policies on their Web sites Created Chief Privacy Officer (CPO) positions Increased employee awareness and training about the issue Established self-regulatory initiatives Taken other noticeable measures to shore up their privacy policies and practices

17. Chief Privacy Officer (CPO) Serve as a liaison between the corporation and consumer Often have veto power over: Product launches Marketing campaigns Strategic partnerships

18. Guidelines for Online Privacy Policies Adoption and Implementation of a Privacy Policy Notice and Disclosure Choice/Consent Data Security Data Quality and Access

19. Online Privacy Resources and Certifying Organizations TRUSTe www.truste.org Better Business Bureau www.bbbonline.org

20. Questions?

21. Sources A Matter of Trust: What Users Want From Web Sites : ConsumerWebWatch.com : January 2003 A Review of Federal and State Privacy Laws : Better Business Bureau : BBBOnline.org Global Commerce and The Privacy Clash : The Information Management Journal : January/February 2002 Guidelines for Online Privacy Policies : Online Privacy Alliance : PrivacyAlliance.org How Does Online Privacy Impact Your Bottom Line? : TRUSTe : Truste.org PRIVACY - What Every Manager Should Know : The Information Management Journal : May/June 2002 The Ethics of Database Marketing : The Information Management Journal : May/June 2002