Privacy‐enhanced Business: Adapting to the Online Environment

Citation

McMellon, C.A. (2002), "Privacy‐enhanced Business: Adapting to the Online Environment", Journal of Consumer Marketing, Vol. 19 No. 5, pp. 445-447. https://doi.org/10.1108/jcm.2002.19.5.445.3

One of the enigmas of the Internet is that consumers desire to purchase products and services in an effective and efficient manner while at the same time they resist business efforts to help them achieve that goal by refusing to supply information that will enhance targeting, segmentation, and product development. As the author states: “Consumers demand products built to more exacting tastes but are reluctant to surrender the information manufacturers need to design and build these products” (p. 2).

Privacy‐enhanced Business deals with these two opposing forces. The managerial implication of this easy‐reading but somewhat‐dry book is that there are increasing consumer concerns about personal privacy on the Internet, both here and in Europe. Therefore, businesses should alter their Internet business practices to be more in line with their customers’ concerns.

The book covers a variety of subjects, including Internet history, the legal issues of Internet privacy, a comparison of US/EU regulations, the economics of the Internet, Internet advertising, how consumers can protect their privacy, and future legislative concerns.

Frye begins with a brief history of the Internet, with the concern being, “how the medium’s early years affects its user’s knowledge, values, and expectations” (p. 5). There is no new information here, but it is interesting reading for those who want to know the history of the Internet, why it works the way it does, and what factors spurred its growth. The author also begins to build the case for consumer’s privacy concerns with survey data and case histories.

Chapter 2 examines the right to privacy definitions from the perspectives of common law, constitutional law, and domestic law. The author details the vagaries of common law and how Supreme Court precedents help define our current meaning of privacy. In addition, the author discusses the implications of US Congress laws in specific areas of credit reporting, general right to privacy, the freedom of information act, the right to privacy act, pricing protection, the cable communication act, and others. Author Frye has a knack for distilling down his own complicated explanations on law into one or two sentences. For example, “ … American privacy regulations can best be described as a set of laws that limit what the government can do with personally identifiable information but puts no limitations on what private enterprise can do with the same information” (p. 48).

Chapter 3 covers the 1980 Organization for Economic Cooperation and Development guidelines that were the baseline of future EU regulations and the evolution of privacy legislation culminating in The European Union Data Directive. Discussions like this are too detailed for the average marketing professional and only a primer for lawyers and others interested in this subject. As for the USA, they are more reactive in specific areas, while the EU is more proactive in regulation for collection and dissemination of personal information. Chapter 4 examines the difference between the EU and the USA over the right to privacy issue. It is a summation of Chapters 2 and 3, tracking the negotiation between the USA and the EU and the stalemate that ensued.

The author takes an oddly tangential direction in Chapter 5, with a discussion of Internet economics. The chapter starts off discussing some of the basics of Internet economics, competitive advantage, and how information fits into it. Interesting, but a bit off subject. The chapter ends with a discussion of the various ways of collecting data (i.e. user profile information, user registration, cookies, and usage logs). The New York Times is used as an example to demonstrate how the info is gathered and used.

Chapter 6 is about Internet advertising. This is another interesting detour, but again, not directly on subject. The author discusses the basics of Internet advertising such as marketing, objectives, and definitions. Frye also discusses types of Internet advertising, which is interesting but, because of the nature of the Internet and the speed of change, some of the latest advertising techniques are omitted (e.g. viral marketing). I thought the one great benefit of this chapter was the list of resource sites you can visit on the Internet. But when I decided to visit them, many of the sites were already gone. The last section tries to integrate privacy issues with a discussion of consumer profiles by firms like DoubleClick and the implications for business.

Chapters 7 and 8 are the heart of the book, examining both sides of the privacy issue: what marketers are doing currently to gather consumer information and what consumers are doing to hinder or stop them. Chapter 7 may be worth the price of the whole book. This chapter discusses the technologies used by business to gather information. It is more detailed and technical than one might want, covering such areas as: types of log files, on‐site registration, cookies (a very intelligent discussion including the privacy issues), and identification numbers implanted in software and hardware by businesses like Microsoft and Intel. Finally, the chapter covers three firms in the news about personal information gathering. This brings this somewhat technical discussion back to the real world and real consequences a firm faces when gathering information.

Chapter 8 covers the opposite side of the issue. That is, what computer users are doing to protect their privacy. The chapter covers the types of cryptography, including evaluations of the various methods, various types of cookie management software and where to get them, anonymizing Web surfing proxies, zero knowledge freedom service, and ifomediaries as methods of protecting against privacy encroachment by marketers. Finally, Chapter 9 offers us a range of future policy scenarios where governmental regulations would begin to protect consumer’s rights to privacy. Scenarios are developed for the short‐run, mid‐range, and long‐term regulations.

Should you be reading this book? Definitely yes, if you are responsible for privacy issues of the firm, especially on the Internet. Probably yes, if you have a serious interest in privacy issues. And maybe yes, if you are general marketer, but it might be too detailed. Privacy‐enhanced Business offers the reader important information on the right to privacy issue. Just be prepared to learn more than you may want to know, unless this is your area of specialization, or you are facing these issues day‐to‐day in your business.