Online Privacy and Consumer Protection: An Analysis of Portal Privacy Statements

Article excerpt

In an 1890 Harvard Law Review article, Louis Brandeis and Samuel Warren had the foresight to argue that individual citizens should be free from having intimate information published by an increasingly powerful press. Basic human dignity, they claimed, gives individuals a "right to be let alone"--a right to privacy (Warren & Brandeis, 1890, p. 220). A century later, that powerful press has taken on new proportions with the growth of new media technologies, and privacy concerns are a pervasive part of public discourse regarding information technology. Accompanying the rise of the information society, the notion of privacy has expanded to encompass rights to control information about ourselves. Individuals have the right to inspect their own tax, medical, and other governmental records and to assume that sensitive personal information is not released by financial institutions, governments, doctors, or other businesses to third parties. But these rights to privacy conflict with the freedom of information that democratic societies need to function properly and that businesses use to economize their operations. The guarantee of free information allows technologies such as thermal imaging, satellite imagery, global positioning, face recognition software, and biometrics to flourish; however, these technologies are accompanied by public worry about loss of privacy and loss of the ability to control information about ourselves. Accordingly, privacy has many facets: individual privacy regarding the integrity of the body; privacy regarding individual behavior; privacy regarding personal communication; and privacy regarding individual data. All of these areas of privacy are increasingly threatened in the information age (Clarke, 1999).

In this study, we focus on online privacy and investigate how consumer information is protected or exposed by online portal sites. Specifically, we examine privacy statements featured in online portals to determine their efficacy for consumers. Through the increasing sophistication of data mining tools, consumer database creation and management has become a growing, profitable enterprise. Personal data is now a tradable commodity in capitalist societies (Hamelink, 2000), and thus, the free market economy and privacy are inherently at odds with one another. Because digitally stored data can have an indefinite life span, public concern over the ability to control our own information is evident in consumer reluctance to provide personal data to online businesses (Elgesem, 1996; Fox & Lewis, 2001). The information storage and retrieval capabilities of new media technologies can facilitate the collection and exchange of customer information, often without the knowledge or permission of the consumer. Companies frequently assemble databases of extensive consumer information that they use to market to specific target populations. As a result, individuals have become wary of disclosing personal information online (Fox, 2000; Fox & Lewis, 2001). Clarke (1999) argued that those concerns over online privacy reflect larger social concerns over "trust in the information society" (p. 60).

Whether or not consumer anxiety about information gathering is warranted, the online industry has responded to public concern and consumer advocacy efforts with voluntarily posted privacy statements to alleviate those concerns. Although frequently governed by suggested industry guidelines, as specified by TRUSTe or similar industry coalitions, these privacy statements seldom provide explicit reassurance that consumer information will be kept confidential and will not be exploited. Instead, they frequently outline how companies intend to use private customer information so that, in the event of consumer complaints, the companies are absolved of responsibility. Companies such as Microsoft Passport Services are known for exploiting consumer information and were finally pressured into revising their privacy policies and statements following a series of articles originating from Salon. …