Putting the Customer First On the Web

Much like advertising via fax, phone and mail is regulated by do-not-contact lists and other rules, the Internet has become the newest consumer privacy hotspot. Watchdog and consumer groups speak up on the issue regularly, stating that as the Internet has grown, so too have the number of chances to defraud consumers and violate their privacy online.

Now the government is stepping in. To come to the aid of frustrated consumers who don’t want their Internet activities tracked by “cookies,” and those that have been victimized by online identify theft, the Federal Trade Commission (FTC) and the Department of Commerce have proposed several new consumer privacy rules. In December, the FTC proposed an increase in the protection of consumers’ commercial data in a way that doesn’t hamper innovation and evolving technology.

In other words, the government wants to use regulation to walk the tightrope between preserving consumer trust while also supporting the $10 billion in global transactions that take place online every year (and the jobs and economic growth associated with the sector). Its recommendations include the adoption of a “privacy by design” approach that would find companies building privacy protections into their everyday business practices, including reasonable security for consumer data, limited collection and retention of such data and reasonable procedures to promote data accuracy.

Part of the government’s plan includes a Do-Not-Track mechanism for online advertising. A persistent setting (similar to a cookie) that is placed on consumers’ Web browsers, the mechanism would let buyers choose whether to allow the collection of data regarding their online searching and browsing activities, or not.

There’s no question that consumers need better online protections, mainly because so many of them don’t realize how vulnerable they — and their private information — are online. A recent survey from Anonymizer Inc., a provider of online anonymity solutions, found that 75 percent of people thought a firewall offered them enough protection to safeguard their identities online. Another 62 percent believed antivirus software was enough protection against malware.

The report also found that:

• When they’re online, consumers are most concerned about identity theft (45 percent), privacy (41 percent) and computer viruses (45 percent).
• Consumers are increasingly aware that their mobile devices are also vulnerable to malicious cyberactivity — only 28 percent thought that their identities were secure on a mobile device.
• Eighty-five percent of respondents were aware that they were being profiled by advertisers as they surfed the Internet.
• Eighty-five percent said they were aware that they were being stalked by cybercriminals.

While consumers know that danger is lurking online, very few of them make the effort to avoid it. The government’s stance on this issue is a double-edged sword for marketers. On one hand, the tracking mechanism would allow companies to deliver more relevant, pertinent ads to a smaller group of interested buyers — instead of distributing them to the masses. Search results would be more useful for cybersurfers, who up until now have been fielding random ads that aren’t always on target.

On the negative side, a clampdown on a medium that’s been largely “open” since going commercial in the 1990s could hamper business, and take away luxuries like password and account information retention (so that consumers don’t have to retype their information every time they log in, or place an order).

Whether Washington’s “Do-Not-Track” rule for the Internet passes muster or not, there is clearly a need for better consumer protection online. By taking proactive measures to respect everyone’s privacy when doing business online, advertisers can get ahead of the game and position themselves as responsible companies that put their customers’ needs first.