The Toronto Star
Friday, April 3, 1998

Net firms must assure privacy

by Valerie Lawton

All those lofty predictions about the promise of electronic commerce will go nowhere unless privacy and security issues are resolved.

Ontario's privacy commissioner, Ann Cavoukian, makes the point well in a report released yesterday - Privacy: The Key to Electronic Commerce.

Her message is for companies hoping to cash in on the Internet and for consumers, who also have a role to play in making it a safe place to go shopping and browsing.

"The heights of success that have been predicted for E-commerce are falling way short of the expectations", Cavoukian said in an interview. "They've been greatly overhyped, with the exception of pay-per-view pornographic sites and gambling. Very little money is being made on the Web."

One estimate pegs 1997 online sales at more than $2 billion. Some predict that will grow to $220 billion by 2001. But the potential for the abuse of people's privacy remains an obstacle.

Polls show people are increasingly nervous about their privacy on the Internet.

A survey for Business Week published last month found the Number 1 reason people are staying off the Net is not cost or ease of use. It's privacy.

Even among those who like the Internet, 78 per cent said they'd use it more if privacy were guaranteed.

The latest annual survey by the Georgia Institute of Technology also showed privacy had overtaken all other concerns among Net users.

That poll found many people lie when Web sites ask for information because they don't know what's going to be done with the details they're being asked to supply.

"People are very apprehensive about the reuse of their information", said Cavoukian.

They're right to be worried.

Personal information - what you buy, where you buy it, how much you earn - is valuable. The market value of personal information is reportedly worth $3 billion in the United States.

And some of that information is being collected via the Internet, where every mouse click through a Web site can be monitored, logged and linked back to you.

Breaches of privacy can also be inadvertent.

The Canadian Imperial Bank of Commerce's discount brokerage electronically shipped out the E-mail addresses and account numbers of almost 500 clients to people on a mailing list. Investor's Edge blamed human error for the recent glitch.

Regulation in the whole area of privacy and businesses has fallen short of what's needed.

Canada is still working on privacy legislation that will cover the private sector.

The United States has strongly favoured self- regulation. The U.S. Federal Trade Commission, however, has suggested government will step in if companies with Web sites don't calm consumer fears about privacy.

Americans have complained to the FTC about Internet access to social security numbers and unlisted phone numbers and the creation of individual profiles of buying patterns.

The commission is taking a close look at the privacy policies of Web sites.

Germany is ahead of North America. Internet service providers there must offer customers the option of use and payment either anonymously or under a pseudonym.

Hopefully, Cavoukian's report will serve as yet another message to businesses that they have to address privacy concerns.

Some have taken the issue seriously but anyone who has spent any time surfing the Internet knows there are plenty of Web sites that reveal nothing about privacy policies and practices.

There are self-interested reasons for businesses to care about privacy.

E-commerce will only sputter along until consumers trust Web site operators with their information.

Cavoukian notes one of the most successful Internet merchants - bookseller amazon.com - has strong privacy policies, including a promise not to sell lists of what people are buying.

Businesses whose marketing plans rely on information supplied by Web site visitors risk collecting more lies than valuable data unless people know what's going to be done with it.

Cavoukian also wants to send a "wake-up call" to Internet users to educate themselves about online privacy issues and look for signs that the company they're dealing will protect information.

"Always look for something that will indicate a level of trust and what their privacy practices are", says Cavoukian.

"If they follow a privacy policy, they'll indicate that right up front on the home page. You'll be able to click on to their privacy policy and go and look at what their practices are with respect to resale of your information.

"If you don't see it, don't give any information over a Web page."

The report is available at http://www.ipc.on.ca.

Copyright © 1998 by The Toronto Star. All Rights Reserved. Reprinted with permission.