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Does Anyone Read Online Privacy Policies?

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By Keith Regan
E-Commerce Times
June 15, 2001

Even though consumers are more likely to buy online if they feel their privacy is safe, very few read the privacy policies posted by Web merchants.

At Amazon.com, the link to the privacy policy is at the bottom of the home page, in small print. At Buy.com, the policy measures 10 printed pages and 5,200 words in length. To read the full policy at Outpost.com, visitors have to click out and back into the policy page at least twice.

Though the public's desire for privacy protection within e-commerce is well-documented, the vast majority of online shoppers appear unwilling to take the time to read an e-tailer's privacy policy.

"Some people read privacy policies, but it's a tiny minority," Susannah Fox, director of research at the Pew Internet and American Life Project in Washington, D.C., told the E-Commerce Times. "People aren't that aggressive when it comes to protecting their own privacy."

In fact, Forrester Research analyst Christopher Kelley told the E-Commerce Times that less than 1 percent of the visitors to six major online travel sites during April actually read privacy policies.

"Consumers are incredibly concerned about privacy," Kelley said. "But they don't want to lift a finger to protect their own privacy."

Lost Money

The failure of consumers to take an active approach to privacy would be good news for many e-tailers, except for one fact: Consumers are more likely to buy and to spend more online if they feel their privacy is safe.

As a result, e-tailers with solid privacy policies in place may have a marketing tool they can use to attract more customers -- and big spenders.

Kelley cited travel site Expedia (Nasdaq: EXPE), which "pushes" parts of its privacy message to consumers while the site locates flights matching search criteria. Three of six messages shown to customers while the search engine does its work relate to the site's privacy policy and highlight the fact that PricewaterhouseCoopers has audited and approved of it.

"That's the type of reassurance consumers need," Kelley said, recommending that e-tailers confident in their privacy policies "put them right in the face" of their customers, by showing a synopsis of the policy just before the checkout process starts, for instance.

Gray Area

It's a bit more tricky, however, for e-tailers whose privacy policies are not as cut-and-dry. Several e-commerce sites, including Amazon, have come under fire from watchdog groups for being inconsistent and hard-to-understand when it comes to privacy standards.

Consumers are apparently inclined to give even those merchants a free ride, at least for the time being. Depending on what information is at stake, however, consumers can get more aggressive.

For instance, the Pew Project's Fox said surfers visiting financial sites or seeking health information are much more likely to check out privacy statements, but still only a fraction do so.

A Matter of Trust?

On e-tail sites, people are apparently either comfortable enough to be trusting or too lazy to do anything about their concerns. At electronics e-tailer Buy.com, only about 1 percent of all visitors to the site ever click on the link to the privacy policy.

Buy.com spokesperson Kathy Beaman told the E-Commerce Times that even fewer have ever asked to opt out of data collection.

"It's a really small number," Beaman said.

Other e-tailers reported similar statistics.

Passive Resistance

Since it is not in an e-tailer's best interest for a customer's attention to be diverted away from shopping, even for a moment, even if the privacy policy contains only reassuring news, most do little to attract attention to their privacy pages.

The public isn't exactly clamoring for action. Fox said a Pew survey last summer found that more than half of all Internet users do not know what Internet cookies are, and the majority who do accept them from Web sites anyway.

In other words, information is being collected passively while a customer shops online.

Jail Time

Yet Pew's research has also revealed that Internet users want strict privacy policies and tough punishment. Many favor jail time for anyone who violates them.

"There's a disconnect there," Fox said. "Internet users express concern about online privacy, but most don't change their behavior."

Or as Kelley stated it: "Consumers want to feel safe, but they aren't willing to do the work."

For that reason, though most do not favor government intervention in the Internet as a rule, a majority of consumers welcome U.S. Federal Trade Commission (FTC) involvement in policing privacy, according to Kelley.

"There is a strong sentiment to have the FTC come in and make it safe," said Kelley. "But in the meantime, there is a great opportunity for e-tailers who have strong policies and feel confident enough to be up front about it."

See Related Stories
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