Question

Privacy and security are two key reasons consumers are leery of online shopping and buying. A recent Jupiter Research poll reported that 70 percent of online consumers are concerned about threats to their personal privacy on the Internet. Even more telling, 53 percent have stopped shopping a website or forgone an online purchase because of privacy concerns. Industry analysts estimate that low consumer confidence in privacy and security resulted in lost sales of $24.5 billion in 2006.

The privacy and security concerns of online consumers are related to the cookies described in the text and how those cookies can be used or misused. A percolating issue is whether the U.S. government should pass more stringent Internet privacy laws. About 70 percent of online consumers favor such action. Companies have adopted initiatives to develop their own privacy standards government action.

Do you think that governmental or self-regulation is the best way to deal with issues of privacy and security in the new market space?

Answer 1

We are discussing about the privacy issue when the huge data breach case of Facebook is underway. Over the years we have heard of multiple cases where the companies were unable to secure the consumer data to get compromized. This is a serious issue as more and more such cases are coming on the surface.

Let's look at the facts regarding the online privacy concern. Any online platform is supposed to ask for customer's permission before utilizing any of their data. Now more often than not, the customers agree to the 'Terms and Conditions' without even going through it. But in no means this gives the companies the right to share these data with any other organization. However there is hardly any chance to verify if this is being followed by the companies or not. Facebook's case coming out in the open is really believed to be a sample issue. A lot of other companies may also misuse the data, without getting caught.

Now coming to the online shopping websites. Shopping pattern tells a lot about the behavior of the particular consumer. Hence this is considered to be a very importatn source for the companies. But the other data, which is available with the shopping platforms, and is a very critical data, is the payment card details. This data going into the wrong hands can greatly impact the users from around the world.

Now as I have already mentioned that it is not really a piece of cake to verify if the data is being misused or not, the government has no option but to interfere. In the current genaration of IOT and AI, the base of all these advancements is the connected world, where all the different parts (gadgets in this case) are connected to each other. So it is really expected that the companies will follow the ethical way of operation. As much as we, as customers, want our life to be easier through a connected world, we would never want this to happen at the cost of our privacy. Hence at this point of time, government regulation seems to be the only way to keep the companies in control.