E-Commerce and Information Privacy: Reward without Risk?

Earlier this month, the U.S. Federal Trade Commission released a preliminary report containing the framework for the possible future of consumer privacy with regards to e-commerce and other forms of online communication.  One notable proposal mentioned in the report is the creation of a "Do Not Track" mechanism that, by design, would allow "consumers to opt out of the collection of information about their Internet behavior for targeted ads."  The mechanism will operate similar to a cookie and will be...

Ok, here's what I think...

In my eyes, at the heart of the issue is not the actual practice of online consumer tracking, but the associated risk of potential breaches in security.  In isolation, consumer tracking is great, and potentially beneficial to both consumers and businesses in the online marketplace.  And what’s not to love about the online marketplace?  Without having to stand up, get dressed, or speak to another person, we’re able to purchase the goods we want and need, quite often at a significant discount.  If that's not easy enough, consumer tracking attempts to simplify the process even further: performing searches and providing suggestions for the consumer, based on previously gathered information on his or her online behavior.

So what’s the big deal?            

Sadly, the world is not perfect, and neither is the online marketplace.  With the advantages provided by e-commerce and consumer tracking, comes the inherent risk that the confidentiality of [gathered and stored] consumer information will be compromised and used for deviant, non-marketing purposes.  Clearly, no one in their right mind wants to become a victim of identity theft and/or any other form of internet fraud. However, as a subscriber to the notion that technology will always outpace legislation, it is my belief that this risk cannot feasibly be eliminated by legislation alone.  Risk is reality; we must accept it and move on.

Another discomforting reality is that identity theft and other forms of information leakage are not unique to e-commerce.  For example, in 2008, the parent company of Sweetbay Supermarkets fell victim to a security breach in which 4.2 million credit and debit card numbers were compromised, with nearly 2,000 cases of fraud eventually being linked to the breach.  Essentially, whether one chooses to engage in e-commerce or not, no consumer is truly safe in the current technological climate.    

Not to say that consumer protection laws are a completely lost cause, they are certainly necessary to at least mitigate the dangers of identity theft.  However, considering again that technology is usually a few steps ahead of legislation, can consumer protection laws really be that effective without slowing down business?  Probably not, and just because our lawmakers can’t prevent fraudulent acts from occurring, does not mean that they should prevent businesses from engaging in innovative and essentially harmless marketing practices.  E-commerce is a two-way street: Businesses and consumers share the benefits.  Shouldn’t they share the risks as well?        

All in all, the relative truth of the matter is that the conveniences provided by technology and innovation go hand-in-hand with the drawbacks; they always have, they always will.  In today’s so-called post-privacy society, the identity and personal information of internet users will never be 100% safe.  To enjoy the rewards of online communication and e-commerce, one must be willing to live with the additional risk(s).  Don’t count on legislation to change that anytime soon.