In electronic commerce, the boundaries between privacy and access may never be drawn if consumers are not notified when personal information is used by marketers, says a report released Monday by the Federal Trade Commission staff.
"The proliferation of readily available personal information ... could jeopardize personal privacy and facilitate fraud and deception," the report concludes. "These risks may make consumers reluctant to use the Internet or participate in online transactions and therefore could prevent consumers from obtaining the benefits promised by online commerce."
The report reinforces the e-commerce policies now being defined by the Clinton administration, which is calling for a "market-based approach to privacy." A White House task force recommended in 1995 that e-commerce be based on two principles: informing consumers of information collected by data-gatherers, and providing consumers with a realistic way to limit the use and re-use of their personal data. But marketers are unsure of how - or when - these policies will be implemented.
The FTC, which based the report on a conference last June, warned that in a medium which capitalizes on one-to-one marketing, children are especially vulnerable to marketing tactics. For example, children are more likely to sign guest books and registration forms than adults, which could then be used for targeted selling. And marketers could deploy fictional characters through email correspondences urging children to buy specific products.
"The safeguards of traditional broadcast media, which bar 'host selling' and require separation between program, editorial, and advertising, do not currently exist online," the report says.
The agency recommended a follow-up workshop to address e-commerce privacy issues.
