Internet Privacy for Sale. A Viable Option When Legislation, Litigation, and Business Self-Regulation Are Ineffective in Curbing the Abuses of Online Consumers' Privacy

Abstract

IntroductionWhat is privacy? In i928 landmark case Olmstead v. U.S. (277 U.S. 438), Justice Brandeis poignantly explained concept of privacy as the right to be let alone-the most comprehensive of rights and right most valued by civilized men (Id. at 478). In context of today's electronic commerce regime, an individual's online privacy right has an intrinsic double value: first, to individual online consumer; and, second, to businesses seeking to use information to market products and services directly to individual online consumer. Overwhelmingly, businesses have realized a sizable advantage over typical online consumer when it comes to revenues generated through use of online consumer privacy (personal information provided directly by consumer and her monitored site visiting habits). It is this arrangement that this paper will examine.Businesses collect online consumer data in a variety of ways. Sometimes online consumers voluntarily provide information (such as when applying for a free email account from Hotmail, Juno, and Yahoo, or requesting product information from a site) via a questionnaire. At other times, online businesses use technologies such as cookies, and Web bugs to arrive at a composite of who visitor is based on activity. Cookies, click-streaming, and bugs, are most valuable to businesses because although a consumer can be less than forthcoming when providing information on a questionnaire, these three technologies allow online businesses to build a cohesive database of online consumers' activity by tracking sites they visit. The actual data collected by tracking online consumers and building customer profiles are referred to as site visiting trends (WSVT) (Wilson, 2002).A leading Internet research organization that studies Internet businesses and technology trends predicted that revenue generated by use of Internet would exceed two trillion dollars by end of 2003 (as cited by Safier, 2000). Businesses recognize value of WSVT. According to Interactive Advertising Bureau's Internet Ad Revenue Report (which is conducted independently by PricewaterhouseCoopers), U.S. businesses spent more than $7.3 billion in online advertising during year ending 200i (Interactive Advertising Bureau, 200i). Taking into account sizeable revenue coupled with high advertising costs, it is a small wonder that current regimes designed to protect online consumers' privacy do not go far enough.This research surveyed several popular online consumer data collection techniques; legislation and litigation a∂ecting online consumers' privacy; online consumer privacy watchdog groups; past applications of online consumer privacy exchanges; comparison of online consumer data protection in European Union; and, ultimately, introduces concept of commoditizing online consumers' privacy (a mechanism to exchange an individual's privacy right with businesses willing to provide a product or service) as a viable alternative to legislation, litigation, and self-regulation by businesses-each of which have not provided adequate protection for online consumers' privacy rights.Web Site Visiting Trends Data Collection TechniquesCookies. A cookie, considered a controversial tool for consumer tracking, allows a computer server to remember your visit to a web site (Berners-Lee, 2000). More specifically,[a] cookie is a small amount of data sent back from server to be stored on [a consumer's] computer, which server can...access later. All cookies are concatenated into a single cookie file on [the consumer's] computer. This file contains all active cookies from all sites [the consumer] visited. [The] cookie file might contain account information, or any other information associated with a specific session, which a server doesn't want to keep on hand, but needs to refer to again later. …