Privacy and Ethical Issues in Database/Interactive Marketing and Public Policy

Topics: Marketing, Privacy, Business Pages: 3 (634 words) Published: October 8, 2008
1997). To entice consumers
to participate in the world of e-commerce, which is
relatively unregulated, it is important for marketers to follow ethical behavior and protect consumer privacy.
In an effort to balance commerce with consumer privacy
needs, the Federal Trade Commission (FTC) has relied on
fair information principles to guide privacy regulation and
industry practice in the United States (FTC 1999b). These
principles include notice/awareness, choice/consent,
access/participation, security/integrity, and redress/enforcement (see the following articles in this special issue for more
details: Caudill and Murphy 2000; Culnan 2000; Sheehan
and Hoy 2000). Despite industry self-regulation efforts,
many database marketers are not following fair information
practices. In a survey of 365 organizations belonging to the Direct Marketing Association, Milne and Boza (1998) find
that 38% of the organizations notify customers about the
gathering of personal information, 33% indicate the use of
the information, and 26% ask for permission to use the
information. These results show that less than half the organizations surveyed practice the fair information principles of
notice and choice. The lack of adherence to fair information principles has also been found among organizations that use
Web sites to collect personal information. The FTC’s study of 1400 Web sites finds that only 14% post notices or disclosures on Web pages (FTC 1998). Current research on
information practices reported on Web sites in the
Georgetown study (Culnan 2000) and retailer Web sites
(Miyazaki and Fernandez 2000) suggests that the disclosure
rate has improved. Still, there is much room for improvement, as is evidenced by the FTC report on self-regulation
and privacy online, which notes that the Georgetown study
finds that only 10% of the 361 organization Web sites practice all four substantive fair information practices of notice,
choice, access, and security (FTC 1999b,...
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