What is the Value of E-Privacy Policy

5.1

An E-privacy Policy may be regarded as a way of differentiating competing providers. The value of formulating, adopting and demonstrating exemplary E-Privacy practices lies in the rewards it yields. Not the least of these is the relationship that continues to exist between buyers and sellers over the long-term. The growth pattern of successful organisations is testimony to the view that there is no business like old business and anything that puts old business at risk is bad
for business.

5.2

The importance of this assertion can perhaps best be illustrated by looking at one of the most distinguishing features of E-Business; its lack of obvious physical presence. One of the contemporary cliches is that the Internet is everywhere, yet nowhere. The consequence of not having a 'bricks and mortar' identity gives rise to concern, notably when things go wrong. In the physical world a concerted attempt can be made to right any injustices. In the cyber world righting any wrongs can be a lot more problematic, if not near impossible. Direct experience of this, or the perception that something untoward may occur, is sufficient justification to reject online transactions as a means of consumption. Such a mentality poses a major obstacle in attempts to unlock the consumer power of the Internet.

5.3

Against this background the best way to answer the question posed is to look at the consequences of not being proactive in developing an E-Privacy Policy. The risks are considerable.

• Damage to the Bottom Line
  If E-Business is conducted in a manner that pays scant regard to the privacy needs of the consumer, or in any way deludes the consumer, then the reaction from the marketplace will be swift. Consumer blacklisting or boycotting of providers is serious enough, but is made more so by the speed with which bad news travels over the Internet. It is likely that infringements of personal data privacy will have an adverse and almost immediate impact upon the provider's bottom line. If this were not sufficient cause for concern, then the loss to potential business should convince the most sceptical.
• Potential Damage to Customer Loyalty
  Consumers can be very unforgiving of the mis-management of their personal data. They express that dissatisfaction by voting with their money and electing not to spend, or to spend offline. Having worked and invested to build customer loyalty and brand equity it is prudent to enhance those assets by adopting an E-Privacy Policy that protects the personal data of consumers.
• Expanded Legal Framework and Regulation
  National laws on privacy, directives issued by powerful trading blocs such as the European Union, international conventions and codes of practice pertaining to the management of personal data in specific contexts e.g. medical data, all indicate that nationally and internationally, governments are taking strong measures to protect personal data privacy. The complexity, diversity and popularity of these laws
  suggest that a priority has been attached to privacy as an item of public policy. That policy demands industry leadership and self-regulation initiatives that communicate the importance attached to personal data privacy.
• The Risk of Litigation
  The consequence of non-compliance with privacy laws means that providers run an increased risk of litigation. That is certainly the case in the USA where courts have ruled in favour of the plaintiff and required defendants to make financial restitution for violating privacy rights. It is likely that early precedents will give rise to growing consumer awareness, and more litigation. In implementing appropriate E-Privacy policies, Hong Kong providers are more likely to remain on the right side of the law.
• Unfavourable Publicity
  No responsible provider wants to invite a public relations disaster because the media, or an Internet watchdog, has identified and publicised the mis-management of personal data on their site. Negative publicity can seriously damage the image and reputation of a provider and erode business prospects.

5.4

Any one of these reasons makes a good case for implementing an E-Privacy Policy; collectively, they make a very convincing case. Given the tendency for providers to collect more personal data, rather than less, it is unsurprising that consumers are increasingly cautious about releasing potentially sensitive information. First of all the Internet is an inherently insecure medium. A transmission on the Internet is potentially an open broadcast to the cyber world. Any sense of insecurity this may generate is accentuated by concerns over the access and use of personal data for unprescribed or unlawful purposes.

5.5

It is considerations such as these that are fostering a desire on the part of online users to retake control of their personal data. This means that the individual will decide whether to withhold or release personal data, and the basis upon which that decision will be made. Clearly this highlights the significance attached to the concept of informed choice which enables consumers to be selective in the disclosure of their personal data.

5.6

The reservations expressed by potential consumers towards Internet based transactions is, in part, a direct reaction to the belief that trust and confidence are not yet the hallmarks of E-Business. One of the critical factors in determining the success of an E-Privacy Policy must be the extent to which trust and confidence are associated with the operations of any single provider.

5.7

A longer-term benefit to be derived from the trust and confidence issue is that exemplary E-Privacy practices may well be instrumental in converting offline consumers to online consumers. If providers can convincingly demonstrate that privacy concerns around personal data and the integrity of financial transactions are unfounded then this may facilitate a change in consumer habits thereby eroding the percentage of Internet users that currently reject online services.