November 12, 1999 Web posted at: 9:18 a.m. EST (1418 GMT) by Marc Songini

From...

(IDG) -- If you're looking to cash in on the Web, start thinking about privacy for your customers.

Customers are demanding their e-business vendors proactively shape procedures to protect their privacy during online shopping. That's what a recently released IBM Multi-National Consumer Privacy Study indicates. IBM this week posted some of the findings of the 300-hundred page report on its Web site.

Big Blue says its survey, conducted by Internet marketing research firm Harris Interactive, measured consumer attitudes towards privacy for day to day business transactions. IBM's study of 3,000 consumers in the U.S., the U.K. and Germany revealed a "universal" interest in keeping personal information confidential. In turn, those online companies that provide sound privacy policies are going to have the edge in online commerce over those companies that don't.

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Among the more interesting claims is one that Internet consumers who typically have a higher level of education and more disposable income than regular consumers, as well as some high-tech know-how, are more likely to be concerned about privacy and will be defensive about releasing personal data.

Some of the other findings:

*Almost half the U.S and the U.K. respondents want their e-commerce vendors to post a privacy statement on their Web sites. This statement would define explicitly how any information gathered, be it names, item purchased or money spent - is used. Sixty-three percent of the Internet respondents say they refused to give information to a Web site when there was no policy and they feared personal information would be vulnerable.

*Forty percent of the Web users polled say they decided not buy something because of privacy fears.

*Of the American consumers: 78% refused to give information online; 54% left the site without buying; and 64% believe most businesses handle confidential data carefully.

*Internet businesses were less trusted than traditional ones to protect confidential data.

*Consumers want a privacy policy in place online, despite whatever the law of their particular country demands for e-commerce.

Moreover, IBM is conducting another survey of executives in the health care, financial services, insurance and retail industries. The preliminary data indicates that customers have less confidence that their privacy is being protected than executives in these industries realize, IBM says. Additionally, these executives underestimate just how far online consumers will go to protect their privacy.

IBM has been one of the more vocal proponents of strict privacy policies. "IBM knows e-business won't succeed unless there is trust and confidence in the medium," says Harriet Pearson, IBM's director of public affairs, human resources and privacy. The company has posted a privacy policy statement on its Web site that states the company won't use any information collected from the customer without the customer's consent. Typically, IBM would take the data and share it with its business partners to help improve services or to gather warranty information, she says.

Pearson says IBM is also active in industry organizations working to shape privacy polices for the Internet.