The FTC has decided that Amazon.com should not be penalized for its data collection practices.
Privacy advocates have been outraged by the US Federal Trade Commission’s decision not to recommend penalties against Amazon.com for its seemingly deceptive data collection practices. Last fall the Internet retailer altered its own privacy policy to make provisions for releasing a customer’s account and personal information, including exchanging information for fraud protection and credit risk reduction. There is no longer even the opportunity for a consumer to deliberately request that Amazon.com does not share its personal profiles with other companies.
It is currently possible for individuals to update their profiles on pages listed in the What Information Can I Access? section, such as deleting or changing credit card information. When you update this information however, Amazon.com still keeps a copy of the prior version for its records. In other words, once you submit any kind of personal data, it’s there for keeps. The biggest problem with this custom is that Amazon has so many other online partners, such as HomeGrocer.com and DrugStore.com, with whom it shares customers’ data back and forth, that its privacy policy has to be so broad that it is virtually ineffective.
Online companies interested in doing business both domestically and internationally must start to take privacy issues very seriously because even one mistake could devastate their reputations. The past five years has seen legislation passed ranging from the Gramm-Leach-Bliley financial privacy law to the Health Insurance Portability and Accountability Act (HIPAA). All of this legislation has been designed with one specific purpose – to protect the consumer’s personal data. Software companies such as Zero Knowledge Systems have even had the foresight to recognize the importance of privacy in the creation of their Freedom 2.0 Internet Privacy Suite that provides the user with untraceable encrypted email and web-browsing capabilities.
Amazon.com is going to have to tread the privacy line very carefully if it wishes to maintain its strategic alliances and loyal customer base. B2C eCommerce is still in its infancy and will only perpetuate and grow if topics such as online security are addressed seriously and responsibly. Consumer advocacy groups are watching every step and they will not tolerate mediocrity.
