Amazon has come under fire over the last few days for problems with its privacy policy.
Since it changed its customer privacy policy, Amazon has come under pressure, both in the UK and the US, from consumer groups such as Privacy International. The eTailer has a customer database with over 23 million records, an important tool in reducing customer acquisition costs, building loyalty and adding value to the site. It used to declare it did not share customer data with third parties. But it has removed this notice from its site, and is also accused of transferring data between its US and UK sites.
The UK has more stringent data protection laws than many countries. Any organization holding computer data of individuals’ details must either be able to provide them with the details held, or have the data deleted. It appears that Amazon’s systems, developed in the US, may not be able to do this. This relates to the recent Yahoo! France case, and teaches the same lesson – eCommerce companies that want to go global need to respect the laws of the countries in which they want to do business, even when these differ from those in force in their home country.
But the change of privacy policy raises a different concern, common to consumers around the world. Worries about eSecurity are still a critical barrier to online purchasing. Data protection and respect for privacy are at the forefront of eConsumers’ minds. Many feel that whether or not it is breaking the law, Amazon should lead by example on this issue. If a category-leading B2C site is perceived not to uphold consumer rights, what chance the rest of the industry?
Both problems will hold back eCommerce for the foreseeable future. Even if Amazon decides that keeping customers happy is more important than making short term gains from selling its databases, and even if it has modified its systems to reflect UK law, similar issues will continue to arise involving other firms and other geographies. The only way to solve these problems may be through international agreements between governments.
