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Howard's End: US Sets Trend For Privacy Issues

Privacy issues are reaching the courts in growing numbers and are having a crippling effect on companies. On Monday yet another US company was sued for attempting to sell its customer information along with the rest of its assets. John Howard writes.

The message coming through right now is that if you are even thinking of disclosing or selling the private information of one of your customers - Don't.

On Monday, the US Federal Trade Commssion sued the now-defunct Toysmart.com website for attempting to sell its customer information along with the rest of its assets.

This law suit is just the latest in a long list of global companies who are now finding the temptation to sell-off or use its customer base against its rivals may bring catastrophic financial penalities or damages.

Companies who ask for a customer's age or gender as a requirement for suscribing to a new e-mail newsletter, for example, could likely face privacy claims - and possible damages.

The simple message is that if it is not relevant - don't ask.

Many consumers are now becoming increasingly concerned about privacy issues because of technology which is able to track Internet users click by click.

But it is not just localised to the Internet. Corporate priorities are shifting even in traditional companies with the litmus test for consumer acceptance of the company and its products now being a dedicated policy to privacy issues.

"Privacy issues went from being a minor issue in most companies to something which could threaten their basic revenue model, or make their costly merger turn to dust," says Alan Westlin who helped write the US Privacy Act of 1974.

"Companies failed to fully address the privacy issue for two decades. But that's changed because of recent lawsuits by consumers alleging loss of privacy and high-profile publicity surrounding how easy it is to track people with technology," he said.

Too often, companies who face stiff competition start thinking about using customer information as leverage over their competitors. The temptation can be powerful, but it must be rejected because it can damage a company more than any rival can.

Frequently, consumers will voluntarily disclose personal information from income to e-mail addresses, but that information does not belong to anybody but the person who discloses it.

Many of the global corporate icons like American Express and AT&T are clearly worried that their privacy policies are not keeping pace with new technology and they have hired or are hiring, privacy officers and placing them at the top of the corporate ladder.

Companies are seeking people who have a knowledge of history and law and know something about technology so that they can't be techno-dazzled by explanations that don't hold water.

In addition to any privacy laws, consumers also have a right not to be indexed - a right to encrypt personal communications - a right to fair treatment in public key infrastructures so that no person is unfairly excluded in a way that would prejudice that person's ability to protect their privacy - a right going beyond the OECD openness principle, of disclosure of the collections to which others will have access and which affect the projection of the profile of the individual concerned.

Companies wanting to avoid allegations of privacy breaches and the public relations and financial nightmare which goes with that, and if they want to protect their consumers from privacy invasions, a dedicated privacy policy might not be a bad idea.

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