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Paying for online privacy

Internet attorney Eric J. Sinrod says a new report detailing online consumer behavior speaks volumes about frustration levels.

Countless studies quote consumers saying they care about their privacy on the Internet. However, simply stating concern about privacy is a far cry from actually taking steps to protect one's own privacy in cyberspace.

Indeed, many consumers do not even check Web site privacy policies when they divulge their sensitive personally identifiable information. Yet, according to a recent report, when consumers are given a specific choice, many may actually pay more money during a transaction in return for privacy protection.

The report, prepared by Lorrie Cranor, who directs the Carnegie Mellon Usable Privacy and Security Labs, documents that consumers would pay an extra 60 cents for privacy protection on purchases of $15. Cranor came to this result by way of a hypothetical experiment.

In the experiment, participants were asked to buy a set of batteries and a sex toy. The sex toy was added into the mix to ascertain whether consumers might take extra steps to protect their personally identifiable information as part of this sensitive transaction. Interestingly, when participants had the option of making these purchases from a site that clearly posted its privacy policy and another that did not do so, they were inclined to pay a bit more to go with the site that plainly set forth its privacy policy.

Of course, it is possible that the participants were more sensitive to their privacy when dealing with a sex toy purchase than they would be when purchasing more routine items. Yet, the implications of personally identifiable information getting into the wrong hands can be significant even when obtained from routine purchase transactions.

The study included only 72 participants. Thus, it is far from conclusive. A real-world experience would be more telling. If two companies offered similar competing products for sale on the Internet, only one of the two companies clearly provided written assurances of privacy protection for an extra cost, and consumers chose to purchase the products from that company for a higher price, that would really indicate something serious.

In the meantime, talk is cheap. If you want your privacy to be protected, be careful out there, and examine how companies handle your personally identifiable data.