U.S. to track impact of e-commerce

The secretary of the U.S. Commerce Department today announced that the government will begin publishing figures for the first time that will show the impact of online shopping on retail activity, considered a major indicator of the country's economic health.

With the dramatic growth of sales over the Internet, Commerce Secretary William Daley, along with Federal Trade Commission chairman Robert Pitofsky, also underscored the importance of establishing strong and sound consumer safeguards on the Net.

Economic indicators help quantify how the economy has been doing, and also help to project how it may do. Other indicators include the Consumer Price Index, which measures changes in prices for housing, electricity, and transportation; Gross National Product, which measures the value of all the goods and services produced; and Housing Starts, which measure the rate of residential construction.

Until now, the Commerce Department had lumped online shopping figures with catalog sales in its overall retail sales numbers. The new e-commerce numbers for 1998 and 1999 will be available in mid-2000, Daley said.

The Commerce secretary added that online shopping is booming, with consumers surpassing expectations by spending some $9 billion last year. The proportion of retailers selling on the Net tripled in just one year, from 12 percent in 1997 to 39 percent in 1998, the government said.

The department added that e-commerce is expected to generate $30 billion in the year 2000.

But both Daley and Pitofsky warned that the Internet would not reach its full potential as a driving force in the U.S. economy unless consumers feel confident that the privacy of their transactions is protected.

The government said that 86 percent of Net users who buy products and services online are concerned about threats to their personal privacy, with more than half very concerned.

"If 86 percent of Americans can agree on something, you know this is a serious matter," said Daley. "Chairman Pitofsky and I have asked businesses to step up to the plate on this issue and regulate themselves--it has taken some prodding."

Daley noted, however, that progress has been made.

Online Privacy Alliance has signed up more than 80 companies and associations that have adopted privacy protection principles, and the Better Business Bureau is developing a privacy program, the government said.

"Establishing consumer confidence in the electronic commerce marketplace can best be done by government, business, and consumer advocates working together to minimize fraud and deception online," said Pitofsky.

The FTC has developed tips for consumers shopping online: