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Companies dinged on Web privacy

Drug and food companies receive poor marks in a new study examining how companies handle data they collect via the Web.

It may not come as a surprise to many online shoppers, but a new study released this week shows that many major American companies misuse information they collect from consumers over the Web.

The Customer Respect Group, the Boston research firm that conducted the study, rated the privacy practices of a whopping 72 percent of 464 North American companies it surveyed earlier this year as "poor" with respect to reusing personal data for marketing purposes.

A minority--42 percent--had policies the research firm deemed "good" with respect to keeping customer data out of the hands of other companies.

Pharmaceutical and health care firms performed the worst in the privacy study, with an average overall score of 5.4 out of 10. Others at the bottom of the list include insurance firms and companies in the food, beverage and tobacco industries. Airlines scored the highest with a rating of 7.3, followed by computer companies.

The research group examined more than 20 factors in assigning online-privacy scores, including the clarity of policies, whether the company seeks permission to use data, with whom they share data and customer control over the information. Nearly a quarter of the companies in the study allow users to destroy their own information stored on corporate databases.

The top 10 performers include many big high-tech names, such as Intel, Expedia, E-loan, Verizon Wireless, Orbitz and IBM.

The study also found that more companies have online-privacy policies and secure online forms than a year ago, while the use of cookies has more than doubled to 20 percent over that time.

Although there's room for improvement, the privacy scores are getting better, the Customer Respect Group said.

"Overall, companies are becoming more aware of the privacy concerns of users and, more importantly, they are beginning to act on this awareness by developing respectful privacy principles," a representative of the research firm said in an e-mail.