Commentary: Building Consumer Trust in a Changing Online World

June 24, 2015



Working for Starwave Corporation during the early stages of the commercial internet in the 1990s, I wrote one of the first privacy policies for the popular ESPNet SportsZone online service. The site had rapidly gained an international audience. We gathered in a conference room with chips and soda to celebrate our first million hit day.

Starwaves management team, led by CEO Mike Slade,
thought it would be good for our website visitors to know what information we collected about users visiting our site, and what we did with it. The privacy policy was one page long. A few days ago, I checked the Walt Disney Company privacy policy that now governs the ESPN website. It runs 12 pages, with additional sections for California Privacy Rights and privacy controls.

In the past two decades, the internet has evolved from mimicking broadcast media advertising practices to gathering user data and analyzing it to deliver an array of content and advertising vehicles. Billions of dollars are spent annually to improve the underlying analytic platforms for Google, Facebook, Amazon and other leading commerce and search businesses.

As online businesses rely more on our personal data, privacy concerns play an increasingly important role in product decisions. Public trust has withered with the federal governments abuse of the Patriot Act and well-publicized data breaches involving Anthem, Target and Premera. This loss of consumer trust has reshaped the publics view of the commercial internet and given rise to a new privacy consciousness, which defines the operating environment for everyone who does business online.

Ninety-one percent of American adults now agree or strongly agree that consumers have lost control over how their personal information is collected and used by companies, according to a November 2014 Pew Research survey. People feel increasingly exposed by information they share voluntarily or without specific consent on mobile platforms. Several United States senators urged the Federal Trade Commission to investigate Verizon when its secret practice of utilizing super cookies to track the web browsing habits of its 100 million users became known. Verizon did not offer its customers an opt-out mechanism for these super cookies until the end of March.

In this atmosphere of mistrust, businesses especially Washington states tech leaders might consider leveraging good privacy practices as a way to win over skeptical consumers:

Twenty-seven percent of American millennials reported that they had abandoned an online purchase in the past month due to a privacy or security concern, according to a Raytheon-National Cyber Security Alliance study.

Three-quarters of adults indicate a high sensitivity to privacy issues, peaking at 83 percent of those in the 46-to-65 age group. (See The Eye of the Beholder, by Andrew Serwin and Tina Stow.)

It makes sense that building trust with consumers will not only address their privacy concerns but also foster a more durable and profitable business relationship. Companies that embrace this philosophy must, at minimum, build a culture around the following practices:

1. Transparency regarding the collection and specific use of personal information provided by customers.
2. Flexibility and choice regarding spheres of sharing of data provided by customers. For example, make sharing with affiliates or vendors an opt in choice rather than an opt out.
3. Adopt reasonable policies regarding data retention and give consumers access to personal information they store.
4. Establish accountability, not just with respect to legal requirements but honoring consumers rights to the ownership and use of their personal information.
5. Implement a companywide cyber security plan, which incorporates risk assessment, employee training, monitoring threats, and clearly reporting cyber attacks and data breaches.

This is by no means an exhaustive list of ideas or tools to enhance privacy and security. Business no longer operates in a climate where privacy is an add-on requirement prompted by government or consumer advocates. When companies understand that adopting privacy as a core value will build enduring relationships, everyone will profit.

Alex Alben, a high-tech industry veteran, is chief privacy officer for the state of Washington. The opinions expressed here are his own.