THE PROCESSING OF PERSONAL INFORMATION IN THE E-COMMERCE ENVIRONMENT
1.0 The cyberspace intensive environment and flourishing of E-Commerce have created opportunities as well as posed new treats to the way we manage and share information about us.
2.0 Individuals’ personal data, for example, on an individual’s financial and credit card records could easily be obtained, accessed, transferred, and illegally used by unauthorized persons.[1]
3.0 Furthermore, companies can now easily gather, analyze and market customer data throughout the world.
4.0 Multinational sourcing of data-based tasks is one of the practices that have become widespread as a result of the Internet.
5.0 The low costs of storing and processing information and the ease of data collection have resulted in the prevalence of data warehousing[2] and data creep[3].
6.0 These trends result in an increasing amount of personal data collection and whenever any of these practices involve international transfers of data, differences in data protection schemes give rise to conflict.[4]
7.0 At the practical level, such activities raise at least four kinds of privacy concerns.
8.0 First, databases can be used to process sensitive information which potentially embarrassing or highly personal information.
9.0 Second, data matching can be created, composed of non-sensitive information in such enormous quantities that the database constitutes a highly detailed of a person’s existence.
10.0 Third, the information contained in E-consumer profiles can be quite inaccurate. Finally, there are no meaningful legal requirements that personal information in E-consumer profiles can be kept securely.
11.0 If used improperly, the detail contained in E-consumer profiles can facilitate crimes such as identity theft, stalking or harassment.[5]
12.0 From the businesses perspective, markets tend to achieve maximum economic efficiency with maximum information.
13.0 In this context, privacy rights become an issue because strong privacy rights restrict the potential availability of highly relevant information potentially leading to adverse selection or inefficient allocation of resources.
14.0 In contrast, a week data protection laws enable businesses to make more informed choices and mass customization of products.[6]
15.0 In addition, the public understanding of technology and data is arguably minimal.
16.0 Accordingly, individuals may not have a strong sense of the information privacy they want or need.
17.0 Some individuals may be very sensitive to use of their personal information and others may not notice or particularly care.
18.0 Studies tend to show that consumers do not have a particularly good understanding of personal data collection.
19.0 In such a climate, the adopted law should not have large loopholes and weak enforcement mechanisms.[7]
20.0 Another important issue is the compliance costs arising from the law. Economists argue that governments should minimize compliance costs imposed by legislation as much as possible because there is a negative impact on society and the economy where these costs are excessive.
21.0 Specifically, excessive compliance costs divert resources away from the core interests the business is engaged.[8]
22.0 This leaves less money for expansion and investment in research and development.
23.0 These arguments reflect extreme positions.
24.0 Whatever data concerning individuals is collected in the E-Commerce environment and however it is to be used, the laws governing data protection must be considered.
25.0 Therefore, the need is to develop a balance approach to free trade and privacy protection.
[1] Jan Samoriski,Issues in Cyberspace : Communication, Technology Law, and Society on the Internet Frontier,, (Allyn & Bacon Boston 2002),
[3] Collection of increasingly minute details about an individual that allow an extensive profile to be assembled.
[4] Ryan Moshell, "…And Then There Was One: The Outlook For A Self-Regulatory United States Amidst A Global Trend Toward Comprehensive Data Protection" (2005) 37 Texas Tech Law Review 357,online,accessed on July 6th 2005,available at http://web.lexis-nexis.com/universe/document
[5] Neil M. Richards, "Reconciling Data Privacy And The First Amendment" (2005) 52 University of Carlifornia Law Review 1149,online,accessed on July 6th 2005,available at http://web.lexis-nexis.com/universe/document
[6] Shubhankar Dam, "Remedying A Technological Challenge: Individual Privacy And Market Efficiency; Issues and Perspectives On The Law relating To Data Protection" (2005) 15 337,online,accessed on September 13th 2005,available at http://web.lexis-nexis.com/universe/document.
[7] Alexandra T. McKay, "Privacy Act: A First Step On The Road To Privacy" (2005) 14 Pacific Rim Law & Policy Journal,online,accessed on May 24th 2006,available at http://web.lexis-nexis.com/universe/document.
[8] Emma Harding, "Compliance Costs and the Privacy Act 1993: Perception or Reality For Organisations in New Zealand?" (2005) 36 Victoria University of Wellington Law Review 529,online,accessed on June 27th 2006,available at http://web.lexis-nexis.com/universe/document.
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