Study: Sites Tightening Web Privacy

Online privacy practices appear to be tightening, according to new findings from the nonprofit Progress & Freedom Foundation.

The findings, based on a survey administered by Ernst & Young, indicate that more Web sites are taking greater steps to safeguard consumer privacy and to offer opting out capabilities — especially in comparison to a 2000 study conducted by the Federal Trade Commission.

For instance, among the most popular 100 sites, the number that collected personal information fell from 96 percent in 2000 to 84 percent in 2002, while the proportion using third-party cookies to track surfing behavior fell to 48 percent from 78 percent.

The nonpartisan Washington, D.C-based group, which studies the impact of the Internet and its implications for public policy, also found that a greater number of the 100 most-visited sites offered choice regarding whether information can be shared with third parties. That figure grew from 77 percent of the group in 2000, to 93 percent in the new findings.

The percentage of top sites offering consumers a way to opt-out of marketing messages also grew, to 32 percent. Only 15 percent of the top 100 sites profiled in the 2000 study offered consumers a way to opt out of mailings.

While relatively new, adoption of the WC3’s Platform for Privacy Preferences (P3P) looks to be expanding rapidly, although more established seal programs are seeing only tepid growth. About 25 percent of the top 100 sites have P3P-compliant privacy policies, while less than half of the top sites display privacy seals — about the same figure as the FTC found in 2000.

“The changes we have identified are evolutionary, not revolutionary,” said PFF President Jeffrey Eisenach, who co-authored the report. “But from a consumer perspective, they are all in the right direction.”

The news means that online marketers and advertisers are paying greater attention to advocates’ clamor on privacy issues, and consumers’ increasing concern about such matters. A number of recent studies cite Internet users’ concerns about privacy and information security as reasons for their reluctance to shop online.

In some ways, marketers’ apparent attention to privacy issues also comes as a result of independent decisions made by Internet technology players — for instance, Microsoft’s newest Internet Explorer includes P3P technology, meaning that it can block non-compliant sites from tracking consumers. That development in particular prompted groups like the Direct Marketing Association to issue an alert to members to bring their sites up to compliance, which in some cases entails reconfiguring their relationships with profiling third-party ad servers.

For advocates of industry self-regulation, the news is a win, though consumer advocates are likely to charge that the findings show more changes must still be made.

FTC spokespeople were unavailable for comment by press time, although FTC Chairman Timothy Muris attended the press conference announcing the findings on Wednesday, at the National Press Club in Washington, D.C. Earlier this week, the PFF said it had presented the FTC with the findings.

The 2000 FTC survey, conducted under former chair Robert Pitofsky, became the basis for the agency’s recommendations that year that Congress consider legislation on online consumer privacy.