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Electronic Commerce and Data Privacy 215<br />
interchange (EDI). More often, though, e-commerce is simply thought of as the<br />
buying and selling of goods and services through the Inter<strong>net</strong>, particularly the World<br />
Wide Web (WWW). The two most common forms of e-commerce are labeled<br />
business-to-consumer (B2C) and business-to-business (B2B) e-commerce.<br />
B2C e-commerce may be thought of as the basic type of e-commerce because<br />
it was first exploited by retail “e-businesses” such as Amazon.com, eTrade, and<br />
eBay that were created as Inter<strong>net</strong>-only versions of traditional <strong>books</strong>tores, brokerage<br />
firms, and auction houses. These e-businesses could deliver almost unlimited<br />
content on request and could react and make changes in close to real time because<br />
of the <strong>free</strong>dom from the geographic confines and costs of running actual stores<br />
(Buckley, 1999). These factors soon caused traditional “brick and mortar” stores to<br />
launch their own online stores (e.g., Barnes and Noble, Merrill Lynch, Southebys).<br />
B2B e-commerce has many of the same advantages that hold for B2C ecommerce<br />
organizations such as the ability to increase the services they can offer<br />
their business customers. Inter<strong>net</strong> technology has helped create new relationships<br />
and to streamline and augment supply-chain processes. The roles of logistic and<br />
financial intermediaries (e.g., FedEx, UPS, American Express) are expanding as<br />
these changes are occurring (Buckley, 1999).<br />
E-commerce is not without risks or barriers. Market conditions constantly<br />
change as new competitors can easily enter the market with new business models.<br />
Customer loyalty is fleeting, as competitors are only a mouse click away. Competitive<br />
advantage is short-lived, as traditional barriers are rendered irrelevant by<br />
technological advances (Oracle, 1999). One risk that has received a lot of attention<br />
recently concerns the privacy and security of personally identifiable information<br />
(PII) transmitted over the Inter<strong>net</strong> and stored by the organization collecting the data<br />
(Hoffman, Novak, & Chatterjee, 1993).<br />
PRIVACY<br />
According to Westin (1967), privacy is “the claim of individuals, groups or<br />
institutions to determine for themselves when, how, and to what extent information<br />
about them is communicated to others.” Information privacy can be thought of as<br />
“the ability of the individual to personally control information about one’s self”<br />
(Stone, Gardner, Gueutal, & McClure, 1983). Personal information privacy has<br />
become one of the most important ethical issues of the information age (Culnan,<br />
1993; Mason, 1986; Smith, 1994).<br />
Data privacy is a major issue facing nearly every business in every country in<br />
the world. Over the past several years, many surveys have found consistently high<br />
levels of concern about privacy (Cranor, Reagle, & Ackerman, 1999; Culnan, 1993;<br />
GVU, 1998; Harris Louis and Associates & Westin, 1991, 1994, 1996; Louis Harris<br />
& Associates, Inc., 1999; Milberg, Burke, Smith, & Kallman, 1995; Smith, Milberg,<br />
& Burke, 1996). This attention to the data privacy issue has been brought about, in<br />
Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written<br />
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