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216 Henderson, Snyder and Byrd<br />
part, by the increasing impact of information technologies (IT) such as the Inter<strong>net</strong><br />
on daily life and by recent media attention (Smith, 1993).<br />
The European Union’s (EU) Data Protection Directive also has contributed to<br />
the concern over the protection of an individual’s data privacy. The directive was<br />
enacted to protect European citizens from privacy invasions. One of the major<br />
provisions of the directive prevents the transfer of personal data to countries whose<br />
privacy laws or policies do not measure up to those of the EU.<br />
The United States is especially concerned about the implications the directive<br />
will have on trade with Europe (Santosus, 1998). The 2-year negotiations between<br />
the US Department of Commerce and the European Commission’s (EC) Internal<br />
Market Directorate resulted in the EC finally accepting the US “safe harbor”<br />
principles, which are supposed to meet the test of the European directive in protecting<br />
personal data (LaRussa, 2000; Mogg, 2000).<br />
Even with the satisfactory outcome of the EU and US negotiations, consumers and<br />
the Federal Trade Commission (FTC) have pushed and will continue to focus on the issue<br />
of data protection in the US as rumors surface that the FTC is ready to recommend new<br />
regulations to protect online privacy (Schwartz, 2000). This is a complete turnaround<br />
from their prior position that self-regulation is the method of choice.<br />
Online Privacy<br />
There have been several recent studies that addressed the issue of online<br />
privacy. The FTC conducted three studies between 1998 and 2000. These studies<br />
found that most Web sites collected personal information from consumers and most<br />
had not implemented the fair information practice principles originally outlined by<br />
the 1998 study (FTC, 1998, 1999, 2000). Culnan (1999a, 1999b) conducted two<br />
studies that revealed that once again most Web sites collected personal information<br />
while only a limited percentage implemented all of the fair information practice<br />
principles.<br />
What these studies do not show, however, is how consumers view efforts to<br />
protect their personal data on their behalf. This study examines the variables that<br />
affect consumer views of privacy, the importance of privacy policies, and whether<br />
governmental or self-regulation is more desirable.<br />
RESEARCH MODEL AND HYPOTHESES<br />
The research model proposed for this study is shown in Figure 1. The model<br />
considers the interrelationships among several factors based on the literature. The<br />
following sections describe each component of the proposed model and develop<br />
associated hypotheses.<br />
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