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Electronic Commerce and Data Privacy 219<br />
H5: The higher the level of actual e-commerce activity, the more important a<br />
consumer will view an organization’s privacy policy.<br />
REGULATORY PREFERENCE<br />
How well corporations manage privacy often drives the desire for government<br />
regulation (Milberg et al., 2000). Several studies suggested that consumers’<br />
perceptions of how their personal data is handled by organizations impact their<br />
propensity to complain about privacy concerns and to demand governmental<br />
involvement (Harris et al., 1991, 1994, 1996; Stone & Stone, 1990). Milberg et al.<br />
(2000) found a positive direct relationship between privacy concerns and regulatory<br />
preferences (REGPREF). Thus, the following hypothesis was proposed:<br />
H6: There is a positive direct relationship between consumer privacy concerns and<br />
regulatory preferences.<br />
ANTECEDENTS<br />
Because life experiences tend to shape attitudes toward privacy, two<br />
antecedents were also included in the research model: (1) prior privacy invasion<br />
experience (PIE) (Culnan, 1993; Harris et al., 1991; Smith et al., 1996; Stone &<br />
Stone, 1990) and (2) technology knowledge (TK). Culnan (1993) did not find<br />
prior privacy experiences to be significant. However, Smith et al. (1996) found<br />
that persons having been the victim of personal information misuse should have<br />
stronger concerns regarding information privacy. Thus, we proposed the following<br />
hypotheses:<br />
H7a:Privacy concerns are higher if an individual has experienced a prior privacy<br />
invasion.<br />
H7b:An individual’s actual e-commerce activity decreases if the individual has<br />
experienced a prior privacy invasion.<br />
Prior research has established a positive relationship between experience with<br />
computing technology and a variety of outcomes such as affect towards computers<br />
and computing skill (Harrison & Rainer, 1992; Levin & Gordon, 1989). Agarwal<br />
and Prasad (1999) did not find that prior experience with similar technologies had<br />
a significant impact on attitude or behavior intentions. The Agarwal and Prasad<br />
(1999) study also did not test technology experience on actual system use. The IBM<br />
study found that groups that use computers and access the Inter<strong>net</strong> to the greatest<br />
extent have relatively greater levels of confidence in companies that do business on<br />
the Inter<strong>net</strong> (Louis et al., 1999). We propose that there is a significant effect of<br />
technology knowledge on the actual e-commerce activity. Thus, the following was<br />
hypothesized:<br />
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