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Electronic Commerce and Data Privacy 229
existing theories.
In general, the findings of the study were consistent with theoretical expectations,
as most of the hypotheses were supported. The most surprising finding was
that higher levels of privacy concern (H1) did not have a significant impact on actual
e-commerce activity. This finding coupled with the perceived usefulness (H2) could
possibly indicate that consumers will continue using the Internet if they feel the
benefits and convenience of the Internet outweigh any privacy problems. In
addition, consumers who have privacy invasion experiences are more concerned
about privacy (H7a) issues but do not necessarily decrease actual e-commerce
usage (H7b). Again, this can help explain the continued rise in e-commerce use in
the face of parallel increased privacy concerns.
It is clear that individuals are concerned about the privacy of their personal
information. Numerous surveys over the years have indicated a high percentage of
respondents are very concerned about this issue (GVU, 1998; Harris et al., 1991,
1994, 1996; Louis et al., 1999). High levels of concern over the privacy issue have
led many to express a desire for regulatory control. Our findings concerning the
relationship between privacy concerns and regulatory preferences (H6) are consistent
with those found by other studies (GVU, 1998; Milberg et al., 2000). The
findings showed that consumers prefer government regulation to industry selfregulation
with regards to the protection of their personally identifiable information.
Individuals who have higher levels of privacy concerns feel that privacy policies
are important (H4). However, the negative relationship (marginal) between actual
e-commerce activity and the importance of privacy policies indicates that consumers
who use the Internet more place less importance on those policies. This finding
suggests that high-level Internet users feel that privacy policies are either inadequate
or ineffective.
Limitations
Although previous research provides support that students are acceptable
surrogates for decision makers (Hughes & Gibson, 1991; Remus, 1986), other
researchers criticize the use. The use of students in this study was justified due to
the subject nature and the fact that they are consumers. Since students are usually
comfortable Internet users they should be suitable subjects.
Implications and Directions for Future Research
The findings of this study have regulatory, organizational, and research
implications. Now, more than ever, it appears that consumers are ready for
government intervention in order to protect their personal information. This affects
organizations because their efforts at self-regulation did not work well enough
according to the FTC (2000). While great strides were made towards protecting the
personal information of consumers, self-imposed privacy policies did not get the job
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