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Adverse Effects of E-Commerce 45
percent reported the incident to law enforcement. The 1997 Computer Security
Institute/Federal Bureau of Investigation survey on computer crime and security
revealed that 75 percent of respondents had reported financial losses due to various
computer security breaches. These breaches ranged from financial fraud, theft of
proprietary information, sabotage and computer viruses on the high end to Internet
abuse and laptop theft on the low end (Rapalus, 1997; Morgan, 2001). Reports
indicate that hackers have penetrated the security systems of many companies
including America Online, the world’s biggest online service provider. Forrester
Research estimates that $12.2 billion in e-commerce revenue was lost to privacy
concerns in 2000 after $2.8 billion was lost in 1999 (Rombel, 2001).
Several bankrupt online retailers in Europe and other companies were
reportedly selling customer lists for much needed cash despite earlier promises in
privacy statements never to do so (Rombel, 2001). Many network vulnerability
scanners and intrusion detection systems have been developed and implemented
but systems still seem to be vulnerable.
Loss of Privacy
Privacy is defined as an individual’s right to be left alone, free from interference
or surveillance from other parties. On one hand, the Internet has provided
opportunity for conducting business online in the form of e-commerce, but on the
other hand, organizations may be secretly profiling and collecting information about
customers. Spamming, which is the practice of sending out unsolicited e-mail, is
growing because it costs so little to send out millions of messages or advertisements
electronically. Many prominent high-technology companies have already been
caught attempting to quietly collect information about their customers via the
Internet (Gupta & Sharma, 2002).
Privacy has become a key issue in the digital age. Technological advances
make it easy for companies to obtain personal information and to monitor online
activities, thus creating a major potential for abuse. There are three areas of concern
in the privacy debate: employers monitoring employee computers and Internet use
in the workplace, advertising and market research companies collecting and selling
personally identifiable information based on consumers’ online activities, and
information brokers selling readily available personal information from publicrecord
databases online (Blotzer, 2000).
Most companies collect information about the visitors who visit a company’s
site. Files such as “cookies” are planted on a computer by the web sites that are
surfed so that they track down the surfing details of users. Most users are blissfully
unaware of the electronic footprint they leave when they surf web sites. Cookies are
short pieces of data used by web servers to help identify web users. Cookies are
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