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November 26, 1999

Protecting consumer information gleaned from 'e-commerce' is smart business. The best e-businesses are already doing it.

By Ed Reinfurt

Any business owner will tell you that the key to prosperity is winning customers' confidence and trust.

In America, this has been a truism of commerce in turn-of-the-century general stores, in Manhattan's first department stores, in post-war supermarkets, and in malls that have thrived in the last quarter century.

And it's no less true in cyberspace. No matter what they buy, or where or how, consumers rightly insist that the businesses they deal with operate with integrity.

And integrity today involves more than just ensuring confidentiality and security in financial transactions. It means that businesses should tell consumers how information provided by consumers for Internet transactions is to be used.

As e-commerce has grown, how to protect consumers' privacy has gotten attention from officials at many levels of government. But this is not just a government concern, it's a matter of good business.

By and large, e-businesses have been using consumer information gleaned from e-commerce wisely.

Take, for example, the consumer who uses the Internet to buy low-cost air fare to Barbados.

If the company that sells the ticket follows up with information about hotels, car rentals or restaurants, that's just good customer service. It's just like the general-store clerk who, having sold seed, routinely inquired about fertilizer.

Some consumers have expressed concern about the possible sale of data from Internet commerce to other unrelated parties.

Many consumers do not have a problem with this practice. Others do. That is why disclosure is important.

The key is to develop a privacy policy that spells out how the business will and won't use information gleaned from its Internet-based business. The largest and most popular such web sites already have clear and thorough privacy policies prominently posted.

What's more, the most active and successful e-businesses encourage other businesses and industries to do the same thing.

At www.etrust.com, for example, there is helpful information for both businesses and consumers.

Businesses can learn about generating trust in potential Internet-based customers and about creating a privacy statement. Consumers can learn how they can protect on-line privacy and can read results of investigations into consumer complaints.Help is also available from the Online Privacy Alliance (www.privacyalliance.org), an initiative formed by a group of corporations and associations to promote actions that create an environment of trust and foster the protection of individuals' privacy on line.Earning consumers' trust was, and is, vital to business success. E-businesses should preserve this fundamental business principle. Ed Reinfurt is vice president of The Business Council. This is based on comments made at a Nov. 8 conference sponsored by the Rockland Economic Development Corporation.