December 17, 1999 4:00 PM PST

Top Web sites compromise consumer privacy

Online holiday shopping is expected to deliver record sales for e-tailers this year, but a new study finds it may put consumers' privacy at risk.

"[Online] consumers are more at risk today than they were in 1997," Marc Rotenberg, executive director of the Electronic Privacy Information Center (EPIC), said in a report issued today. Rotenberg cited extensive customer profiling and intrusive marketing techniques, such as the use of "cookies," among the factors causing higher risk. Cookies track user browsing and shopping habits online.

"Anonymity, which remains crucial to privacy on the Internet, is being squeezed out by the rise of electronic commerce," he said.

Only a handful of the 100 most popular online stores give shoppers adequate privacy, according to the Washington-based privacy research group. The group's research focused on whether sites use profile-based advertising and whether they use cookies in their site operations, both controversial practices on the Internet.

The report also focused on retailers' compliance with "Fair Information Practices''--guidelines that provide basic privacy protection for consumers--which none of the companies in the survey addressed properly, according to EPIC.

Rotenberg said that "legally enforceable standards of privacy are necessary to ensure compliance with Fair Information Practices, and new techniques for anonymity are necessary to protect online privacy."

The survey found that 18 of the leading shopping sites did not post a privacy policy, 35 of the sites have profile-based advertisers operating on their pages, and 87 of the e-commerce sites use cookies. EPIC also reported that many privacy policies are "confusing, incomplete and inconsistent."

"The stated policies of most big shopping sites run the gamut from bad to atrocious," said Jason Catlett, president of Junkbusters, a privacy advocacy firm. "People should have the right to buy without being tracked and without having their personal information sold."


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