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October 7, 1998

TRUSTE LOVEFEST: NICE CARROT, WHERE’S THE STICK?

By CBR Staff Writer

Whenever two or three US internet companies gather together, things start getting sentimental. Even so, the TrustE Privacy Partners launch at New York’s Fall Internet World (CI No 3,511) set new industry records for mawkish blather. So intent were the eight portal participants – MSN, AOL, Yahoo, Infoseek/Go, Lycos, Excite, Netscape and Snap – on setting aside their rivalries and joining together for the greater good of the net and the human race in general, we half expected them to join hands and start singing Give e-commerce a chance. What’s most irritating is that the velvety rhetoric about communication and communities and grassroots movements and trusting one another did nothing to conceal the iron fist of commercial interests intent on expanding their markets. Consumers – not one panel participant ever referred to them as people – are to be educated about online privacy only because studies show that if people actually trusted internet companies to protect their personal information, they might be less reluctant to engage in e-commerce. If this suggests to you that internet users are already pretty well educated about the risks of online transactions, just be quiet. Consumer fears are to be allayed, not because the industry is about to adopt and enforce better information handling practices, but because the industry is about to launch a multi-million dollar ad campaign. As Infoseek’s Barak Berkowitz aptly summed up: Consumers should explicitly understand what is going on, and then they should willingly share their information with merchants. Got that? Buy, or go home. Only Netscape’s regulatory guru Peter Harter actually referred to the sword of Damocles hanging over the US internet’s head. On October 24 the European Union data directive will kick in, and whether or not US information handling practices will be deemed adequate under the terms of the directive remains manifestly unclear. The TrustE lovefest is aimed at least as much at bureaucrats in Brussels and the forthcoming OECD meeting in Ottawa as at Joe and Jane Internet-User. Will any of those be fooled? Not likely: the industry’s idea of self-regulation remains as fuzzy on enforcement and recourse as it has ever been (CI No 3,411). There’s an escalation process within TrustE and, as executive director Susan Scott pointed out, the FTC has demonstrated its willingness to prosecute GeoCities for poor practices. More recent reports, however, suggest that the FTC has come to the end of its patience with self-regulation and wants legislation to help it punish wrongdoers (CI No 3,501). Right now, though, mess with peoples’ privacy online and the most you can expect is a stern talking-to, and maybe a sharp slap on the wrist. You wouldn’t know it from Wednesday’s orgy of self-congratulation. Ad Age’s Dana Blankenhorn was the first to puncture the vendor’s collective bubble: Nice carrot, he told the panel. Where’s the stick? Unfortunately for us, there is no stick.

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