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168 Part One Organizations, Management, and the Networked Enterprise

displays targeted ads on YouTube and on Google mobile applications, and its
DoubleClick ad network serves up targeted banner ads.
The United States has allowed businesses to gather transaction information
generated in the marketplace and then use that information for other market-
ing purposes without obtaining the informed consent of the individual whose
information is being used. An opt-out model of informed consent permits the
collection of personal information until the consumer specifically requests
that the data not be collected. Privacy advocates would like to see wider use of
an opt-in model of informed consent in which a business is prohibited from
collecting any personal information unless the consumer specifically takes
action to approve information collection and use. Here, the default option is no
collection of user information.
The online industry has preferred self-regulation to privacy legislation for
protecting consumers. The online advertising industry formed the Online
Privacy Alliance to encourage self-regulation to develop a set of privacy guide-
lines for its members. The group promotes the use of online seals, such as
that of TRUSTe, certifying Web sites adhering to certain privacy principles.
Members of the advertising network industry, including Google’s DoubleClick,
have created an additional industry association called the Network Advertising
Initiative (NAI) to develop its own privacy policies to help consumers opt out
of advertising network programs and provide consumers redress from abuses.
Individual firms like Microsoft, Mozilla Foundation, Yahoo, and Google have
recently adopted policies on their own in an effort to address public concern
about tracking people online. Microsoft has promised to ship its new Internet
Explorer 10 Web browser with the opt-out option as the default in 2012. AOL
established an opt-out policy that allows users of its site to not be tracked. Yahoo
follows NAI guidelines and also allows opt-out for tracking and Web beacons
(Web bugs). Google has reduced retention time for tracking data.
In general, most Internet businesses do little to protect the privacy of
their customers, and consumers do not do as much as they should to protect
themselves. For commercial Web sites that depend on advertising to support
themselves, most revenue derives from selling customer information. Of the
companies that do post privacy polices on their Web sites, about half do not
monitor their sites to ensure they adhere to these policies. The vast majority
of online customers claim they are concerned about online privacy, but less
than half read the privacy statements on Web sites. In general, Web site privacy
policies require a law degree to understand and are ambiguous about key terms
(Laudon and Traver, 2013).
In one of the more insightful studies of consumer attitudes towards Internet
privacy, a group of Berkeley students conducted surveys of online users, and
of complaints filed with the FTC involving privacy issues. Here are some of
their results: people feel they have no control over the information collected
about them, and they don’t know who to complain to. Web sites collect all
this information, but do not let users have access, the Web site policies are
unclear, and they share data with “affiliates” but never identify who the affili-
ates are and how many there are. Web bug trackers are ubiquitous and users
are not informed of trackers on the pages users visit. The results of this study
and others suggest that consumers are not saying “Take my privacy, I don’t
care, send me the service for free.” They are saying “We want access to the
information, we want some controls on what can be collected, what is done
with the information, the ability to opt out of the entire tracking enterprise,
and some clarity on what the policies really are, and we don’t want those

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