Many businesses think protecting their customers' privacy rights will cost them money. The American Civil Liberties Union contends the opposite is true -- that privacy and free speech safeguards are a good investment.
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For most online businesses, privacy policies are an afterthought at best. The typical goal is to glean as much information from users as possible, and to monetize that information as aggressively as possible. But is that really the best business move?
Nicole Ozer, Technology and Civil Liberties Policy Director for the ACLU of Northern California makes the case that such an approach is risky, shortsighted, and bad for a business' bottom line. Ozer has put together a comprehensive primer designed to convince online businesses that supporting online privacy rights -- and free speech -- is good business practice, and to show them how to do it.
And the issue isn't just for online businesses. Any company that collects customer data in any form or has an online presence, needs to think through these questions.
Doing Well By Doing Good
"Protecting privacy is not just good," Ozer claims, "it's good for the bottom line." Studies already show that consumers will pay more for privacy protection, Ozer says. Way back in 2000, one study found that consumers would spend $6 billion more every year in online purchases if they were more confident that their privacy was not at risk with every transaction. In a 2007 study, consumers said they would pay up 60 cents more for a $15 item if the transaction would not invade their privacy. And in 2006, 59% of consumers said they would recommend businesses that follow their own privacy policies. Ironically, being clear about protecting privacy can actually help companies collect important information. Also in 2006, 89% of consumers were more willing to reveal their personal information to companies that have clear privacy policies.
Protecting consumer privacy can also yield PR benefits, as noted in the primer:
Press attention may not translate to big benefits for smaller companies unlikely to gain national notice, but privacy protections are still worth talking about. And as consumers become more educated about the potential risks, Ozer predicts companies will begin to compete on privacy.
That's already happening for mobile startup Loopt.com, says chief operating officer Brian Knapp (who was formerly chief privacy officer at the company). "For us, it has been a real business advantage, I think, to focus on privacy," Knapp says. "Primarily from the user perspective, but also we work with huge [wireless] carriers... and our privacy policies ultimately helped us win those partnerships."
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