Mind your own business

One of the fundamental promises of e-commerce is that it will allow customers to be better served than with conventional...

One of the fundamental promises of e-commerce is that it will allow customers to be better served than with conventional retailing.

According to the e-pundits, personalised recommendations for additional purchases of the kind found on Amazon.co.uk are just the beginning of a new era of infinitely attentive one-to-one shopping that the Internet makes possible.

But in the enthusiastic proclamation and implementation of this orthodoxy, e-commerce companies often overlook the price users must pay for such customisation.

Online stores must know their customers if they are to serve them, and obviously the more they know, the more exact their response can be. So a side-effect of the extraordinary spread of e-commerce has been an unprecedented accumulation of knowledge about people's buying habits - and hence themselves.

Evidence of a growing awareness of the potentially dangerous consequences of this can be found on a number of fronts.

For example, both Microsoft and Netscape will be adding to the next iteration of their Web browser software the ability to control very finely the deployment of cookies - small text files stored on a user's hard drive by e-commerce sites.

These are by far the most prevalent way of tracking customers as they move around a site and make purchases. Hitherto, it has been something of an all-or-nothing technology - either cookies were routinely accepted or simply rejected.

E-commerce companies have obviously gained from people's reluctance to lose the undoubted benefits of cookies by turning them off completely to the extent that many users are unaware that important information about their online habits is being passed back to e-commerce servers. This will change with the new browsers.

It may also change for quite other reasons. A recent tussle between the European Union and the United States over privacy protection for online shoppers highlighted important cultural divisions between the two.

Where the US favours self-regulation by the computer industry, the EU favours explicit legislation. The current compromise is unlikely to endure, particular as EU consumer groups start to focus on online privacy as a key issue.

As a result, the rather easy-going approach to privacy on the part of visitors to Web sites will probably soon be replaced by one that demands increasingly strict guarantees and safeguards.

Companies would therefore do well to start reviewing their own use of cookies and related technologies against the day when they will have no choice about the matter.

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