Privacy, Technology, and the Consumer

Privacy

Research on privacy concerns has focused on a variety of issues using multiple methods of inquiry. The more popular methods of inquiry used in this field include surveys and analysis of policy documents. Some of the issues that have been addressed include identification of the dimensions of consumer concerns regarding privacy (e.g., Smith, Milberg and Burke, 1996), identification of ways in which consumers respond to requests for information (e.g., Phelps, Nowak and Ferrell, 2000), and effects of Internet seals of approval, trust in the organization, and compensation for information on the consumer's privacy concern and willingness to provide information (e.g., Grabner-Kraeuter, 2002; Miyazaki and Krishnamurthy, 2002; Sheehan and Hoy, 2000).

The dimensions of individuals' concerns about organizational information privacy practices include concern regarding the unauthorized collection and use of, errors in, and improper access to personal information (Smith, Milberg, and Burke, 1996). Associated with these dimensions is the extent of control that consumers feel they have over their personal information, namely, control over who has access to personal data, how personal data are used, and the volume of unsolicited advertising and marketing offers arising from the use of personal data (Phelps, Nowak and Ferrell, 2000).

Consumers have responded in numerous ways to perceived assaults on their privacy. Some behavioral responses include falsification of information, requests to remove names from e-mail lists, curtailing use of e-mail and switching to the phone, relying only on reputable Web sites and some use of filtering software (Milne and Boza, 1999; NY Times , 2003; Sheehan and Hoy, 2000). However, there is relatively little research on the cognitive and affective outcomes of dealing with privacy invasion on an ongoing basis.

Prior research has also addressed the impact of Web site ratings by independent parties on consumer privacy concerns and their online activities (Miyazaki and Krishnamurthy, 2002). Providers of such ratings include TRUSTe, BBBOnline, and Verisign. This stream of research suggests, through a series of experiments, that the presence of seals of approval can make consumers feel more favorable towards a Web site's privacy policy. Additionally, for high-risk consumers, these seals can increase the level of information disclosure and participation. However, it is not clear if consumers understand what these independent ratings mean, and if they actually look for these seals in a real buying situation.

In sum, the literature tells us that consumers are indeed concerned about their online privacy. While they are not willing to give up online activities altogether, concerns about the security of personal information cause some consumers to curtail such activities. In this chapter, we explore whether there are variations in the levels of consumer concerns about privacy between specific demographic groups. In the literature so far, some efforts have been made to distinguish between the concerns of high- and low-risk consumers. However, we feel that the study described in this chapter extends our understanding by exploring the differences in the concerns of privacy between various age and gender segments.

We feel that it is worth examining differences in privacy concerns across age and gender groups. This is because there is evidence in the literature that age and sex differences have an influence on consumers' attitudes toward (and acceptance of) technological products and services, such as the Internet. Accordingly, the following section reviews the literature on the relationship between technology and consumers.

Technology and Consumers

User acceptance of technology has been widely studied from the perspective of computer usage in the workplace. Notably, studies in these areas have identified perceived usefulness and perceived ease of use as important criteria in the acceptance of technology (Davis, 1989; Davis et al., 1989). Perceived usefulness is defined as the extent to which a person believes that using a particular technology will enhance performance, and perceived ease of use is the degree to which a person believes that using a technology will be free from effort (Davis, 1989). Subsequent work in this area concludes that men's technology usage decisions are more strongly influenced by their perceptions of usefulness. In contrast, women are likely to be influenced by perceptions of ease of use and peer influences (Venkatesh and Morris, 2000). Similarly, the age of workers also has an impact on technology adoption decisions in the workplace. Specifically, younger workers were strongly influenced by their attitude towards using the technology, while older workers were more influenced by subjective norms (Morris and Venkatesh, 2000). These findings are based upon studies of computer usage in the workplace. It is not clear if these gender differences in perceptions of technology will translate to off-work usage of computers and the Internet.

Framework Linking Technological Competence with Privacy Concerns

As noted earlier, Mick and Fournier (1998) found that consumers have developed several strategies for coping with these technological paradoxes, which can be broadly classified into avoidance strategies and confrontative strategies. Confrontative strategies include acceptance of technological products, and efforts to master them, at least to the extent that mastery is needed in order to be productive. In the current context, a consumer's need to use Internet technologies is accompanied by the threat of compromising one's privacy. Given the technological nature of the Internet, the question that needs to be explored is whether the coping strategies adopted by consumers are related to their self- perceived technological competence.

Figure 10-1 represents our effort to frame these issues graphically. This framework is being introduced prior to the detailed presentation of focus group findings, because it serves as a convenient basis for organizing the subsequent discussion.

Figure 10-1: Impact of self perceived technological competence on online privacy concerns

Figure 10-1 suggests that an individual's level of comfort when interacting with the Internet is guided by his or her self-perceived technological competence, which in turn is determined by familiarity and experience with the Internet. It has been suggested in the literature that greater familiarity (and therefore comfort) with the Internet can result in a reduction of consumer concerns with privacy (Miyazaki and Fernandez, 2000). In addition to personal experiences, consumers' concerns about privacy are likely to be affected by other sources, such as media reports and interactions with interpersonal influencers .

The model in Figure 10-1 suggests that consumers with higher levels of self-perceived technological competence are likely to have lower levels of concern about privacy. In contrast, individuals with lower levels of self-perceived technological competence tend to have greater levels of concern about their privacy. It is important to note that technologically competent individuals are not necessarily complacent about privacy issues, in that they do not consider themselves invulnerable to privacy threats. Rather, they are more willing to adopt confrontative measures to protect their privacy ( ranging from blocking cookies to the installation of firewalls and being more careful with their personal information), At the same time, they are aware of the limits to these technological solutions, and consequently perhaps more cognizant of which of their online activities might expose them to privacy risks. These individuals recognize the existence of privacy risks, but believe that the primary responsibility for privacy protection lies primarily with consumers themselves, and with self-regulation mechanisms adopted by industry. In contrast, individuals low in self-perceived technological competence feel that there is need for stronger government measures to protect consumer privacy. A detailed discussion of the framework is presented in the following sections.