Journal of Public Policy and Marketing

Marketers’ use of the new information technologies has provided the opportunity for improved market segmentation and target marketing. However, the profession faces ethical conflicts because application of these technologies commonly invades consumer privacy. The authors examine the ethical dimensions of marketing practice in relation to consumer privacy. The meaning of privacy in a marketing context is explored and specific marketing threats to consumer privacy are described. After examining current and potential mechanisms to safeguard consumer privacy, the authors conclude that marketers must make an active commitment to ethical behavior in this area if restrictive legislation is to be avoided.

This study examines credit card penalty pricing using data from the Survey of Consumer Finances. In particular, the author uses a flag in the data set for the first time to analyze bias in reported credit card interest rate. He also uses this flag to estimate how frequently people mistakenly believe they are not at a penalty interest rate. The results imply that, on average, consumers underestimate their credit card interest rate by 30%–33%. Penalty rates seem to compound this bias. There is also some evidence that consumers who are more optimistic using other measures derived from the survey tend to underestimate their rate by a larger amount.

The authors examine consumer perspectives of data collection awareness and knowledge of name removal mechanisms, such as opt in and opt out, across mail, telephone, and Internet direct channels. The authors investigate consumer privacy states based on the fair information practices of notice (data collection awareness) and choice (knowledge of name removal mechanisms). Data from a national survey suggest that name removal preference varies by channel, consumer privacy state, channel-specific purchase experience, and consumer demographics. Empirical support is also found for alternative approaches (i.e., opt-in methods) for removing personal information from direct marketing lists.

The authors examine potential relationships among categories of personal information, beliefs about direct marketing, situational characteristics, specific privacy concerns, and consumers’ direct marketing shopping habits. Furthermore, the authors offer an assessment of the trade-offs consumers are willing to make when they exchange personal information for shopping benefits. The findings indicate that public policy and self-regulatory efforts to alleviate consumer privacy concerns should provide consumers with more control over the initial gathering and subsequent dissemination of personal information. Such efforts must also consider the type of information sought, because consumer concern and willingness to provide marketers with personal data vary dramatically by information type.

The Federal Trade Commission (FTC) is one of many organizations studying influences on consumer privacy online. The authors investigate these influences, taking into consideration the current body of literature on privacy and the Internet and the FTC's core principles of fair information practice. The authors analyze these influences to assess the underlying factors of privacy concern online. The authors examine the current recommendations and actions of the FTC in light of the results of an e-mail survey of online consumers in the United States that assessed their attitudes toward privacy online. The authors find that the FTC's core principles address many of online consumers’ privacy concerns. However, two factors not directly incorporated in the five principles, the relationships between entities and online users and the exchange of information for appropriate compensation, may influence consumers’ privacy concerns.

Privacy is a high-profile public policy issue that affects consumers and marketers. The emergence of online marketing brings new privacy concerns that have resulted in Federal Trade Commission scrutiny and review. At the same time, industry groups and associations have been active in self-regulation efforts. To highlight areas in which marketing researchers can add value to the public policy discussion on privacy, the author provides a research framework that highlights four aspects of information exchange between marketers and consumers. The author argues that improving exchange mechanisms will provide consumers with more control and the ability to make more informed trade-offs of personal information for benefits. Within this framework, the author provides an overview of the articles in this special issue and suggests avenues for further research.

This paper presents an overview of consumer privacy that integrates the public policy and behavioral literatures. Consumer privacy is defined in terms of control over information disclosure and the environment in which a consumer transaction occurs. These two dimensions generate a 2×2 matrix, identifying four states of privacy based on control over environment, information disclosure, both, or neither. For each state, managerial and policy implications can be derived.

Consumer privacy is a public policy issue that has received substantial attention over the last thirty years. The phenomenal growth of the Internet has spawned several new concerns about protecting the privacy of consumers. The authors examine both historical and conceptual analyses of privacy and discuss domestic and international regulatory and self-regulatory approaches to confronting privacy issues on the Internet. The authors also review ethical theories that apply to consumer privacy and offer specific suggestions for corporate ethical policy and public policy as well as a research agenda.

Most of the privacy debate pertains to personal information being collected and disseminated in databases without consumer consent or perhaps even knowledge. The author asserts that a more important issue is how these databases are used to impose marketing costs on consumers without their consent. All marketers realize it is costly to communicate to potential consumers, but they often forget that consumers bear some marketing communications costs as well. The author suggests that economic efficiency would be enhanced by requiring marketers to internalize at least some of the consumer costs, particularly those likely to be borne involuntarily. Current regulations address only some costs for some media and often limit rather than enhance consumer choice. The author presents new public policy recommendations to improve efficiency and consumer choice.