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elopment of the e-commerce industry. The Clinton administration has long been a strong advocate of a laissez-faire approach, despite a stringent new European Union privacy directive that threatens to disrupt electronic commerce between the United States and Europe. Clinton did, however, state in a commencement speech at Eastern Michigan University last May, “We can’t let breakthroughs in technology break down the walls of privacy. We must be able to enjoy the benefits of technology without sacrificing our privacy.” Many online marketers endorse self-regulation, citing that federal intervention could ruin e-commerce entirely. Yet close examination of the existing ’self-regulation’ reveals that consumer groups and the government are wary of most online privacy statements, mainly because they are contradictory, hard to find, and subject to change, which weakens mechanisms of enforcement or redress by the law. If protecting consumers is to be a priority among online merchants, significant, industry-wide change must take place in their privacy policies.
The e-commerce industry maintains that the difference between a normal company and an online one is the personalization that comes from knowing more about a user’s needs and wants. The larger e-commerce corporations have indeed responded to customer and government concerns. Groups such as Customer Profile Exchange (CPEX) have created a coalition of Internet companies that promise to protect the information that consumers share and companies exchange. Corporations such as Microsoft, AOL, AT&T, Dell Computer, and Time Warner have proposed model international rules designed to make Internet shopping more secure.
Last year, the Better Business Bureau launched its new program for certifying and monitoring the collection of personal data online. The program gives qualified companies an electronic seal for their Website, which verifies that they adhere to their stated practices about what information they collect from consumers and how it is used. The first company to display the BBB seal was Dell Computer. Another industry attempt to heighten security was the development of software products that help consumers evaluate the privacy policies of individual websites. For example, YOUpowered ™ aids consumers in evaluating privacy policies while giving each individual the option of sharing the information or not.
These industry developments could prevent a company called DoubleClick from acquiring Abacus Direct, one of the country’s largest catalog database services, in November of 1999. This acquisition would, for the first time, allow an Internet advertiser to match actual names with other personal information that is ‘anonymously’ collected online. The stock market was quick to praise this financial move, for such information is extremely valuable to companies that want to pitch their products to an individual within a short amount of time. After the FTC began to investigate the company’s practices, its stock price fell as investors speculated that the government would become increasingly intrusive on business privacy issues.
On May 22, 2000, three of the five FTC commissioners favored new laws to protect consumers’ privacy online. While the FTC recognizes that most large businesses have begun catering to the privacy issue, many problems remain
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