Privacy issues X E-commerce

Many believe the Internet is private. Since the Internet may be used in the privacy of homes or offices, there is a misconception that transactions are private. But this may not be the case. There is bound to be some form of record created.

Disintermediation is the driving force behind e-commerce. It assumes there is nothing between the seller and a customer, except a direct and personal connection from one computer to another, from one browser to another. Is there really a direct and personal connection? What are the implications for security and privacy?

Mr. Gerstner at CeBIT '98 reflected on the current state of electronic business, by examining the increasing computing power of systems ("Deep Computing") and the sophisticated algorithms that permit powerful levels of data mining. He spoke about the rise of global networks that create in turn a networked economy:

"The next milestone is what we call "pervasive computing." Fifty years ago, where did you find electric motors? In factories and power plants. They were big and expensive. Today, you might find 100 electric motors in the typical home. They're in appliances, the heating and ventilation system, the CD player, the VCR, and if you're fortunate enough, the electric toothbrush. We don't buy electric motors. They come inside all the things we use every day.

The same thing is happening with computing devices. Chips are getting so small and inexpensive, they're being embedded in everything: cars, appliances, tools, doorknobs, clothes. Most significantly, all these tiny intelligent devices will be interwoven in the global fabric of computing and communication.

And soon we'll see this hyper-extended networked world - made up of a trillion interconnected intelligent devices - intersecting with the data mining capability I spoke of earlier. "Pervasive computing" meets "Deep Computing." Companies and institutions will amass more data, more information than ever in history - and for the first time be able to do something productive with it - turn raw data into knowledge and move that knowledge to the right people instantaneously. Personally, I believe that future leadership institutions of all kinds will be those that know how to compete and win on the basis of knowledge - learning, adapting and improving using this vital asset we know as information.

While the benefits to be gained are immense, the potential pitfalls are just as large. The security of e-commerce decreases as its functionality requires the use of distributed applications that execute many transactions against multiple databases. On the surface it may seem rather easy for transactions to be made, straightforward and simple, but what lies deep down is the complexity of records, chips, and databases that happened in the Internet. Afterall, it is not as simple as it seems. 

Given the potential for abuse, it is highly likely laws and regulations will begin controlling privacy and security mechanisms. However, it may be a good thing that there is some form of government intervention, and there is some sort of evidence to show this. In a recent Business Week/Harris poll, most of the participants cited privacy issues as the number one reason they are not using the Internet. In the same poll, 78% of extremely active Internet users said they would use the World Wide Web more if there was a guarantee of their privacy. Another 50% of those polled were of the opinion that the U.S. government should pass laws as soon as [possible to manage the issues of digital collection of personal data.