Consumer privacy is at the center of an ongoing debate among business leaders, privacy activists, and government officials. Although corporations face competitive pressures to collect and use personal information about their customers, many consumers find some methods of collection and use of their personal information unfair. We present a justice theory framework that illustrates how consumer privacy concerns are shaped by the perceived fairness of corporate information practices. We describe a set of global principles, fair information practices, which were developed to balance consumer privacy concerns with an organization's need to use personal information.
The issue of consumer privacy is at the center of an ongoing public debate in which three different perspectives on consumer privacy have emerged: The corporate perspective, The activist perspective, and The centrist perspective. The corporate perspective argues that corporations are the primary creator and provider of economic growth and development for society (Scott & Hart, 1979). The proponents of this perspective argue that any restrictions placed on the corporation's ability to access personal information about consumers only compromises the corporation's ability to operate efficiently in the marketplace, and thus impedes its ability to fulfill its social responsibility (Lester, 2001). By contrast, the activist perspective argues that if free-market forces and advances in technology are left unchecked, then information will be available to anyone for any purposes, which will violate the right to privacy as well as imposing harmful social costs on society (Garfinkel & Russell, 2000).
But what is really at the core of the debate among these three perspectives is the issue of who controls personal information about the consumer (Garfinkel and Russell, 2000; Larson, 1994; Rosen, 2000; Rothfeder, 1992). In a world where organizations can no longer know their customers personally, advances in technology combined with a need to serve customers as individuals have fueled the collection of personal information.
It is possible for firms to efficiently gather, store, use, and exchange vast amounts of consumer information that are needed in a business environment characterized by largely anonymous, impersonal relationships (Garfinkel and Russell, 2000; Larson 1994; Rothfeder, 1992). Instantaneous access to a consumer's credit report containing his or her bill-paying history means credit can be extended on the spot. Online access to a customer's purchase history by a customer service representative enables standardized, impersonal encounters with anyone who answers the 800-number to assume the appearance of a personal relationship (Gutek, 1995). Firms use data mining to perform sophisticated analyses on massive databases of transaction data that provide the basis for designing marketing programs for individual customers (Garfinkel and Russell, 2000; Winer, 2001). |
