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Concerns and Functional Literacy of Consumers on the Laws on Privacy Protection

Paper Type: Free Essay Subject: Commerce
Wordcount: 5982 words Published: 23rd Sep 2019

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Table of Contents


  1. Research Topic and Description ————————————————————  2
  2. Aims and Objectives ————————————————————————–  3
  3. Literature Review ——————————————————————————  4

3a. General Overview of Online Consumer Privacy ————————————–  4

3b. Categorization of Online Consumers Concerns on Privacy ————————-  5

3c. Legalities Surrounding Online Consumer Privacy ————————————  7

3d. Conclusion ———————————————————————————  9

References ————————————————————————————-  10

  1. Critical Analysis of a Peer Reviewed Article ———————————————  11
  2. Sample Bibliography of at least 20 additional sources ———————————-  14   




With the advancement of technology, the ability to be anywhere in the world and access anything has become quite easily possible. Thus, I may be in West Africa and be able to access and buy an item somewhere all the way down in South America and still be able to receive my item in my home in West Africa by just a few clicks on the computer and the provision of some information which would enable my item to be delivered to me by the company or business I am buying from which essentially makes me an online consumer of that company.

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However, this ease has brought about various forms of issues and concerns which affect the privacy of online consumers. As the world continues to become globalized, the technological developments which we use everyday evolve as well and with it comes new fears and concerns. Online consumers have begun to have concerns about how their private and personal information is being used, handled and protected by the companies or businesses they have provided their information to.

This research topic deals not only with these concerns of the online consumers but also the capability of online consumers to fully understand what they sign up for when they agree to divulge their information and the laws put in place for the protection of their data as well as the ways in which these consumers can play a part in the protection of their data.


As individuals and particularly as consumers, we want our private information to be respected and protected and we hope that where our personal information is given out to an organization or business, they protect such information given so that we do not incur any loss whatsoever by divulging our personal information in the course of transacting with such entity.

This research basically aims at looking at online consumer privacy protection first from a general perspective of what it means and entails and then gradually narrows it down to the consumers point of view, what the consumers understand as privacy protection and their concerns, to determine if online consumers know what exactly they may be signing up for when accepting to give their data to businesses either by way of cookies or inputting their data themselves while carrying out online transactions , to determine if consumers are aware of the laws on privacy protection and if they understand these laws and finally, to determine and provide suggestions as to what can be done by consumers to help protect their data.

It is expected that the major outcome of this research would be to provide a better understanding to online consumers of the terms of the agreement they enter into while doing online transactions and inform consumers of the available privacy protection laws and to ultimately proffer solutions which would help consumers in not only understanding the laws on privacy but also give them an insight as to what they can do in the fight in online consumer privacy protection.



As far back as the 1970’s, online consumer privacy has been an issue that has cropped up over and over again in the minds of online consumers all over the world. According to (Louis Harris and Associates & Westin (1981) as cited in O’Neil, 2001, p. 18), public concerns about privacy increased during the 1970s largely as a result of the increasingly technological, computer oriented nature of the U.S. society. Fifty-two percent of the public did not believe that the privacy of personal information maintained in computer systems was adequately safeguarded.

As noted by (Warren and Brandeis (1890) as cited in Fernback and Papacharissi, 2007, p. 716), Western nations value privacy as a basic human right – “the right to be left alone”. Since then, the US and European Courts have expanded privacy rights to include the citizens entitlement to control information about themselves.

Privacy as already stated, can be described as the right to be left alone. However, when it relates to consumer activities, (Wang, Lee and Wang, 1998) state that privacy usually refers to personal information and the invasion of privacy is usually interpreted as the unauthorized collection, disclosure or other use of personal information as a direct result of electronic commerce transactions.

The advent of electronic commercial transactions have brought about a downside for online consumers as their activities on the internet in the long run, leaves behind a trail of information not only pertaining to the purchasing information of these consumers, but also information concerning the interests and activities of these consumers, allowing online marketers the ability to develop the profiles of individual users (Caudill and Murphy, 2000). According to Phelps et al (2000, p. 27), fifteen years ago, direct marketers were among the few businesses to track and analyze individual consumer purchases and characteristics using databases. Today, retailers, manufacturers, service providers and nonprofit organizations routinely collect and use individual specific consumer information.

Marketers now employ various online collection techniques, including e-mail addresses from list servers, chat rooms and news groups. In effect, an advantage of the internet which is its ability to collect real time behavioral data, which are accessed through the use of cookies (Caudill and Murphy, 2000, p. 9) has enabled marketers the capacity to tailor the visits of consumers on their sites to meet their specific interests and likes. Cookies are the most common method of identifying and tracking online consumer activity which involves the placement of small text files on a consumer’s hard drive that are often offered back to the Website during subsequent visits by the consumer. Cookies can be designated to last for a particular period of time or indefinitely on a consumers hard drive (Bayan (2001), Gralla (2007), Linn (2005), Millet, Friedman and Felten (2001) as cited in Miyazaki, 2008, p. 20).

However, this collection of data for the improvement of consumers visits to marketers’ sites has resulted in the consumers worries as to how their data is being stored, used, divulged and protected. Ultimately, serious questions as to the extent to which marketers should be allowed to gather and use personal information about specific consumers continue to exist (Culnan (1995), Nowak and Phelps (1995) as cited in Phelps, Nowak and Ferrell, 2000, p. 27).


With the increasing use of the internet as a marketplace for businesses and consumers, there has continued to be a growth in the concerns of online consumers as it relates to their privacy. These concerns vary with the age of the consumers and also, the magnitude of concern vary from one consumer to the other.

Very often, consumers may be aware that their information is being collected by a business entity and in circumstances like that, consumers may not be as concerned about the collection of such information. However, where consumers begin to receive some form of marketing communication where they have not previously given out any information about themselves, consumers concerns arise as they realize that certain information of theirs has been collected without their knowledge or permission being given (Cespedes and Smith (1993) as cited in Sheehan and Hoy, 2000, p. 63).

As reported by (Wang, Lee and Wang, 1998, p. 64), various cases regarding consumer privacy in marketing communications have arisen over the years. Some of these are

i.)                  Privacy concerns surrounding web-based advertisements which track the usage history and preferences of a user through the use of cookies.

ii.)               Privacy concerns relating to malicious programs that can be constructed through security holes in various internet tools which may obtain the credit information (e.g. ActiveX) or personal files (e.g. JavaScript) of a user.

iii.)             Privacy concerns with respect to the use and transfer of a consumer’s private information.

iv.)             Privacy concerns where the purpose for which a consumer’s information was collected ends up being used for another purpose.

v.)                Privacy concerns over the acceptance of a marketer’s policy of using cookies to better their services to you without an option to refuse.

Wang et al (1998) provides for a taxonomy or classification of consumer privacy concerns. Ultimately, the concerns of consumers as it affects their privacy would involve one of more of the following;

-          Improper Access

-          Improper Collection

-          Improper Monitoring

-          Improper Analysis

-          Improper Transfer

-          Unwanted Solicitation

-          Improper Storage

The above are the different ways in which consumer’s concerns on privacy may be categorized. To sum all of the above in a statement, a consumers lack of knowledge awareness or insight and control or restraint over what happens to their personal information is the major concern of any consumer when it comes to privacy (Caudill and Murphy, 2000, p. 13).


With an increase in consumers concerns for privacy comes a need for there to be made available basic legal frameworks which seek to alleviate consumers of their concerns and worries over their privacy as online consumers.

One of the first approaches to building a legal framework for consumer privacy protection was the one taken by the Federal Trade Commission in the United States. In 1999, the Federal Trade Commission alongside the Commerce Department carried out a workshop on online profiling. The major issues identified by the participants was the potential for consumer privacy (Caudill and Murphy, 2000, pp. 9–10).

As stated by Caudill and Murphy(2000, p. 10), the Federal Trade Commission in trying to address these issues raised, tackled the concern of defining the concept of personal information as being both private (income) and public (drivers license) data, as it concerns who bears the responsibility of ensuring consumer privacy, the Federal Trade Commission endorses industry self regulation and in trying to ensure success, the Federal Trade Commission went ahead to develop five fair information principles designed to protect consumers in the collection, use and dissemination of their information. These five fair principles are

a)      Giving Notice / Awareness by companies or businesses to consumers.

b)     Allowing consumers the right to give their consent or have the choice to opt-out.

c)      Ensuring consumers are given access or participatory rights especially when it involves confirming the accuracy of information.

d)     Establishing integrity and security measures for theft or tampering of consumers information by companies or businesses.

e)      The provision of a mechanism for enforcement or redress in favour of consumers where companies fail to comply.

Another approach taken is that of the European Union. The European Union in addressing the concerns of consumers privacy protection, established a directive in 1995 with the intent to harmonize privacy protection in all of its member states.

Lee ((2000) as cited in Fernback and Papacharissi, 2007, p. 720), states that the European Union regulations that protect consumer privacy specified by the Directive on Data Protection of 1998, safeguards individual control over consumer data and requires that foreign trading partners adhere to the same level of equal protection. Thus, the transmission of personal information from EU member countries to other countries without adequate privacy protection is prohibited.

Harbert ((1998) as cited in Caudill and Murphy, 2000, p. 12) expressed that the EU directive takes a more consumer oriented perspective than the U.S does as its structure is based on when and how a company can collect and use consumer information. As conveyed by Caudill and Murphy (2000, p. 12), the EU directive specifies that

i)                    A company in collecting information must have a legitimate and clearly defined purpose.

ii)                 That the company must disclose such a purpose to the consumer from whom the information is being collected.

iii)               That the permission given to use any information must be specifically traceable to the original purpose for which it was authorized.

iv)                The company may keep the data collected to satisfy that reason and that reason alone. Where the company intends to use that data for another purpose, then the company must initiate a new information collection and use process.

From the above, one could say that the approach of the EU directive is much more consumer friendly and is tailored to ameliorate the concerns of consumers as it concerns privacy protection. However, the main issue is not whether one is a better approach, but whether the legalities provided for actually do what they ought to do and whether consumers understand the rights which these legalities provide for them in protecting their privacy.

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As explicitly put forward by Lwin et al (2007, p. 574), where an online consumer perceives that corporations are acting responsibly in terms of their privacy policies, and that sufficient legal regulations are in place and enforced to protect their privacy, users are expected to show less concern for privacy protection and therefore not to resort to carrying out countermeasures. On the other hand, if those power positions are not perceived as acting responsibly, consumer concern is likely to intensify, leading to consumers undertaking defensive measures to try to protect their data privacy.


Ultimately, it is desired that undergoing this research paper would be beneficial in expatiating on all the points made above by the literature which has so far been reviewed. Additionally, this research paper would go further to fill the gaps in the literature reviewed above by giving an insight as to whether online consumers know what exactly they are signing up for in carrying out online transactions and taking a look extensively at the provisions of the laws on consumer privacy and how consumers understand these legal provisions.

It is expected that at the end of this research paper, useful suggestions and recommendations would be made in ensuring that consumers are made aware of their rights in better and more understandable ways as well as keep them informed as to the steps they may take in ensuring their data is properly protected by the companies or businesses which they make such data known to.


  • Caudill, E. M. and Murphy, P. E. (2000) ‘Consumer Online Privacy: Legal and Ethical Issues’, Journal of Public Policy & Marketing, 19(1), pp. 7–19. doi: 10.1509/jppm.
  • Eur-Lex (1995) Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. Available at: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A31995L0046 (Accessed: 2 December 2018).
  • Fernback, J. and Papacharissi, Z. (2007) ‘Online privacy as legal safeguard: the relationship among consumer, online portal, and privacy policies’, New Media & Society, 9(5), pp. 715–734. doi: 10.1177/1461444807080336.
  • Lwin, M., Wirtz, J. and Williams, J. D. (2007) ‘Consumer online privacy concerns and responses: a power–responsibility equilibrium perspective’, Journal of the Academy of Marketing Science, 35(4), pp. 572–585. doi: 10.1007/s11747-006-0003-3.
  • Miyazaki, A. D. (2008) ‘Online Privacy and the Disclosure of Cookie Use: Effects on Consumer Trust and Anticipated Patronage’, Journal of Public Policy & Marketing, 27(1), pp. 19–33. doi: 10.1509/jppm.27.1.19.
  • O’Neil, D. (2001) ‘Analysis of Internet Users’ Level of Online Privacy Concerns’, Social Science Computer Review, 19(1), pp. 17–31. doi: 10.1177/089443930101900103.
  • Phelps, J., Nowak, G. and Ferrell, E. (2000) ‘Privacy Concerns and Consumer Willingness to Provide Personal Information’, Journal of Public Policy & Marketing, 19(1), pp. 27–41. doi: 10.1509/jppm.
  • Sheehan, K. B. and Hoy, M. G. (2000) ‘Dimensions of Privacy Concern among Online Consumers’, Journal of Public Policy & Marketing, 19(1), pp. 62–73. doi: 10.1509/jppm.
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Full Reference of Peer Reviewed Text:

Caudill, E. M. and Murphy, P. E. (2000) ‘Consumer Online Privacy: Legal and Ethical Issues’, Journal of Public Policy & Marketing, 19(1), pp. 7–19. doi: 10.1509/jppm.

1. What review question am I asking of this text?

My research objective is to determine if online consumers fully understand the implications of their online transactions and to further determine if there are laws which seek to protect online consumers and where these laws exist, if the consumers for whom they provide protection have an understanding of the provisions of these laws. The above named text has been chosen because it seeks to provide an insight into my research objective in a broader way as it gives information as to the issues that arise with consumer online privacy whether they be ethical or legal. My purpose of carrying out an analysis of this text being to have a better understanding and insight as to the concerns and issues which may come up under online consumer privacy protection which would in turn help me to better refine my research objective.

2. What type of literature is this?

The literature is a historical theoretical research paper as it provides insight to how online privacy has been an issue from times past and it goes further to show how far online privacy has come in present times as well as provides brief theoretical positions as it pertains to privacy protection while proposing ways to confront online privacy concerns.

3. What sort of intellectual project for study is being undertaken?

a) How clear is it which project the authors are undertaking?

This research paper is a knowledge for critical evaluation as well as a knowledge for action project, as the authors not only critically evaluate various positions and research works, but go further to outline proactive business actions and policy initiatives in tackling online consumer privacy.

b) How does the sort of project being undertaken affect the research questions addressed?

The project undertaken addresses its research questions by looking at the issues at present and providing ways to try to mitigate the gradual erosion of privacy as it concerns online consumers.

c) How does the sort of project being undertaken affect the place of theory?

The investigation of the project undertaken is primarily backed up by theoretical evidence provided by various authors and legal instruments.

d) How does the authors’ target audience affect the reporting of research?

The research paper offers recommendations for action in tackling online consumer privacy.

4. What is being claimed?

a) What are the main kinds of knowledge claim that the authors are making?

The main knowledge claim made by the authors is that of theoretical and research knowledge.

b) How clear are the authors’ claims and overall argument?

From this research paper, it is clear that the authors’ claims and overall argument is that online consumers have and would continue to have privacy concerns and that there should be an integration of business, ethical, public policy as well as legal standards if there is to be a proper amelioration of the concerns of online consumers.

d) With what degree of certainty do the authors make their claims?

The authors make their claims with the acknowledgment of the fact that although it may be premature to offer definitive directions regarding online consumer privacy, it is however needful that alternative possibilities be considered in addressing online consumer privacy.

e) How generalized are the authors’ claims – to what range of phenomena are they claimed to apply?

The authors claims are mainly derived from specific contexts looking at the positions of the laws under the United States of America as well as the European Union and other similar contextual research work previously carried out by various authors.

5. To what extent is there backing for claims?

a) What, if any, range of sources is used to back the claims?

The authors claims are backed by the reviews of research carried out by various other authors as well as real life illustrations of privacy issues.

b) If claims are at least partly based on the authors’ own research, how robust is the evidence?

A look at this research paper would suggest that although the claims are not based primarily on the authors own research but rather a review of other articles and research work done, there is great evidence to show that an in-depth review has been carried out on all research works used in this research paper.

6. To what extent are claims consistent with my experience?

Looking at the time difference between when this research paper was carried out and now, it is amazing that the claims of the authors as at the time these claims were made are still very much relatable to what is still going on presently and this is very much reconcilable to my experiences as an online consumer.

7. What is my summary evaluation of the text in relation to my review question or issue?

a) How convincing are the authors’ claims, and why?

The claims of the authors are certainly convincing to me because as already stated, their claims are in line with the current occurrences of internet marketing and online consumer privacy protection even though there is a slight time difference between the time the claims were made and the present issues surrounding consumer privacy. However, there is a missing gap in the literature reviewed as it does not address the fundamental understanding of online consumers when carrying out online transactions as well as consumers understanding of the laws provided which is the primary aim of looking at my chosen research topic.

b) How, if at all, could the authors have provided stronger backing for their claims?

I think the authors would have been able to provide stronger backing for their claims if they had gone further to carry out some form of primary research to support the secondary research which they conducted.




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