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Amazon's Tough-Love Privacy Policy

By Keith Regan
Sep 6, 2000 12:00 AM PT

It's a slightly chilling e-mail to receive. First, it comes from the legal department of Amazon.com, making it the Internet equivalent of a crisp envelope bearing a law firm's lengthy name. Second, it spells out a change in Amazon's privacy policy that, at first glance, appears to be bad news for consumers and company alike.

Amazon's Tough-Love Privacy Policy

Surely, customers will rebel against word that Amazon now considers their personal information a business asset -- in all likelihood, one more valuable than its warehouses full of products, should the dot-com ever collapse. Surely, Amazon will be pummeled with angry e-mails from customers demanding their names be deleted from such lists at once. Surely, the company will relent and rethink its position on privacy. Right?

Not so fast. Amazon has taken a huge risk, to be sure, with its sternly worded new policy and the attendant notification. But it's a risk that will pay off, even in the face of swelling public belief that e-commerce companies are running amok when it comes to consumer privacy. And when it works, the entire e-tail world will have Jeff Bezos and Amazon to thank for breaking down yet another barrier to e-commerce success.

Meet the New Boss

The fact is, the new policy does a lot more than put Amazon's customers on notice. It shifts the balance by taking control of information from the individual and giving it to Amazon. While that might make some people angry, odds are good that the vast majority of people who received the privacy notice in their inboxes either did not read it at all or gave it a cursory glance and made a mental note to check out the entire policy on the Web site later -- something very few will actually do.

Will some people raise a stink? Sure, but Amazon has 23 million customers -- there are bound to be a few thousand squeaky wheels. Amazon is betting that despite recent research showing that consumers want control of their online privacy, most are just too passive or lazy or trustworthy -- depending upon your view of human nature -- to do anything about it when that control is taken away.

That leaves the ball in Amazon's court. In one single action, the company sharply reduced its legal liability and provided itself a clear pathway toward a profitable sale of one or more of its many online properties, if it ever chooses to go that route.

Handle with Care

Now it's up to Amazon to be a careful and considerate steward of that information. If the company does right by its customers -- which might be as simple as not doing something wrong, such as suddenly selling off three divisions and making the policy change seem riddled with ulterior motives -- Amazon will reinforce the notion that it's okay to give up control of personal information.

If consumers trust e-commerce companies, they will be less likely to demand that they keep their hands off their personal data. In other words, Amazon is now in a position to rebuild the trust lost in the Toysmart.com debacle. Bezos and company have a chance to undo those bad feelings and start the Web and its consumer users down a new relationship path, one that leads to the promised land for e-tailers.

Crash and Burn?

Amazon seemed to be flying straight into a mountain of public opinion when it announced its policy. After all, it came just days after widespread coverage of a Pew Internet & American Life report showing that the vast majority of U.S. computer users want "opt-in" privacy policies that give them control over their own data. Some people must be wondering whether the Amazon lawyers are just too busy to read the news.

However, Amazon is undoubtedly betting those results say more about Toysmart.com than about consumer preference. And they're right. Most of the survey respondents probably told the pollsters they wanted to control their online destinies because they thought it was the right answer or because they thought they should be angry about Toysmart's about-face. But in the real world, where harried lives require surrendering control of some things, watching where every blip of electronic data goes is hardly a priority.

No Fumbles

If Amazon can keep from falling down with its precious cargo in hand, it will do more to aid the cause of online privacy than all past efforts and task force reports and e-tailer promises combined.

Will Amazon's move influence lawmakers to change their minds and back away from privacy legislation? No. However, if enough time passes between now and the crunch time before a vote, Amazon might be able to show how well it has behaved with its new-found control over personal data. The fox might have been guarding the chicken coop, Amazon can say, but the chickens remained safe and sound all along.

Of course, if there are feathers strewn about and hens missing, all bets are off. In no time, there will be an influx of privacy laws to address that problem. Which is exactly why Amazon won't let that happen. The stakes are simply too high.


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