Shoppers have always been at a disadvantage on the Web. The new Electronic Signatures Law has only added to the problem. Web sites post terms and conditions (T&C), which bind the visitors. Most visitors never bother to read them, but they''re bound nonetheless. With merchants, customers do occasionally read the policies (returns, exchanges, refunds, shipping, privacy, etc.), but often not until after there''s a problem.
In April 2000, Forrester produced a report entitled "Pricing Gets Personal." Everyone was so busy discussing the other report, "The Demise of Dot Com Retailers," released the same month, that no one noticed what was in this intriguing report, except perhaps Amazon.com. Recall that last year Amazon was caught offering different prices to different customers for DVDs. Once they were caught - they called it either a server error or a pricing test, depending on whom you asked - they changed their policy. I think they were simply testing out Forrester''s suggestion: Offer different prices to different customers based on the projected lifetime value/cost of those customers. One specific recommendation made in the report was to discourage customers with a history of returning every pair of shoes they ordered by intentionally overpricing shoes only for them.
Personal Terms and Conditions
I would like to see a browser that offers me a "terms and conditions" (T&C) wizard that allows me to specify how I agree to have my personal information used (aggregated, shared with manufacturers, sold, etc.) by a merchant or news site. The browser could store my personal information in a browser-created file or cookie in TCML (term and conditions markup language, a not-yet-created version of XML), which would be transmitted to a Web server along with the other information my browser sends the server about me (browser version, operating system, IP address, etc.). (You did know that every time your browser requests a page, it sends information about you to the server, didn''t you?)
The Web server of every site I visit would get an XML version of my T&C for doing business with them. The site could comply fully, comply to some degree, or not comply at all. Their degree of compliance would be indicated to me by an icon in the frame of the browser next to the locked lock that appears during secure sessions. I recommend a traffic light: green could mean fully compliant, amber, somewhat compliant, and red, not at all compliant. That''s a language everyone could understand. Alternatively, I could tell my browser to give me pop-up alerts when I''m entering a site that doesn''t comply with my T&C just as I can ask it to alert me when a site is planting a cookie. If I desire to shop from a site that generates a red light in my T&C traffic signal, then I have to make the decision: stick to my principles or get that beautiful pink sweater set on sale. Whichever way the consumer chooses, the consumer has made an informed choice, which is all anyone should be asking.
Third-Party Intermediaries Help Shoppers Negotiate the Deal
Companies like ebates.com and Dash.com have tried to ingratiate themselves with customers by offering rebates on purchases (basically a kick-back of the affiliate commission) that are based on shoppers either clicking through the Dash.com''s DashBar or using an ebates.com e-mail address.
Imagine if third parties like these screened merchants or even matched customers with T&C-compliant merchants. What''s more important to shoppers: a 5% rebate or their privacy? I suppose it depends on the consumer, but right now no one is offering the privacy option, so it''s impossible to know. According to IDC, 65% of online shoppers have failed to complete a purchase more than once in the past six months due to privacy concerns. How will that translate once the choice is between privacy and savings? I suppose it depends how badly shoppers want the merchandise or services. It remains to be seen.
Small Potatoes for Merchants
Before you accuse me of making a foray into utopian Web never-never land, let me tell you what''s in this for merchants. Merchants have been reluctant to offer any kind of experimental differentiated pricing model to consumers for fear of being accused of discrimination or worse. If merchants accept consumers'' T&C, then the merchants can make clear that pricing is differentiated by the degree of privacy provided (or whatever fluffy language the marketing department turns it into). Retailers will then be justified in offering different pricing, without the Amazon backlash.
Big Rewards for Merchants
The biggest benefit of my still-to-be-invented TCML is that it solves the thorniest privacy-related problem for merchants: the unknown cost of legislation. When consumers come to the table with something to trade for personal information, then the cries of the privacy industry are muted by the argument for consumer choice. Privacy? Choice? By making the debate between the two, rather than for both, legislators are forced to look past the facile arguments of privacy advocates. The privacy industry has done a service by making consumers aware of the problem of having their data shared without their consent. However, the solution is not in legislation. Legislation, indeed, would give consumers privacy without choices.
I believe many, if not most, legislators believe privacy on the Web is a can of worms than nobody wants to open. No one thinks this will be simple or without consequence. Almost certainly, the initial reforms will be overblown and will have to be revised over time. Of course, the first thing businesses do when a new law is passed is create a department to comply with the law - that''s lost productivity for businesses. I think many legislators are reluctant to kill the goose, or even cripple the goose that has been laying mostly golden eggs for the past decade.
Beware Legislators with Inflammatory Neologisms
Consider the legislation proposed by Senator John Edwards (D-NC). He actually called his bill the Spyware Control and Privacy Protection Act, suggesting to the paranoid that Web server logs are some sort of spyware. This kind of legislation may have good intentions, or it may not. I''m sure some young legislative assistant is congratulating himself on his inflammatory neologism, but it does a huge disservice to legitimate businesses when they''re accused of spying on their customers simply because they have their Web server logging enabled.
What we need is a liaison - preferably a consortium of big names from software, content, and retail corporations, the media, and government - to propose TCML to the W3C (Worldwide Web Consortium - the body that approves all Web-based standards and protocols). There''s no technical reason why browsers and servers can''t agree to terms and conditions before the first page is loaded, just as they agree on protocols before the first page loads on the browser (or micro-browser).
The technical challenges are trivial. A user interface expert could design an easily understood wizard about privacy in three screens. The major browsers make it very easy for users to get upgrades. Web server software is constantly being updated with service packs to close security holes as they''re discovered.
If legislators want to pass a law about privacy, let them pass a law requiring businesses to comply with TCML negotiation within one year or even within six months. Let the W3C iron out the minor technical challenges, including formalizing TCML. Before it''s too late, let''s use technology, not lawyers, to solve this problem.
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena is now available. She can be reached at agutzman@internet.com
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