Do Business Well

Shoppers wanting to get their caffeine fix online at www.starbucks.com now have only one path to take when they pay for their beans. If they are already registered with Passport, Microsoft’s new identity-verification program, they can use it to complete their purchase. If not, they are directed to a site where they can sign up for Passport. Passport is being marketed as a ‘one-click’ solution to obtaining access to Web sites requiring registration and to make purchases over the Internet.This means that shoppers cannot buy their coffee without letting Microsoft be part of the transaction. Starbucks used to let shoppers pay for their purchases by credit card, but in May 2001 it joined fifty other affiliated sites and switched to Passport. Now the personal information of every Starbucks.com buyer is stored in Microsoft’s vast database.

Privacy advocates are waking up, and they don’t like the smell. In August 2001 the Electronic Privacy Information Centre (EPIC) filed a complaint with the FTC alleging that Passport collects personal information deceptively. It fears that Microsoft might make use of the potentially vast amounts of data on Internet shoppers to develop a monopoly position in online payment systems and hence e-Commerce itself. EPIC also wants Microsoft to be ordered to make changes to its pending Windows XP operating system so that users are able to conceal their identities when using the Internet. Microsoft denies that it plans to turn the data over to third parties, or that it forced Starbucks.com to make Passport an exclusive payment arrangement. Starbucks claims the Passport-only policy applies only on a ‘test basis’ and will be re-evaluated later in 2002.

Source: Adapted from Cohen (2001)

Odd

Spam (sending persistent annoying messages)

Unsolicited electronic junk mail known as `spam’ now makes up about 10 per cent of all email throughout the world. The practice of sending it is heavily frowned upon in the online community, and offenders are known to be vulnerable to bulk retaliation that can be large enough to crash their systems. Email, of course, can be quickly and cheaply distributed to a large number of people simultaneously. The EU’s Distance Selling Directive (1997) allows consumers to `opt out’ of unsolicited emails, but no protection is given to business recipients, and financial service contracts are also exempted, even in the B2C arena. Technological solutions to this problem are now emerging. For example, Hotmail (www.hotmail.corn) has a filtering service that redirects junk mail to a separate folder. A US ISP called Community Connexion has developed a free product called the Anonymizer (www.anonymizer.com) that allows users to remain anonymous while surfing the Web.

Security

One of the biggest concerns about online activity is the issue of security. Developing the ability to protect information resources from unwanted access by hackers or viruses is a major headache for many organizations. The growth of the mobile Internet (see Chapter 7), whereby employees are increasingly able to access company databases and other internal information while on the move, has piled additional pressure on security systems. At the beginning of the chapter we discussed some high-profile cases of security breaches. From a customer’s perspective, the main worry involves the risk of credit card fraud if an individual’s details are stored electronically, although this risk is little different from that associated with other forms of credit card transactions. Research by Jupiter Communications (2000) found that reassurance over security was the primary factor in turning online browsers into buyers.

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