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IBM Sends Out a Shout on Privacy

IBM Corp., Armonk, NY, announced to the online community last week that it will pull advertising from Web sites in the United States and Canada that lack clear privacy policies.

Big Blue — which will spend $60 million in Internet advertising this year, second only to Microsoft — said it is taking a stand partly because the growth of e-commerce is thought to be inhibited by consumer concerns over Internet privacy. However, IBM spokesman John Bukovinsky said, “We are not going to be in a policing position. But we are notifying companies now, wherever we have advertising, that a privacy policy is going to be required.”

IBM's Internet advertising agency, OgilvyOne, a division of Ogilvy & Mather Worldwide, New York, immediately began mailing notification letters to an estimated 360 Web sites where IBM currently advertises in North America. The letter explains the new policy, which takes effect June 1, and details the importance that privacy policies contribute to consumers' confidence in the online world.

Privacy analysts applauded the initiative. At the Center for Social and Legal Research, Alan Westin, president/publisher of the Privacy & American Business report, said the move provides a valuable incentive for companies to post policies and will likely have a significant effect.

“IBM is saying there is an ethical practice that requires privacy communications be made to the consumer,” Westin said, “and any organization that does not provide that is not where the company wants to put its advertising. It's very commendable.”

Others complained that no real corner has been turned and that IBM is simply hoping to further stall any possibility of the government instituting regulations. Marc Rotenberg, executive director of the Electronic Privacy Information Center, Washington, was reported as saying it was simply “privacy policy as a disclaimer,” reminding Internet users that such postings don't force businesses to guarantee that personal information won't be sold to third parties.

At the FTC, chairman Robert Pitofsky characterized the announcement as “an admirable step.”

Outlining the basic components IBM hopes to see incorporated into posted online privacy statements, Bukovinsky said, “What we are suggesting to them is that they follow the guidelines of the Online Privacy Alliance, which cover three areas: what information you are collecting; how you are going to use it; and whether the consumer has the opportunity to tell the Web site that they are not interested in having their personal information used in any other way.”

When asked why no major corporation had taken such a stand before now, Bukovinsky offered that as recently as five years ago the Internet was still a gleam in many people's eyes. Today, its growth requires that there be a fundamental element of confidence about the industry that consumers need to feel comfortable.

“We think that this is a way for us to begin using the financial leverage of our advertising volume by pushing what we believe is just very basic and fundamental,” he said, “and we're hoping that other companies follow.”

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