Buy It for Myself ’

Ecommerce web sites are increasingly introducing personalized features in order to build and retain relationships with customers and increase the number of purchases made by each customer. While survey data, (Personalization Consortium, 2000; Personalization Consortium, 2001), user studies (Karat, et al, 2003), and experience (Manber, 2000) indicate that many individuals appreciate personalization and find it useful, personalization also raises a number of privacy concerns ranging from user discomfort with a computer inferring information about them based on their purchases to concerns about co-workers, identity thieves, or the government gaining access to personalization profiles. In some cases users will provide personal data to web sites in order to receive a personalized service, despite their privacy concerns; in other cases users may turn away from a site because of privacy concerns (Ackerman, et al., 1999; Culnan and Milne, 2001; Cyber Dialogue, 2001, Berk, 2003). As recent studies have suggested that the benefits to a web site of offering personalized services often do not outweigh the costs (Berk, 2003), it is important to consider ways of designing personalization systems that will maximize the return on the investment. Improving the privacy associated with these systems so that web site visitors are more willing to trust and use them is a step in that direction. This chapter begins with a discussion of the privacy risks associated with personalization. It then provides an overview of the fair information practice principles and discusses how they may be applied to the design of personalization systems, and introduces privacy laws and self-regulatory guidelines relevant to personalization. Finally, the chapter describes a number of approaches to personalization system design that can reduce privacy risks.