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Chapter: 

Commercial challenges

Privacy challenges also exist outside of the traditional security policy domain.  The private sector is often critical of new regulatory regimes, and privacy regulations are certainly no exception.  Data protection laws create onerous burdens for companies to follow and sometimes punitive fines for not adhering to complex rules.  Yet, companies are not necessarily opposed to privacy and privacy law:  many companies also promote the need for privacy protections but would rather see it as an issue that is left to the market to resolve, rather than strict inflexible rules from governments.  But this is not necessarily always true:  many companies are now calling for global standards for privacy protection in order to enable confidence and trust in global commercial transactions and to enable trans-border data flows for the international IT industry.

The restriction of personal information flows can be seen as a barrier to economic activity.  Those who propose looser regulatory arrangements note that the more that companies can know about you, the better the service they may provide.  They may be able to price items more competitively and to a consumer's needs, and they may be able to market items to consumers based on their knowledge of the consumer's interests.  But data protection rules do not reject consumer profiling outright, rather they propose that this form of profiling takes place within a regulatory framework that provides consumers with fair and lawful information processing.

Apart from the concern about trans-border data flows, the next most pressing issue for consumer rights is internet advertising.  Internet advertising is the source of much of the money that funds the development of the online world, from faster internet connections to free access to news sites, and the provision of other free services.  Companies like Google, Microsoft and Yahoo! are fighting an intense battle to earn the billions of dollars in this online marketplace that thrives on the processing of personal information:  if they can track you online to identify your interests, they may market products to you in a better way. 

It is not so simple, however, to say that data protection law impedes this form of activity.  Many companies are finding that they must build privacy protections into their systems in order to gain consumer confidence.  They are devising tracking and profiling methods that do not process personal information, for instance.

Consumers are not unconcerned.  With increasing awareness of identity fraud and other types of online fraud consumers are becoming more attuned to privacy problems.  As companies around the world are admitting the fact that they have lost billions of personal files such as banking details, personal preferences, biographic information, customers are demanding increased protections.  In this sense, consumer security and privacy are indeed tightly bound.  In much of the rest of the world, consumers are being protected under data protection laws.  However Bangladesh, the Philippines, India, and Pakistan are behind on establishing similar rights to their citizen-consumers.