InformationWeek: The Business Value of Technology

Even in the United States, online retail activity in the fourth quarter of 1999 accounted for less than 0.65% of total retail business ($5.3 billion of $821.2 billion, according to the Commerce Department). Is there room for growth? Yes-but consider the global potential.

About 4.6% of the world's population (275 million of 6 billion) had Internet access as of February 2000, up from 3.3% a year earlier. North America has about 5% of the world's population but about half its online population. It's projected that worldwide Internet access will increase during the next four years to about 10% and that there will be more than 700 million Internet-connected devices by 2003, up from 200 million last year.

A basic tenet of global IT management is that every political boundary you cross adds another magnitude of legal, ethical, cultural, and technical complexity. There are 200-odd countries and countless other political and legal jurisdictions, plus a gaggle of regional and global alliances, treaties, partnerships, and organizations that play a part in global trade-and, therefore, E-trade. Because the Internet blurs boundaries, doing E-business could subject you to unfamiliar jurisdictions, laws, taxes, cultures, and even technologies.

The global nature of the Internet means that regulatory actions in one country may affect the rights of users around the world. In addition to security, privacy, and content regulation issues, there's the legal and regulatory framework for E-transactions, taxation, and intellectual property concerns, plus access issues and questions concerning the digital divide within and between countries.

Consider privacy. Many countries have laws regulating transborder data flow, including the European Union's 1995 and 1997 directives on data protection and privacy. This year alone, we've seen technology-related privacy actions in China, France, Germany, Norway, Singapore, South Africa, Switzerland, and the United Kingdom, as well as a tentative European Union-U.S. data-privacy agreement that would require U.S. companies to upgrade their privacy standards to meet Europe's stringent requirements (March 6, p. 22).

So what can you do to keep out of E-privacy trouble? These five points should help:

• Tell it like it is: Openly disclose your privacy policies.

• Show me: Let consumers see and correct personal data, just as credit bureaus do.

• Give them a choice: Let your customers easily opt in or opt out.

• Practice quality: Poor software quality practices caused the security and privacy problems that cost both Intuit and H&R Block precious customer confidence.

• Stay informed: Good sources of privacy information include the Electronic Privacy Information Center, Privacy International, and the Center for Democracy and Technology.

Leon A. Kappelman is a professor and the associate director of the Center for Quality and Productivity at the University of North Texas. You can reach him at kapp@unt.edu.