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Source: dot commerce

Posted on February 23, 2001

      Of all the issues surrounding e-commerce, why has so much emphasis been placed on security? The answer lies at the very core of the reason business is conducted. Business leaders want to build trust with clients, business partners, community and employees. Trust allows them to build and maintain a solid reputation and profitability.

      For most leaders, security is a technological issue. They put their faith in technical solutions such as firewalls, encryption, digital signatures and passwords. They hire Chief Technology Officers who juggle technical infrastructures but who cannot explain in business terms what they do or quantify the return on investment of expensive security technologies. The result? Even the most business-savvy executives approve escalating security costs because of the fear of being vulnerable to intruders stealing trade secrets.

      But, regardless of the money and time invested, they can't keep pace with the technologies created to undermine it. However, there is an area that creates stronger trust between and customers, partners and employees than security. It's called privacy.

      In response to privacy concerns, Canada will phase in Bill C6 -- the Personal Information Protection and Electronics Document Act -- to force all business to act more responsibly with personal information collected online and offline.

      While the legislation is a step forward, its complexity may be its undoing.

      The Act, which applies to personally identifiable information used or disclosed in the course of commercial activities, will apply to all businesses, private and public, large and small, in all jurisdictions within three years. This schedule was designed to allow businesses to get over the implementation hump and for provinces to develop complementary laws. The only information not covered by Bill C6 is an employee's name, title, business address or telephone number.

      However, the legislation makes it difficult to determine whether private information collected and shared across provinces complies, or needs to comply with Bill C6. The result: businesses could become unknowing 'law breakers', particularly during direct marketing campaigns.

      Bill C6 allows consumers to demand businesses to disclose privacy procedures and challenge the accuracy of data and compliance with any of its principles. The result could be devastating for any company experiencing a change in structure, markets or technologies. If a company, during such a change, is flooded with complaints or inquiries to which it must reply within 30 days, client information-dependent operations could grind to a halt. Moreover, if the company is found to be at fault, it could face huge fines.

      The legislation remains unclear on how the federal Office of the Privacy Commissioner -- the Office for enforcing Bill C6 -- will deal with complaints and responses. We don't know the Commissioner's turnaround time or criteria as to whose concerns get addressed. The result could be a huge bottleneck where companies wait years before proceeding with business as usual.

      Bill C6 affects organizations in three stages. As of Jan. 1, 2001, it applies to personal information (except personal health information) that is collected by all federally-regulated organizations such as banks and telecommunications and transportation companies. By next January, it will be prohibitive for those same organizations to ask or collect information about an individual's mental or physical health. Finally, on Jan. 1, 2004, Bill C6 will be extended to include personal information collected by any organization.

      Personal information is defined as any factual or subjective information, recorded or not about an individual. This includes age, name, income, ethnic origin, blood type and credit records. Any organization or individual that refuses to abide by the Act will face a maximum fine of $100,000 if convicted.

      Bill C6, which does not generate revenue for the federal government, does not appear to be supported by any coordinated public awareness or educational campaign. The result is that many companies may not be educated about the law, making them unknowing 'law breakers.'

      In turn, an uneven competitive landscape will emerge between those making the investment to comply and those that don't.

      Not all is bleak in the world of privacy. Because companies control their internal procedures, not only can they successfully address privacy issues, they can strengthen credibility and trustworthiness in the eyes of their clients. There are a number of valuable sources of information and services that can bring organizations into compliance with Bill C6 effectively, painlessly and even provide opportunities to gain market distinctiveness.

      They can win the tug of war for customers' trust by recognizing that privacy gives them the upper hand. For more information on turning privacy issues into business advantages, visit Privacydetective.com and E-CommerceALERT.com.

— By Robert Gold

      Robert Gold is the managing partner in the Toronto firm of Bennett Gold, Chartered Accountants (BennettGold.ca). His areas of expertise include emerging trends of the Internet, e-commerce and WebTrust certification. Robert is the founder, researcher and creative director of E-CommerceALERT.com

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