How should we protect identifiable information about us?
eProfits Made Simple believes that computer technologies enable sellers to find out more about their customers while at the same time they enable buyers to search and receive product information. The balance is certainly in favor of sellers since product information are proprietary, implying they are offered only if sellers want to.
On the other hand, information about online consumers seems to flow easily to sellers if technologies are not employed to block such transfer. Since there are sizable gains to be made from refining consumer demand information, collecting information about consumer preferences is widely promoted, and electronic commerce provides a unique opportunity for this. However, while this information is clearly helpful to the sellers and researchers, a standard must be established to protect consumers. Presently, simple notification and disclosure to consumers are all that is needed for information collectors to use such consumer information. Rather than relying on regulatory solutions, however, innovative concepts are being tested in electronic commerce. One new idea is to give consumers the right to sell their own information.

Why should I care for privacy?

eProfits Made Simple believes that selling personal consumption data may be detrimental to consumer welfare. In electronic commerce, such data will be directly linked to purchasing and price negotiation. With demand known, sellers may refuse to lower prices below what they think is a consumer's valuation. However, rather than going back to a market with imperfect demand and inferior product quality, the market may be able to produce an equitable and efficient result. For example, the potentially higher sale price can be partly compensated by a higher payment for personal information. This also demonstrates a reason why consumer information may have to be priced and traded in the market. A slew of economic questions arises regarding prices and the efficiency in such a market. Perhaps, the vigor evidenced in the debate on privacy and anonymity among legal scholars, government officials and free speech activists might guide economists to this task in the future.

Is eCommerce safe?
eProfits Made Simple believes that the Internet security breaches have gotten a lot of press, most vendors and analysts argue that transactions are actually less dangerous in cyberspace than in the physical world. That's because retail sales employees who handle card numbers cause a great deal of credit card fraud.
eCommerce systems remove temptation by encrypting the numbers on a company's servers. For merchants, eCommerce is actually safer than opening a store that could be looted, burned, or flooded. The difficulty is in getting a customer to believe that ecommerce is safe for them. Consumers don't really believe it yet, but experts say eCommerce transactions are safer than ordinary credit card purchases. Every time you pay with a credit card at a store, in a restaurant, or over an 800 number - and every time you throw away a credit card receipt-you make yourself vulnerable to fraud. But ever since the 2.0 versions of Netscape Navigator and Microsoft Internet Explorer, transactions can be encrypted using Secure Sockets Layer (SSL), a protocol that creates a secure connection to the server, protecting the information as it travels over the Internet. SSL uses public key encryption, one of the strongest encryption methods around. A way to tell that a Web site is secured by SSL is when the URL begins with https instead of http. Browser makers and credit card companies are promoting an additional security standard called Secure Electronic Transactions (SET). SET encodes the credit card numbers that sit on vendors' servers so that only banks and credit card companies can read the numbers. No eCommerce system can guarantee 100-percent protection for your credit card, but you're less likely to get your pocket picked online than in a real store.

Is the government going to regulate eCommerce?

eProfits Made Simple found last year, the Senate overwhelmingly approved the Internet Tax Freedom Act, which imposed a three-year moratorium on new Internet taxes. This act bars state or local governments from imposing new taxes on access to the Internet and data flowing over the Internet, as well as prohibits any new eCommerce taxes. Local legislators are the ones chopping at the bit to get a cut of the eCommerce action, and they are not all waiting for the end of the three-year moratorium. The National Association of Counties recently unanimously approved a resolution asking Congress to impose a sales tax on all online purchases. Local governments estimate that $5 billion annually are already lost to out-of-state mail order business, and with the rapid rise of ecommerce, this number will only increase. While there have been some rumblings of impatience in Congress, the federal government is urging local and state officials to respect the Internet Tax Freedom Act's ban. It is very likely that when the moratorium expires, the taxation situation will be in for some changes. There is an advisory committee already meeting to work on post-moratorium issues, and many ideas are being discussed. The Advisory Committee on Electronic Commerce was mandated by the Internet Tax Freedom Act, and it will consider such topics as a flat national Internet tax and ways to simplify sales tax for online purchases. While the feds favor no additional taxes for now, state governments are grappling with the issue individually. Getting international agreement on Net taxes may be the biggest hurdle to overcome.