Providing Parents with Online Privacy Information: Approaches in the US and the UK

Policy makers are faced with the task of ensuring that parents are offered information on children's Web sites to help them reduce their children's online privacy risks. This exploratory research compares the approaches of two countries with different regulatory philosophies regarding children's privacy: the United States, with a limited and sectoral approach to general privacy but a formalized approach to children's online privacy, and the United Kingdom, with a comprehensive overarching approach to privacy, but no formal stipulations for children's privacy. We examined privacy statements on 100 children's Web sites from each country in order to compare the products of each regulatory environment. ********** As billions of dollars in commerce shift to digital platforms, consumer online privacy remains an ongoing concern (Hopkins 2006). Governments in many countries face the challenge of creating effective Internet privacy policies that will protect consumer rights to control personal information (Lwin, Wirtz and Williams 2007; Norberg, Horne and Horne 2007). One particularly vulnerable group of online consumers with regard to privacy risks is children (Lwin, Stanaland and Miyazaki 2008). Child advocacy groups, including the American Academy of Pediatrics and the American Psychological Association, have recently called upon the Federal Trade Commission (FTC) to increase oversight of companies that track the behavior of minors online, arguing that adolescents divulge more information than they realize and do not understand privacy issues (Menn and Semuels 2008). Policy makers are thus faced with the task of ensuring that parents are offered privacy information for individual Web sites to help children reduce their online privacy risks. Lwin, Wirtz and Williams (2007, p. 583) found that "consumers look to both organizational policies and governmental regulations to safeguard their online privacy," and also reported that robust privacy policies can reduce consumer privacy concern. How do different regulatory approaches to privacy influence the information available to parents on Web sites? The current exploratory research compares the approaches of two countries with different regulatory philosophies regarding children's privacy: the United States, with a limited and sectoral approach to general privacy but a formalized approach to children's online privacy, and the United Kingdom, with a comprehensive overarching approach to privacy, but no specific stipulations for children's online privacy. We examine the types of information parents in these two countries are given in the form of privacy statements on children's Web sites in order to compare the products of each regulatory approach. The results of a content analysis of children's Web sites in the United States and the United Kingdom are discussed, and recommendations for future research in consumer education and policy are given. BACKGROUND Online Consumer Privacy In addition to the exchange of money for products and services, online transactions now involve what is considered to be a "second exchange" of consumer personal information for access, convenience, customization or some other type of value (Milne, Culnan and Greene 2006). Although online users attempt to strike a balance between the information they provide and what they receive in return (Sheehan and Hoy 2000), there is still an inherent conflict between marketers' implementation of personalized communication strategies and the consumer's right to privacy (Pitta, Franzak and Laric 2003). Consumers are only able to control their privacy if they possess the information necessary to make relevant choices (Nairn and Monkgol 2007). In order to assess the benefits and costs of the second exchange, consumers must be informed of a Web site's plans for using their personal data, and a well-articulated privacy policy can prevent information asymmetry (Spinello 2002). Accordingly, notifying consumers of what information is collected from them and by what entity appears to allay privacy concerns (Sheehan and Hoy 2000). …