Week 12: Effect of the Internet on Consumers

A good overview of Bots and further links may be found in http://www.botspot.com/. Privacy issues are discussed at http://www.ftc.gov/privacy/, and http://www.aclu.org/echelonwatch/index.html.

  1. Consumer Search

  1. Since the internet is a collection of information written in a common language to a common standard, searching for this information is easier than searching for information in the non-digital world. Enter Bots. (where does the term come from?)

  2. Bots are search engines often specialized. (Search engines are "smaller" than meta-search engines which search using multiple search engines and many but not all bots are specialized search engines looking for particular categories of information).

  3. Shop-bots look for best prices. Many of them are specialized – AuctionWatch.com & Bidders Edge look at auction sites, Stock Agent looks at stock sites (for dividend announcements, chat-room messages, etc.), Bestbooks looks at book prices, BotBess checks out folk dance offerings ,…. Some – like Bottom Dollar – search multiple categories.

  4. Technology – use "intelligent" programs to track millions of sites.

  5. Pricing – some charge, many others are free (why are they free?).

  6. Implication for consumer – price search is trivial; quality search may not be.

  7. Further implications – software that keeps track of consumer’s preferences? Automatically searches? Posts updates on sales? Automatically buys if the price drops sufficiently?

 

2. Privacy

  1. Three sorts of privacy issues have arisen – Consumer Profiling, (Credit card) Fraud, and Child-Centered Issues.

  2. Consumer Profiling – the practice by firms in which they use (demographic & economic) data gathered during an online visit to create a customer’s profile, i.e., a report of their likes and dislikes. This information is then subsequently used to target advertising. Example – New York Times, MP3 (?).

  3. Fraud – the potential theft of sensitive (economic) information that has not been suitably encrypted. (There is no 100% fool-proof encryption anyway).

  4. Child pornography, violence, etc. being viewed by children.

  5. Issues on profiling – advantages: better and wider choices for consumers (Amazon.com’s practice), less time wasted on search… Disadvantages – misuse of the data (for blackmail?), junk mail .. When collected by security agencies better detection of crime.

  6. Issues on Fraud – bad for consumers.

  7. Issues on Child Privacy – COPPA ("Child Online Privacy Protection Act") protects information taken from children and meant for children