According to a report released by The Progress & Freedom Foundation (PFF), a survey of popular Web sites showed that the proportion collecting personal identifying information other than e-mail addresses fell by 12 percent. Among a random sample of Web sites, the number of sites collecting such information dropped by 13 percent.

The report, according to the foundation, was designed to mirror a Federal Communications Commission (FCC) report released in May 2000. It included 300 randomly chosen Web sites with more than 39,000 unique visitors, in addition to 100 of the most popular sites as ranked by Nielsen/NetRatings.

Accounting firm Ernst & Young compiled the survey results.

Report Reflects Demand

Jeffrey A. Eisenach, PFF president and a co-author of the report, said the results indicate an evolution of online consumer privacy. "But from a consumer perspective, they are all in the right direction," Eisenach noted.

Allan Carey, a senior analyst at research firm IDC, told NewsFactor he is not surprised by the survey results, and that he views the change in privacy policies as a corporate response to consumer demand.

"One of the biggest concerns for consumers has been the disclosure of personal information," Carey said.

Better Policy Practices

The PFF report noted that there was little change in the number of Web sites that posted a privacy policy -- nearly all the popular destinations displayed their policy, and more than 80 percent of the random sample offered one as well.

However, the policies were placed more prominently on many surveyed sites and did a better job of explaining how companies use customer information.

In addition, the number of Web sites that offered customers an "opt-in" policy for third-party marketing purposes more than doubled from 15 to 32 percent.

Carey agreed that companies are making privacy policies more accessible and said he expects to see this trend continue.

"Consumers want to know the company they are transacting with does have a privacy policy in place, and not just tucked away in the lower left-hand corner of the site," he said.

Cookie Use Decreases

Both categories of surveyed sites also recorded a steep decline in the use of third-party cookies. Nearly 30 percent had dropped the technology, which tracks surfing behavior across multiple Web sites.

Carey also noted that consumers are well aware that companies track their Web activities through use of cookies, and he said such invasiveness could hurt customer trust, which is highly prized in a tough economic Web environment.

"I think organizations understand if they do this type of activity -- tracking surfers -- and sell that information to third parties, they stand to lose that customer loyalty," Carey said.

P3P, Privacy Seals Adoption Lags

The report also said that P3P -- a technology that lets consumers know about a company's privacy practice automatically -- has been adopted by nearly 25 percent of the most popular Web sites.

However, privacy seals were displayed on less than half of the top 100 sites, and on only one-eighth of randomly sampled sites.

Privacy as Business

Privacy Foundation fellow Philip L. Gordon told NewsFactor in an earlier interview that the link between online consumer privacy and business is strong.

"I think commercial enterprises should look at privacy as a benefit they could sell to their customers, rather than as a detriment that restricts their ability to earn profits," Gordon noted.

"Privacy does not have to mean the opposite of earning profits. The two can go hand in hand," he added.

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