Privacy

Privacy, generally defined as the right to be left alone, is an important issue in American business. Privacy issues in the United States have existed since the creation of the country, but they have changed over time. In the 18th century, Americans held government in distrust, based on their experiences with a monarchy, and resisted government knowledge of individual activities. Postal secrecy was a concern first expressed by Benjamin Franklin. As technology changed, privacy concerns arose regarding telegraph and telephone communications and, more recently, surveillance activities. Numbers, such as those issued by SOCIAL SECURITY, data banks, and the U.S. CENSUS BUREAU, have also evoked privacy concerns. The Civil War general William Sherman supposedly used census data to locate and destroy industrial production in the South. With today’s electronic data systems and INTERNET technology, privacy is a major concern for both consumers and businesses. Generally Americans are more ambivalent about privacy issues than Europeans, although in 2000 the EUROPEAN UNION passed strong information-protection (safe harbor) laws. Privacy issues include employer/employee relationships, customer/firm relationships, and individual and firm relationships with government. The Fourth Amendment to the U.S. Constitution protects people against arbitrary and unreasonable government violations of their privacy rights. The key word in the Fourth Amendment is unreasonable. Various rulings have defined and refined what is considered reasonable and unreasonable practices related to privacy. Most business records were found not to be protected by privacy laws, and often material found in garbage and Dumpsters have not been subject to privacy protection. During President Richard Nixon’s administration, abuses of privacy protections, including INTERNAL REVENUE SERVICE audits of political “enemies,” led to passage of the Privacy Act of 1974. This act allows individuals to inspect federal agency files that contain information about them and to request that erroneous or incomplete records be corrected. Access to credit reports, an important factor in business decisions, is also protected under the Privacy Act. Businesses must seek approval from customers to access credit data, and employees have gained greater rights of access to personnel files held by employers, allowing job seekers to see what former employers have written about them. Medical records have become an important area of individual and individual/firm concern. A major issue is that employers can use medical-payments information to determine which employees are ill and what illnesses they have. The biggest change in privacy concerns in American business surrounds Internet data collection and use. “Cookies,” electronic tracers allowing companies to track CONSUMER BEHAVIOR on the Internet, provide valuable information about individual consumers and are placed without the knowledge of most Internet users. Business interests are lobbying for a system of opt-out Internet data collection, where consumers can choose not to have information about them collected and disseminated. Consumer groups are pressing for an opt-in system where data can only be collected with the prior approval of Internet users.