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September 18, 2001

In this Issue:

Under the Microscope

New enterprise tools and services scrutinize privacy initiatives

Privacy Watch

Gallup Results. Based on an online poll conducted in June, The Gallup Organization concluded that 78 percent of email users are concerned about the privacy of their personal information and 82 percent are concerned about misuse of credit card information, while more than 70 percent worry about Internet usage records and cookie files.

Microsoft Complaint. The Electronic Privacy Information Center has filed a complaint with the Federal Trade Commission about Microsoft's plans to equip its Windows XP operating system with the Passport identification and authentication system.

Getting Tough. A California Senate bill (S.B. 773) with more stringent privacy protections than federal laws has been approved by the state Senate and is now moving through state Assembly committees on its way to a final vote. S.B. 773 requires banks, financial institutions, and insurance companies to obtain permission before selling or sharing consumer information with third parties. This "opt-in" approach will mean more work and higher costs for firms than the lenient federal "opt-out" provisions.

It's no secret that consumers have grown increasingly sensitive to privacy issues associated with their Internet activities. Complaints from individuals and advocates about how companies collect and use consumer Internet data have prompted state and federal legislators to investigate privacy problems and draft industry regulations (see Privacy Watch, at right).

Now, vendors are scrambling to deliver privacy management solutions and services to help organizations track data practices and monitor compliance with privacy laws, especially in the e-commerce realm.

"Seventy-three of the Fortune 100 companies are covered by existing privacy regulation, yet they have no process for assessing and addressing the risks of how they handle personal data or personally identifiable information," said John C. McCarthy, group director at Forrester Research Inc.

Gartner Inc. Information Security Strategies analyst Arabella Hallawell said that, even though many companies have issued privacy policies and appointed privacy officers, much remains to be done in developing business and IT strategies that address privacy issues.

IBM recently announced an Enterprise Privacy Architecture (EPA), based on its Tivoli Systems teams' Tivoli SecureWay Privacy Manager and Policy Director tools and on privacy rights management technologies licensed from Zero-Knowledge Systems Inc.

Mike Bilger, global practice leader of security and privacy at IBM Global Services, said of the new EPA, "It affords organizations a framework for efficiently embedding their privacy requirements into every level of the business, while integrating with existing e-business initiatives."

Harriet Pearson, IBM's chief privacy officer, said that EPA solutions and services will help enterprises protect not only customer data but also employee and partner data, another area of concern for legislators and organizations.

Ernst & Young's (EY) Privacy Assurance and Advisory Services practice recently formed an alliance with IDcide Inc., a vendor specializing in automated Web privacy verification tools. EY will update its online privacy assurance methodology with diagnostic tools from IDcide's Privacy Wall Site Analyzer, which monitors Web sites for compliance with company privacy policies and applicable laws.

"Online privacy protection and monitoring capabilities are key to building and strengthening consumer confidence and trust regarding transactions initiated over the Internet," said Jerry DeVault, national director for Ernst & Young's Innovative Assurance Solutions.

— Claudia Willen

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