How Safe Are the Harbors?

Abstract

With the growth of e-commerce has come the need for businesses to provide protection of personal, private data collected from internet users and consumers. The United States has favored a policy of industry self-regulation, while the European Union (EU) has responded to its consumer demands for privacy protection regulations and enforcement. Faced with the critical need for a middle ground, the US has proposed “Safe Harbor Privacy Principles” as a means of compromise with the EU. This article explores the market context of the Safe Harbor Principles, the European reaction, and the probable impact on businesses.     

Experiential Engagement and Active vs. Passive Behavior in Mobile Location-based Social Networks: The Moderating Role of Privacy

The study aims to understand how social media and mobile change customer experiences and influence the online active behavior. We explore how leveraging differently on experiences that the users live online helps to increase experiential engagement and mitigate the negative influence of privacy concern on the active use of location-based social networking applications. We conceptualize experiential engagement as a second-order construct that is manifested in two first-order “experience” constructs (Personal Engagement and Social Interactive Engagement). We theorize that our engagement constructs are causally related to consumer active and passive use of a mobile location-based social network and we test (n = 379) the moderating role of privacy concern on this relation in EU and the US. Findings show that Personal Engagement plays an important role influencing active usage when users are more concerned with privacy issues. Social Interactive Engagement shows a significant effect on passive usage meaning that the more people experience a deep sense of community the more they are interested in reading other comments or collecting information. Managerial implications are discussed.     

The Privacy Paradox: Personal Information Disclosure Intentions versus Behaviors

Impelled by the development of technologies that facilitate collection, distribution, storage, and manipulation of personal consumer information, privacy has become a “hot” topic for policy makers. Commercial interests seek to maximize and then leverage the value of consumer information, while, at the same time, consumers voice concerns that their rights and ability to control their personal information in the marketplace are being violated. However, despite the complaints, it appears that consumers freely provide personal data. This research explores what we call the “privacy paradox” or the relationship between individuals’ intentions to disclose personal information and their actual personal information disclosure behaviors.     

Green intentions under the blue flag: Exploring differences in EU consumers’ willingness to pay more for environmentally‐friendly products

Recent research on consumer social responsibility highlights the need to examine psychological drivers of environmentally‐friendly consumption choices in a global context. This article investigates consumers’ willingness to pay (WTP) more for environmentally‐friendly products across 28 European Union (EU) countries, using a sample of 21,514 consumers. A multigroup structural equation modeling analysis reveals significantly different patterns and relationships, in how (a) subjective knowledge about the product's environmental impact, (b) environmental product attitudes, and (c) the perceived importance of the products’ environmental impact influence consumers’ WTP more for environmentally‐friendly products across countries. The hypothesized model predicts WTP for 20 out of 28 countries and the findings show that a “one‐size‐fits‐all” approach is inadequate in capturing the heterogeneity of EU consumers. Hosfstede's cultural dimensions of uncertainty tolerance and individualism explain differences in WTP for environmentally‐friendly products across EU countries. Business, marketing communications, and policy making implications are discussed.     

THE IMPACT OF ORDER FULFILLMENT SERVICE ON RETAILER MERCHANDISING DECISIONS IN THE CONSUMER DURABLES INDUSTRY

Historically, manufacturers held the upper hand in consumer goods supply chain relationships. There has been a pervasive shift of power to retailers over the past 20 years, however, ushering in an era of waning consumer loyalty to manufacturers' brands and increasing loyalty to retailers. While there is extensive research focusing on the manufacturer‐consumer relationship, retailers' increased ability to influence consumer purchases suggests that manufacturers should understand not only consumer perceptions of delivery service, but also retailer perceptions. We incorporate social network theory to examine the manufacturer‐retailer‐consumer linkages in the consumer durables industry, with the emphasis on the retailer in the role of the “broker” (Burt 1992). Specifically, we examine whether retailer perceptions of a manufacturer's order fulfillment service (OFS) positively impacts retailer perceptions of the manufacturer's brand, the importance of the product, and the likelihood of the retailers' salespeople to recommend the product to consumers. The research bridges OFS and retailer purchase behavior in a consumer durables industry characterized by high levels of consumer involvement, brand presence, and personal selling.     

Why Do We Read On‐Pack Nutrition Information so Differently? A Typology of Reading Heuristics Based on Food Consumption Goals

While prior research has extensively studied nutrition labeling use and consumer errors of judgment in the nutrition evaluation process, less attention has been paid to the consumer motivations that simplify the reading of on‐pack nutrition information. To address this gap, this study examines how food consumption goals affect consumer reading of this information. On the basis of a qualitative study, eight food consumption goals have been identified and classified into four types of motivations which impact reading behaviors: “Food Optimization,” “Food Regulation,” “Food Gratification,” and “Food as Mere Necessity.” From this typology, we derive eight on‐pack nutrition information reading heuristics as well as specific inference biases resulting from these simplifying reading strategies. This research also provides guidelines for policymakers so that nutritional messages given to consumers will be more targeted in order to promote better reading of on‐pack nutrition information at the point of sales.     

Internet and consumer privacy: Considering the FTC’s “do not track” proposal

The digital economy relies on the collection of personal data on an ever-increasing scale. Regulations have to be found which can provide an optimal balance between consumers’ interest in privacy and the benefits from innovations that rely on the largely invisible collection, retention and sharing of consumer data. The following article discusses current US reform proposals and their relevance for the ongoing debate in Europe.     

Defining the Consumer Interest: Challenges for Advocates

From its birth, The Journal of Consumer Affairs has provided a forum for government officials, consumer activists, and academics to discuss the definition of the consumer interest and how best to pursue it. In the inaugural issue of JCA, published in the summer of 1967, three of the first four articles were titled “The View from Washington” (by Deputy Assistant Secretary of Labor David Swankin), “Is It Time to Re‐Evaluate the Consumer Protection Activities of the Federal Government?” (by Consumers Union president Colston E. Warne), and “The Consumer Interest—the Real Issue” (by Professor of Marketing Robert D. Schooler). When JCA began publication in 1967, a few landmark pieces of consumer legislation had already been passed concerning pharmaceuticals, cigarettes, and motor vehicles, but the heyday of the consumer movement—and consumer research—was just beginning. In his article, Warne wrote: “The time has come, I think, for consumers and consumer movements to face some highly unpleasant problems” (p. 24). Schooler chastised the federal government for being “misdirected toward real but secondary issues” (p. 40). Swankin called for an organization and a professional journal capable of creating “an intellectual climate in which the phrases ‘consumer interest,’‘consumer economics,’ and, yes, ‘consumer information’ can be developed and can flourish” (pp. 9–10). Nearly forty years later, and long after the zenith of the U.S. consumer movement, we still face a host of consumer problems and a federal government disinclined to address them. We do, however, have a respected journal in whose pages the consumer interest and consumer policy can be examined. On April 25, 2005, the University of Utah hosted a symposium on consumer policy in honor of the retirement of Dr. John R. Burton. John, who established the consumer studies program at the University of Utah, has devoted his career to teaching, research, and service that advance the consumer interest. Seven nationally renowned speakers, including professors Monroe Friedman, Loren Geistfeld, Jeanne Hogarth, Jean Lown, and Ivan Preston, presented papers pertaining to the consumer interest. Two of the seven papers are reproduced here. The first is by Stephen Brobeck, long‐time executive director of the Consumer Federation of America (CFA) and the editor of The Encyclopedia of the Consumer Movement. Dr. Brobeck's article examines how a major consumer advocacy organization like CFA decides what public policy positions are in the consumer interest. The article applies a general framework to the specific issue of automobile fuel economy standards. In the companion piece to this article, Michael Burton, an assistant professor of political science at Ohio University and the son of the symposium's honoree, draws on his experience as a congressional aide and vice presidential staff member to describe and defend the art of compromise as it applies to consumer politics. – Robert N. Mayer, University of Utah     

The ethical consequences of “going dark”

The adoption of hyper‐strong encryption for mobile devices, such as the iPhone, has reignited debate about the need for exceptional access and the relative priority of privacy rights. Many software programs and algorithms are not neutral but “value‐laden,” and unbreakable encryption software virtually absolutizes the right to privacy, though it has justified limits in ethics and law. High tech companies have resisted any exceptional access solutions and generally opposed cooperation with law enforcement agencies for the sake of protecting the data of their customers. We argue that this strategy is ethically flawed based on the priority of the right to physical security over the right to privacy along with the need to ensure peace and order in the name of the common good. To support this line of reasoning we amplify the undifferentiated conception of the common good presented in the literature and sketch out the grounds for limiting rights based on the need to conform to the just requirements of the public order in a democratic society. The discussion culminates in a proposal for an exceptional access scheme that has the potential to minimize risk to innocent users.     

Editorial

The relationship marketing paradigm is gaining increasing credence in consumer markets. Marketers need to get close to their customers to establish exchange relationships, and this “intimacy” is achieved using database technology and direct marketing communications. However, in implementing relationship marketing in this way, the potential exists for the use of technology to result in invasions of individual consumer privacy. The literature on relationship marketing and privacy are reviewed, and the findings of six exploratory focus group discussions, conducted in the UK, are presented. The study suggests that what some consumers define as “intrusion” is similar to what has been called “intimacy” by marketers. Nine propositions are presented which reflect the implications of current approaches to relationship marketing in consumer markets. In particular, the integral elements of meaningful relationships are absent or inhibited as a result of consumer concerns over intrusions of their privacy. Thus, marketers need to adapt their attitudes, behaviours, and processes in order to accommodate the participation of the consumer in the relationship. The implications for marketers are identified, and directions are offered for future research.     

Promoting Educated Consumer Choices. Has EU Food Information Legislation Finally Matured?

Contemporary EU food information legislation combines and balances two main consumer interests, i.e., a consumer right to information and the freedom of choice, into one single protective standard: informed choice. Although the recent legislative measures quite openly establish a link between informed choice and the rather abstract societal norm of “what is good for the consumer,” this does not justify the conclusion that food information legislation has become overly meddlesome in relation to EU consumers and their choice of food. Rather, there has been a gradual maturing of the EU legislator’s perception of its task from the mere provision of food information to ensuring educated consumer choices. This development is a logical and necessary consequence of the growing complexity of food choices.     

Privacy Notice for Dummies? Towards European Guidelines on How to Give “Clear and Comprehensive Information” on the Cookies’ Use in Order to Protect the Internet Users’ Right to Online Privacy

The reviewed ePrivacy Directive aims at ensuring internet users’ online privacy by requiring users to give informed consent to the gathering, storing, and processing of their data by internet service providers, e.g., through the cookies’ use. However, it is hardly possible to talk about an “informed” consent if internet users are not aware of cookies or do not understand when and how they work. Currently, European rules require internet service providers to provide internet users with a “clear and comprehensive” information on the cookies’ use without further specifying what kind of disclosure would be seen as compliant therewith. This paper assesses the need for harmonized European guidelines on transparent and readable disclosure on the cookies’ use and suggests the way forward based on comparative legal research and findings from consumer behaviour research.     

Information Sensitivity Typology: Mapping the Degree and Type of Risk Consumers Perceive in Personal Data Sharing

Surveys show significant public concern regarding information privacy. To better understand how consumer concerns vary by type of personal data, the authors created a typology of information types based on perceived associated risks. In a national consumer survey, 52 information types were analyzed along four perceived risk categories (physical, psychological, monetary, and social), consumers' overall sensitivity regarding the information, and their willingness to provide it. This resulted in six highly distinctive clusters—Basic Demographics, Personal Preferences, Contact Information, Community Interaction, Financial Information, and Secure Identifiers—organized around similarities in perceived risk profile. Additionally, consumer segmentation analysis shows rank order of cluster risk perceptions to be stable, even when perceived magnitude and overall risk propensities change by segment. This research advances the conversation from an outdated PII/non‐PII framework to a more meaningful, consumer‐based understanding of the perceived risks associated with different types of personal information.     

Can Bonus Packs Mislead Consumers? A Demonstration of How Behavioural Consumer Research Can Inform Unfair Commercial Practices Law on the Example of the ECJ’s Mars Judgement

The use of psychological findings in EU internal market regulation has gained interest, particularly in the area of unfair commercial practices. This study investigates consumer perceptions of bonus packs containing an oversized indication of the “extra” volume in the package, such as in the Mars case. The Mars case serves as a standard reference in EU unfair commercial practices law which is used as a benchmark to determine the “average consumer.” Our study demonstrates how an experiment can be set up to provide empirically based insights on whether a practice is “deceptive.” Results of our experiment show that consumers overestimate the extra volume when confronted with an oversized indication compared to control conditions, which is first empirical evidence that this practice is potentially deceptive.     

Suchmaschinen unter der Lupe: Informationsherrschaft und ihre Schranken

Informational power by search engines should be analysed from different perspectives. On the one hand, unlimited access to personal data can be in conflict with the interests of individuals whose data can be accessed. These interests are part of a right to privacy, including a “right to be forgotten,” which, however, must be balanced against the public interest in disclosure of information. Balancing these conflicting interests is a difficult task — a task that lies with the search engines themselves. On the other hand, firms and individuals may have an interest in their information to be found, in particular (but not only) for commercial purposes. Suppressing or “downgrading” this information as displayed to users may significantly reduce visibility. In light of these interests, it has been proposed to oblige search engines to implement “search neutrality“; i.e., that they have to present search results in an unbiased way. In this article, we take a clear position against ex ante regulation. Instead, competition law provides a sufficient framework, to protect against the abuse of “informational” market power. We sketch a new approach that may allow competition law to be applied more quickly in dynamic markets such as internet search markets.     

The Affordability of Energy: How Much Protection for the Vulnerable Consumers?

Affordability is a new “alien” concept penetrating the field of contract and consumer law as one of the obligations related to the provision of “universal services” or “public service” in the context of services of general economic interest. Affordability becomes an important element of the European social model (using Scharf’s terminology; Scharf, J Common Mark Stud 40:645–670, 2002) and its constitutional dimension will be confirmed by the Treaty of Lisbon and the Charter of Fundamental Rights of the European Union (EU). The major European Commission policy tool for ensuring the Affordability of Energy Supply is, on the one hand, functioning competition, which should bring about reasonable prices in general, and on the other hand, regulation targeted at so-called vulnerable consumers. First tested in the UK, it was later spread mainly by the requirements of the Second Energy Package in other Member States (MS). The Third Energy Package (to be implemented by March 2011) further develops this idea and clarifies the set of obligations that the protection of consumers and ensuring the Affordability of Energy Supply require in the understanding of the EU legislator. One could speculate to what extent this is a reaction to the fact that some MS and, in particular, the new MS did not implement the consumer protection requirements of the Second Energy Package, but rather opted for very different regulatory strategies. This paper will examine different regulatory strategies employed in four MS (the UK, France, the Czech Republic, and Slovakia), with special focus on the situation in the two new MS, in order to respond to the question as to whether these different regulatory strategies provide what is promised, i.e., affordable energy for all.     

Consumer Brand Hate: Steam rolling whatever I see

This study aims to investigate negative consumer‐brand relationships by developing a “Brand Hate” concept. A hierarchical Brand Hate model is theoretically discussed in light of the psychology and consumer behavior literatures. In Study‐I the Brand Hate concept was tested with two different types of consumer brand haters, true haters, and regular haters. The study found that in the study's proposed multidimensional Brand Hate hierarchy true haters display “Boiling Brand Hate” while regular haters reveal “Seething Brand Hate.” Two additional studies were developed to examine the relationship between consumer personality traits and Brand Hate, exploring which types of consumers are more prone to feel hatred toward targeted brands. Study‐II's findings revealed a relationship between consumers who are high in personality traits of “conscientiousness” and those who Brand Hate. Study‐III's findings indicated that “self‐confident” and “competitive” consumers might also be more prone to feel hatred toward those brands that perform poorly and unethically.     

Financial Vulnerability,Financial Literacy,and the Use of Digital Payment Technologies

The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n?=?2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.

     

Anti‐dumping: A Growing Problem in International Trade

This paper discusses the issue of anti‐dumping (AD) proliferation. AD is used more frequently, by more countries, and against more products than ever in its history. I review AD filing patterns with an emphasis on the scope of countries and industries seeking protection. Recent trends suggest that the widespread embrace of AD protection makes the prospect for AD reform increasingly unlikely. AD is no longer being used solely by high‐income developed countries. It is increasingly being used by middle‐income and even lower‐income countries. New users have chosen to use AD very intensively. Per dollar of imports the new users have filed AD cases up to 15–20 times more frequently than the traditional AD users such as the US and EU. The evolving set of AD users complicates AD negotiations. In the near term, strong opposition by the US and EU makes reform a highly unlikely outcome. In the longer run, rising use of AD against the US and EU could conceivably weaken their support for AD; yet, the same trends that might finally cause the US and EU to realise AD is a failed policy will likely make reform impossible.     

Between Neo-Liberalism and the Social Market: Approaches to Debt Adjustment and Consumer Insolvency in the EU

Many EU countries introduced debt adjustment systems as a response to the growth of over-indebtedness since the 1980s. These systems, originally introduced in many countries as crisis measures, have now become normalized, metamorphosing through a continuing learning process into a combination of debt adjustment and insolvency relief through a discharge of debt, sometimes after only 1?year, but often after a debt repayment plan over a period of 3–7?years. Since the early 2000s, new Member States of the EU have also introduced insolvency systems, often based on models from the old states. This paper examines experience in European consumer insolvency systems, based on the modest empirical studies of existing systems, primarily England, France and Germany. It discusses the reasons for the use of consumer insolvency, and the limited data on the characteristics of users, charts distinct national approaches and outlines common themes and objectives for consumer insolvency in the context of EU measures to create an integrated credit market in a “competitive social market. To economy”. It concludes by underlining the absence of systematic social science knowledge on existing systems and outlines areas for further research.