ASSOCIATION FOR CONSUMER RESEARCH
Labovitz School of Business & Economics, University of Minnesota Duluth, 11 E. Superior Street, Suite 210, Duluth, MN 55802
International Differences in Information Privacy Concern: Implications For the Globalization of Electronic Commerce Steven Bellman, University of Western Australia
Eric J. Johnson, Columbia University
Stephen J. Kobrin, University of Pennsylvania Gerald L. Lohse, Accenture
EXTENDED ABSTRACT - Differences in information privacy concern in relation to the Internet have been found in national probability samples of consumers from the U.S., the UK, and Germany (IBM 1999). International differences in regulation of information privacy (e.g., the European Data Privacy Directive: EU 1995) are supposed to reflect these concerns. In this study, we examine three possible explanations for these different forms of Internet regulation: (1) these differences reflect and are related to differences in cultural values (Hofstede 1980, 1991; Milberg, Burke, Smith, and Kallman 1995); (2) these differences reflect differences in Internet experience and/or familiarity with Web privacy practices; and (3) they reflect differences in the desires of political institutions without reflecting underlying differences in privacy preferences. We surveyed Internet-using consumers from 38 countries and controlled for differences in demographics (Poortinga and Malpass 1986) to isolate the effects of cultural values, government regulation, Internet experience and knowledge of Web privacy practices, on concern for information privacy on the Net.
We find support for (1), that cultural values are associated with differences in privacy preferences, which in turn are reflected in government regulation.
[to cite]:
Steven Bellman, Eric J. Johnson, Stephen J. Kobrin, and Gerald L. Lohse (2004) ,"International Differences in Information Privacy Concern: Implications For the Globalization of Electronic Commerce", in NA - Advances in Consumer Research Volume 31, eds. Barbara E. Kahn and Mary Frances Luce, Valdosta, GA : Association for Consumer Research, Pages: 362-363.
[url]:
http://www.acrwebsite.org/volumes/8918/volumes/v31/NA-31
[copyright notice]:
This work is copyrighted by The Association for Consumer Research. For permission to copy or use this work in whole or in
part, please contact the Copyright Clearance Center at http://www.copyright.com/.
362 Advances in Consumer Research Volume 31, © 2004
International Differences in Information Privacy Concern: Implications for the Globalization of Electronic Commerce
Steven Bellman, University of Western Australia Eric J. Johnson, Columbia University Stephen J. Kobrin, University of Pennsylvania
Gerald L. Lohse, Accenture
EXTENDED ABSTRACT
Differences in information privacy concern in relation to the Internet have been found in national probability samples of con- sumers from the U.S., the UK, and Germany (IBM 1999). Interna- tional differences in regulation of information privacy (e.g., the European Data Privacy Directive: EU 1995) are supposed to reflect these concerns. In this study, we examine three possible explana- tions for these different forms of Internet regulation: (1) these differences reflect and are related to differences in cultural values (Hofstede 1980, 1991; Milberg, Burke, Smith, and Kallman 1995);
(2) these differences reflect differences in Internet experience and/
or familiarity with Web privacy practices; and (3) they reflect differences in the desires of political institutions without reflecting underlying differences in privacy preferences. We surveyed Internet- using consumers from 38 countries and controlled for differences in demographics (Poortinga and Malpass 1986) to isolate the effects of cultural values, government regulation, Internet experience and knowledge of Web privacy practices, on concern for information privacy on the Net. We find support for (1), that cultural values are associated with differences in privacy preferences, which in turn are reflected in government regulation.
Our study focuses on information privacy, which Westin (1967) defined as the amount of control that individuals can exert over the type of information, and the extent of that information, revealed to others. Government regulation of information privacy in many countries is based on four core fair information practices:
notice of collection practices, choice at least in the use of collected data, access to collected data, and security and integrity of data (e.g., FTC 1998). Smith, Milberg, and Burke (1996) defined four similar dimensions of Concern for Information Privacy (CFIP).
Collection reflects the growing impression that companies are collecting unreasonable amounts of personal data. Unauthorized Secondary Use refers to the utilisation of a consumer’s information without permission. Improper Access reflects the disclosure of personal information to unauthorized individuals. Finally, the Er- rors dimension describes concerns about inaccurate information in databases, either by accident or design.
Milberg et al. (2000) found that CFIP increased with higher levels of three of Hofstede’s (1980, 1991) cultural values dimen- sions, Power Distance Index (PDI), Individualism (IND), and Masculinity (MAS), but decreased with higher levels of Uncer- tainty Avoidance Index (UAI). Milberg et al. (2000) also found a significant and positive relationship between government involve- ment in the regulation of privacy, and CFIP, and a positive relation- ship between existing government involvement in regulation and preference for more government regulation. We intended to repli- cate these findings using a sample of consumers. We also hypoth- esized that familiarity with Web privacy practices may reduce CFIP. For example, Culnan (1995) found that consumers who were aware of name removal procedures for “opting out” of direct mailing lists were less concerned about information privacy. The need for more consumer education is a typical recommendation in the conclusion of academic studies (e.g., Culnan 1995; Whitman, Perez, and Beise 2001). Recently, industry groups in the U.S. such as TRUSTe (Benassi 1999) have been spending millions of dollars
on education programs to try to reduce consumers’ privacy con- cerns and demands for increased government regulation.
We recruited 534 Internet-using consumers from 38 countries.
Respondents completed an online survey in English consisting of the Smith et al. (1996) CFIP scale (adapted for CFIP at Web sites), two scenarios that elicited CFIP in a relatively lower-sensitivity context (purchases recorded on a bonus card at a physical store) versus a relatively higher-sensitivity context (medical and financial information collected by a Web site), an item that measured concern about the security of online transactions, and six items that formed an index of knowledge about Web privacy practices (e.g., TRUSTe,
“cookies”). Cultural values were measured using Hofstede’s (1980, 1991) country scores for the same four dimensions used by Milberg et al. (2000), for replication purposes, although we acknowledge concerns about Hofstede’s imposition of a westernized scale on all cultures (e.g., Chinese Culture Connection 1987). Government involvement in regulation was classified into five categories devel- oped by Milberg et al. (1995) using Privacy International’s (1998) survey of international privacy laws. MANCOVA was used to test whether the hypothesized covariates–cultural values, government regulation, and Web privacy knowledge–significantly reduced differences in CFIP across six regions: the U.S., Canada, the United Kingdom and the Republic of Ireland, other countries from Conti- nental Europe that were current members of the EU, Australia and New Zealand, and Other Countries. The MANCOVA also con- trolled for individual differences in demographics and Internet experience.
Respondents from countries with relatively higher overall cultural values scores indicated significantly lower CFIP. This effect was in the opposite direction to the finding of Milberg et al.
(2000). Follow-up analyses showed that this effect was due mainly to the IND dimension of cultural values, and was consistent with previous findings that people from high IND countries (such as the U.S.) are less concerned about disclosing private information than people from low IND countries (e.g., Ting-Toomey 1991). Repli- cating Milberg et al. (2000) and Milberg et al. (1995), respondents from countries with higher levels of government regulation were more concerned about Errors, but less concerned about the security of transactions on the Net, which has generally been the focus of government regulation. Also, consumers from countries with al- ready high levels of government regulation of information privacy were more likely to favor the introduction of even stronger regula- tion. The effect of Web privacy knowledge was not significant, which suggests that consumer education may not decrease CFIP, at least for Internet consumers with high levels of education, as our sample had. Internet experience reduced CFIP.
There were significant residual differences between the six regions. Respondents from every other region were more in favor of government regulation than U.S. consumers. Compared to respondents from the U.S., respondents from the UK and Ireland expressed significantly greater CFIP overall. These results suggest that managers should select a range of options, at the regional level if not the country level, from which customers could personalize their privacy preferences.
Advances in Consumer Research (Volume 31) / 363 References
Benassi, Paola (1999), “TRUSTe: An Online Privacy Seal Program,” Communications of the ACM, 42 (February), 56- 59.
Chinese Culture Connection (1987), “Chinese Values and the Search for Culture-Free Dimensions of Culture,” Journal of Cross-Cultural Psychology, 18 (June), 143-164.
Culnan, Mary J. (1995), “Consumer Awareness of Name Removal Procedures: Implications for Direct Marketing,”
Journal of Direct Marketing, 9 (Spring), 10-19.
EU [European Union] (1995), “Directive 95/46/EC of the European Parliament and of the Council of 24, October, 1995, on the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data,” http://europa.eu.int/eur-lex/en/lif/reg/
en_register_1940.html.
FTC [Federal Trade Commission] (1998), Privacy Online: A Report to Congress, Washington, DC: Federal Trade Commission, June (available at http://www.ftc.gov/reports/
privacy3/index.htm).
Hofstede, Geert (1980), Culture’s Consequences: International Differences in Work-Related Values, Beverly Hills, CA:
Sage.
(1991), Cultures and Organizations: Software of the Mind, New York: McGraw-Hill.
IBM (1999), IBM Multi-National Consumer Privacy Survey, Somers, NY: IBM Global Services, http://www.ibm.com/
services/files/privacy_survey_oct991.pdf.
Milberg, Sandra J., H. Jeff Smith, and Sandra J. Burke (2000),
“Information Privacy: Corporate Management and National Regulation,” Organization Science, 11 (January-February), 35-57.
, Sandra J. Burke, H. Jeff Smith, and Ernest A. Kallman (1995), “Values, Personal Information Privacy, and Regula- tory Approaches,” Communications of the ACM, 38 (December), 65-74.
Poortinga, Ype H., and Roy S. Malpass (1986), “Making Inferences from Cross-Cultural Data,” in Field Methods in Cross-Cultural Research, ed. Walter J. Lonner, and John W.
Berry, Beverly Hills, CA: Sage, 17-46.
Privacy International (1998), “Privacy and Human Rights: An International Survey of Privacy Laws and Practice,” http://
www.privacyinternational.org/survey/phr98/.
Smith, H. Jeff, Sandra J. Milberg, and Sandra J. Burke (1996),
“Information Privacy: Measuring Individuals’ Concerns about Organizational Practices,” MIS Quarterly, 20 (June), 167-196.
Ting-Toomey, Stella (1991), “Intimacy Expressions in Three Cultures: France, Japan, and the United States,” International Journal of Intercultural Relations, 15 (1), 29-46.
Westin, Alan F. (1967), Privacy and Freedom, New York:
Athenaeum Publishers.
Whitman, Michael E., Jorge Perez, and Catherine Beise (2001),
“A Study of User Attitudes Toward Persistent Cookies,”
Journal of Computer Information Systems, 41 (Spring), 1-7.
