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Last Updated: Thursday, 7 June 2007, 09:00 GMT 10:00 UK
Good privacy pays for web stores
Mouse and keyboard, Eyewire
Many web shoppers worry about what happens to personal data
People will pay more for goods if a website does a good job of protecting their privacy, a study shows.

The Carnegie Mellon study looked at what shoppers do when they are told what sites do with personal data.

It suggests that shoppers will pay a premium equal to about $0.60 (30p) on goods worth $15 (7) if they are reassured about privacy.

The study was used to evaluate a tool that aims to give web users clearer information about privacy policies.

Poor choices

Before now, many studies have shown that many web users fear that the information they must surrender to buy goods and services online will be abused by some shops.

At the least, users fear their contact details will be passed on to marketing firms without their permission.

Many also worry about what is being done with credit card or bank details they hand over to make purchases.

Despite these fears many shoppers often made poor choices by surrendering valuable personal information if they thought they were getting low prices, said Lorrie Cranor, director of the Usable Privacy and Security Lab at Carnegie Mellon and lead author on the study.

"Our suspicion was that people care about their privacy, but that it's often difficult for them to get information about a website's privacy policies," Ms Cranor said.

The small study of 72 shoppers looked at how their behaviour changed if they were armed with a tool which showed how good a site's privacy policy was.

The study used a tool called the Platform for Privacy Preferences (P3P) developed by the World Wide Web Consortium to make it easier for the average net user to assess privacy policies.

The P3P tool tries to give consistent information about privacy policies across sites. However, it is currently only used by about 20% of e-commerce sites.

The results of the study suggest that people will turn toward sites with "high privacy" ratings and that they would pay slightly extra for that reassurance.

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