U.S. Internet users are often unsuspecting of what goes on behind the scenes of their favorite Web sites. According to data from the Annenberg Public Policy Center of the University of Pennsylvania, 57 percent of U.S. Internet users incorrectly believe that when a Web site has a privacy policy, it will not share their personal information with other sites or companies.

This misconception, among others, underscores the lack of education Internet users have about data flows, what the study calls, "...the invisible, cutting edge techniques whereby online organizations extract, manipulate, append, profile and share information about people online are part and parcel of how Web sites operate."

While 59 percent know that Web sites collect information about them even if they don't register, they don't understand that data flows behind their screens invisibly connect seemingly unrelated bits about them. When presented with a common version of the way sites track, extract, and share information to make money from advertising, 85 percent of adults who go online at home said they would not accept it on even a valued site.

"Even if people have a sense that sites track them and collect individual bits of information, they simply don't fathom how those bits can be used," said Joseph Turow, Robert Lewis Shayon Professor of Communication at the Annenberg School for Communication of the University of Pennsylvania.

Despite strong concerns about online information privacy, 64 percent say they have never searched for information about how to protect their information on the Web, and 40 percent say that they know "almost nothing" about stopping sites from collecting information about them. Just over one-quarter (26 percent) say they know just "a little," and only 9 percent of American adults who use the Internet at home say they know a lot.

The study, conducted through 1,200 telephone interviews during the months of February and March 2003, revealed that 95 percent agreed or agreed strongly that they should have the legal right to know everything Web sites know about them.

Rather than investigate individual site policies, most respondents believed that legislature would offer protective measures. The overwhelming majority (86 percent) believe that laws that force Web sites policies to adopt standardized privacy policies will be effective in helping them protect their information, and only 13 percent believe that the government will help them protect personal information online while not disclosing personal information without permission.

Most were optimistic about government intervention, as 84 percent felt that a law that would give them the right to control how Web sites use and share the information would be "very" or "somewhat" effective.

Progress on privacy issues has been slow, as the results of the 2003 Online Customer Respect study of the 100 largest U.S. companies revealed that 10 percent still don't have privacy policies posted — an unchanged percentage from the 2002 study. Also, while 71 percent of the analyzed sites used cookies [define], only 42 percent explain procedures for disabling cookies.

Using the Customer Respect Index, the study is meant to bring a qualitative and quantitative in-depth analysis and independent measure of a customer's online experience when interacting with companies via the Internet. The highest number assigned to the index is 10.0.

Average Privacy Index by Industry
Online Industry 2003 2002
Media, Entertainment, Publishing 8.3 8.7
Computer Hardware, Software, Services 8.2 8.2
Retail & Specialty Retail 8.1 7.9
Telecommunications 8.1 7.7
Energy 7.8 6.6
Financial Services 7.7 6.5
Aerospace 7.5 6.5
Chemicals, Pharmaceuticals 7.4 7.6
Automotive 7.1 6.6
Miscellaneous 7.1 6.4
Food, Beverage, Tobacco 7.0 6.9
Forest & Paper Products 7.0 8.1
Insurance 7.0 7.5
Healthcare 6.6 6.6
Source: The Customer Respect Index

The Customer Respect study also measures a site's "transparency" — the ability for visitors to clearly understand the privacy policy and how personal data is being treated. The average transparency score across all industries was 7.5 — the second best across all six criteria.

Average Transparency Index by Industry
Online Industry 2003 2002
Media, Entertainment, Publishing 9.2 8.3
Computer Hardware, Software, Services 8.5 8.8
Retail & Specialty Retail 8.4 8.7
Telecommunications 8.3 8.4
Financial Services 7.8 6.7
Energy 7.7 6.3
Insurance 7.6 7.6
Miscellaneous 7.4 6.8
Forest & Paper Products 7.2 9.5
Aerospace 6.9 5.3
Chemicals, Pharmaceuticals 6.9 7.5
Automotive 6.6 6.5
Food, Beverage, Tobacco 6.3 6.7
Healthcare 5.6 6.3
Source: The Customer Respect Index