LEGAL AND ETHICAL ISSUES OF INTERNET USAGEWhen purchase confirmation occurs, this can then be attributed back to the original source,
e.g. Google Adwords and the particular referrer.
Owing to the large investments made now in pay-per-click marketing and affiliate marketing by
many companies, this is the area of most concern for marketers since the tracking can become
inaccurate. However, a sale should still occur even if the cookies are blocked or deleted, so the
main consequence is that the ROI (return on investment) of online advertising or pay-per-click
marketing may look lower than expected. In affiliate marketing, this phenomenon may benefit
the marketer in that payment may not need to be made to the third party if a cookie has been
deleted (or blocked) between the time of original clickthrough and sale.Privacy issues with cookie use
The problem for Internet marketers is that, despite these important applications, blocking by
browsers, such as Internet Explorer, or security software and deletion by users has increased
dramatically. In 2005 Jupiter Research claimed that 39% of online users may be deleting
cookies from their primary computer monthly, although this is debated.
Many distrust cookies since they indicate a ‘big brother’ is monitoring your actions. Others fear
that their personal details or credit card details may be accessed by other web sites. This is
very unlikely since all the cookies contain is a short identifier or number that is used to link you
to your record in a database. Anyone who found the cookie wouldn’t be able to log on to the
database without your password. Cookies do not contain passwords, credit card information
or any personal details as many people seem to think. These are held on the site servers,
protected by firewalls and usernames and passwords. In most cases, the worst that someone
can do who gets access to your cookies is to find out which sites you have been visiting.
It is possible to block cookies if the user finds out how to block them, but this is not straight-
forward and many customers either do not know or do not mind that their privacy may be
infringed. In 2003 an interesting survey on the perception and behaviour with regards to
cookies was conducted on cookie use in the UK (RedEye, 2003). Of the 1000 respondents:
50% had used more than one computer in the last three months;
70% said that their computer was used by more than one person;
94% said they either accepted cookies or did not know what they were, although 20% said
they only accepted session cookies;
71% were aware of cookies and accepted them. Of these only 18% did not know how to
delete cookies, and 55% of them were deleting them on a monthly basis;
89% knew what cookies were and how to delete them and said that they had deleted them
once in the last three months.Legal constraints on cookies
The new PECR law limits the use of cookies. It states:
a person shall notuse an electronic communications network to store information, or to
gain access toinformation stored, in the terminal equipment of a subscriber or user unless
the following requirements are met.
The requirements are:
(a) the user is provided with clear and comprehensive information about the purposes of
the storageof, or access to, that information; and
(b) is given the opportunity to refuse the storageof or access to that information.
(a)suggests that it is important that there is a clear privacy statementand (b) suggests
that opt-in to cookies is required. In other words, on the first visit to the site, a box would
have to be ticked to agree to the use of cookies. This was thought by many commentators
to be a curious provision since this facility is already available in the web browser. A further
Privacy statement
Information on a web
site explaining how and
why individuals’ data
are collected,
processed and stored.