Brian Tretick's business is helping companies mind theirs. Tretick, a principal at Ernst & Young, is a privacy consultant. On a recent October day, he handled three calls from clients asking for guidance on online privacy.
His clientele includes large companies with multiple Web holdings and New Economy upstarts launching Internet businesses. To both sets of companies, Tretick provides advisory and assurance services. That means helping them develop privacy blueprints and making sure any resulting policies comply with applicable laws and industry standards.
Privacy has become a big business for E&Y, which has been training a growing cadre of "privacy-enabled" consultants. This past summer, E&Y consultants from Canada, France, Germany and other countries visited the United States to be schooled in data privacy and the company's privacy-engagement methodology. The ranks of E&Y's privacy practitioners have doubled over the last 12 months.
"The market is just tremendously hot," says Tretick.
What is generating all of that heat? Data-mining products and other Web "personalization" tools let online sellers create customer profiles and craft marketing strategies accordingly. But such efforts raise sticky privacy-related questions: What type of information is being collected? How will it be used? And will it be shared withââ,¬"or sold toââ,¬"third parties?
Those kinds of questions are at the heart of recent privacy controversies. Take, for example, the Toysmart.com case, in which the e-tailer first promised not to sell customer data, but then contemplated doing precisely that as part of the now-bankrupt company's liquidation process. Amazon.com also got slammed this year when it disclosed that customer information may be considered an asset in the event of a sale.
Amid such events, the online industry is facing a "consumer backlash," based on the perception that Web sites are misusing customer information, asserts Eric Gertler, CEO of Privista Inc., a privacy-protection software company. The problem goes beyond privacy, he says. "I would argue that the industry has a much broader consumer confidence problem," notes Gertler.
Jupiter Research numbers back up his claims. The market researcher projects that privacy concerns could result in a revenue loss for online sellers of about US$3 billion this year. That loss could deepen to $18 billion by 2002, Jupiter projects. Add to that the potential for sweeping federal online legislation next year, and Web players have compelling reasons to call in consultants.
"There's enough critical mass for privacy-issue consulting," says John Marshall, director of the national technology infrastructure group at Emerald Solutions Inc. "It's really going to dominate what's happening for the next year-and-a-half to two years."
