APEC Online Privacy Protection Framework to Facilitate Increased Electronic Commerce

Worldwide electronic commerce spending will reach $6.9 trillion in 2004, with the Asia-Pacific (excluding the Americas) accounting for $1.6 trillion - over 20 percent of the total forecast, reports Forrester Research. This figure is set to grow over the coming decade, but concern over the collection and unauthorised use of personal information in the region could hamper the growth of online transactions and limit the development of the information society. The APEC Electronic Commerce Steering Group is working to address this concern and has just released a draft APEC Privacy Framework for consultation with business, consumers, law associations and privacy experts throughout the region. The Framework aims to build the trust and confidence of consumers resulting in greater use of electronic commerce.

The draft Framework aims to protect the privacy of online consumers by setting limits on the collection and use of personal information. Mr Peter Ford, Chair of the APEC Privacy Sub-Group, commented recently, "Unless people feel confident that their personal information will be protected they will not engage in electronic commerce. The Framework aims to build their confidence by ensuring transparency through requiring businesses to inform the public about their privacy policies and how information will be used."

At the same time, the Framework recognises that consumers should be able to ensure that any personal information that is collected is accurate and up to date. The Framework also takes into account the need in today's electronic world to balance the free flow of information with privacy rights. Fundamental to the Framework is the idea that, in the online world, privacy rights need to be assured at an international level in a way that benefits both consumers and industry.

The other significant beneficiaries of the eventual implementation of the Framework will be businesses and governments in the region. Business will see their bottom line grow as consumers, assured of personal data privacy, engage in increased online transactions. Governments will find the Framework useful in framing their laws and policies in a way that protects the rights of individuals and businesses. The framework will also help APEC economies to develop complementary laws and policies which will facilitate increased cross border transactions.

The APEC Privacy Protection Framework is based on high level privacy principles and outlines effective mechanisms for their implementation. This clear structure is intended to help economies protect privacy, maintain the free flow of information and enable enforcement agencies to fulfill their mandates regarding privacy and public safety.

The ten principles outlined in the Framework address privacy issues in the context of electronic commerce. The principles of Preventing Harm, Notice, Collection Limitation, Uses of Personal Information, Choice, Integrity of Personal Information, Security Safeguards, Access and Correction, Accountability and Maximising Benefits, are drafted to address the complexity of the issues surrounding online privacy and the need to be flexible in application across the region.

"Considering the social, cultural and legal differences among APEC economies, flexibility in the implementation of the privacy principles will be essential to the success of the APEC Privacy Framework," stated Mr Ford.

The APEC Privacy Framework owes much to the OECD Privacy Principles of 1980. This earlier set of principles was considered by electronic commerce experts in the APEC Privacy Sub-Group during the drafting process of the current draft principals, along with early consultations within economies and discussions with economy experts at the recent APEC Privacy Implementation Mechanisms Symposium in Chile. After considering many inputs, the drafting group decided that the value of the APEC Privacy Framework should lie in its contribution to economic growth in the region and drafting was undertaken with this in mind.

Further consultations within economies will take place over the next few months with the aim of finalising the principles by mid 2004 and the whole Framework by the end of the year. The APEC Privacy Sub-Group recognises the importance of encouraging private and public sector comment on the principles and Framework, and will release the draft for public comment as soon as the principles have been agreed amongst APEC Member Economies.