Causes and consequences of consumer online privacy concern

Purpose Past research on internet privacy has examined various aspects of privacy regulation and consumer privacy concerns. The purpose of this paper is to develop a conceptual model that links anteceding environmental factors with the resulting consumer responses using the power‐responsibility equilibrium perspective. Design/methodology/approach An online survey of 182 net shoppers was conducted whereby respondents were asked to recall a recent web site registration that required them to provide personal information online. Findings The results indicate that robust perceived business policies and governmental regulation reduce consumer privacy concern. More interestingly, the data show that a perceived lack of business policy or governmental regulation will result in consumers attempting to regain power balance through a variety of responses. As predicted, increased concern resulted in higher power‐enhancing responses such as the fabrication of personal information, use of privacy‐enhancing technologies and refusal to purchase. Practical implications To reduce consumer privacy concern and subsequent negative responses, organizations need to pay close attention to their privacy policies through greater self‐regulation, third‐party accreditation and to ensure the presence of compliance mechanisms that support and check the marketing and collection activities of their organization and related parties. Regulators can reduce consumer concern by further defining and improving the legal framework for protecting consumer privacy on the internet. In addition, governments should consider overseeing third‐party privacy accreditation as well as firm and industry self‐regulation. Finally, to improve consumer perceptions of privacy protection, enhanced regulatory privacy protection should be communicated to the public along with a response outlet for privacy concerns so that consumers know that they should report privacy‐related complaints to a regulatory agency. Originality/value The paper examines how business policies and regulation influence consumer online privacy concern, and the resulting consequences on internet user behavior.