CNET reports, ‘[i]t may not come as a surprise to many online shoppers, but a new study released this week shows that many major American companies misuse information they collect from consumers over the Web.’

Pharmaceutical and health care firms performed the worst in the privacy study, with an average overall score of 5.4 out of 10. Others at the bottom of the list include insurance firms and companies in the food, beverage and tobacco industries. Airlines scored the highest with a rating of 7.3, followed by computer companies.

Considering that most ‘pharmaceutical and health care firms’ seem to be themselves in the business of marketing their activities via bulk unsolicited commercial e-mails, this hardly comes as a surprise.

With online retail sales increasing substantially, some kind of online privacy code seems necessary to regulate the use of customer data by United States websites. Australian websites are already bound by the extensive provisions of the Privacy Act 1998 (Cth), and are thus among the most privacy-conscious in the world.

This is great for Australian shoppers, but it’s also beneficial for the retailers: reputation is important in cyberspace, and customers are more likely to be drawn to a store that they know respects their privacy than one with cheaper prices but a reputation for selling or disclosing their data. Though this may seem like a case for market self-regulation, the competitive advantage afforded to Australian storeowners is only possible because of onerous legislative requirements.