Online Privacy and the Disclosure of Cookie Use: Effects on Consumer Trust and Anticipated Patronage

Abstract

The use of Internet cookies by visited Web sites and third-party firms has been criticized by consumer advocates, policy makers, and even marketers themselves as a potential threat to consumer privacy. However, surprisingly little research has examined how the interactive effects of the disclosure and practice of cookie use as a method of nonconsensual identification might influence online users’ affect or behavior. The current research addresses this lack of research by presenting the results of three studies. Study 1, a longitudinal examination of the online environment from 2000 to 2007, finds that both cookie use and disclosure have increased, but the covert use of cookies is still a concern. Study 2 finds that consumers’ negative reactions to cookie use are significantly reduced by a priori cookie disclosure by the visited Web site. Study 3 shows that consumers’ online experience and desire for privacy act as additional moderators of reactions to cookie use. The author examines the implications of the three studies from the perspectives of research, management, and public policy.

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