STEVEF%WRQ@mcimail.com (Steve Forrette) (01/26/91)
CAMBRIDGE, MA (JAN. 23) - Lotus Development Corp. and Equifax Inc. Wednesday announced the cancellation of Lotus MarketPlace: Households, a CD-ROM database product of names, addresses, and marketing information on 120 million U.S. consumers originally scheduled for shipment in March. The companies said the decision to cancel the product came after an assessment of the public concerns and misunderstanding of the product, and the substantial, unexpected additional costs required to fully address consumer privacy issues. Lotus also announced that it will discontinue shipment of Lotus MarketPlace:Business, a database of information on seven million U.S. businesses that began shipping in October, 1990. "Unfortunately, Lotus MarketPlace: Households is at the apex of an emotional firestorm of public concern about consumer privacy. While we believe that the actual data content and controls built into the product preserved consumer privacy, we couldn't ignore the high level of consumer concern," said Jim Manzi, Lotus' president and chief executive officer. "After examining all of the issues we have decided that the cost and complexity of educating consumers about the issue is beyond the scope of Lotus as a software provider." "Technology is radically changing the way we work and, more importantly, how we use information," said Manzi. "Balancing the advantages of easier access to information with the individual's right to privacy is only the first of many new issues our industry will grapple with in the coming years." C.B. (Jack) Rogers, Jr., president and chief executive officer of Equifax, which provides the data in MarketPlace, said: "Equifax has made several key investments in consumer-oriented initiatives, including our sponsorship of a national survey of consumer attitudes on privacy. The major survey finding was that consumers are willing to make trade-offs for the use of their personal information when they clearly understand the benefits. Despite our significant consumer education efforts, consumer misperceptions about this new product offered through this distribution channel persist." In developing Lotus MarketPlace: Households, Lotus and Equifax implemented a number of privacy-related controls that exceeded traditional direct- marketing industry practices. These practices were the result of extensive research of the consumer privacy issue prior to product development, including testing the product concept with several consumer focus groups and counsel from a nationally recognized consumer-privacy expert. The practices included: o Limiting the data. Specifically excluded from the product were telephone numbers and individual personal data such as actual income, credit data, and purchase history; o Offering the data only to legitimate businesses, through a controlled purchase process; o Educating and advising users about the proper legal and ethical responsibilities for list usage; and o Providing several Lotus- and Equifax-funded options for consumers to have their names removed from the database. "We developed MarketPlace in response to a perceived need and real market opportunity. MarketPlace is an innovative tool for small businesses, who are often shut out of sophisticated direct marketing because of its cost or complexity," said Manzi. "The market for tools like MarketPlace is a viable one. At the same time, the product is not part of our core business, and Lotus would be ill-served by a prolonged battle over consumer privacy." Rogers added: "Equifax is a technology leader and, equally important, a pioneer in the area of consumer privacy protection in the information industry. While we remain committed to using the most sophisticated technology available, we are equally committed to maintaining the delicate balance between legitimate information needs of business and consumers' privacy concerns." The Lotus MarketPlace product family was a suite of CD-ROM (compact-disc, read-only memory) database tools that used the Apple Macintosh personal computer to make it easy for businesses to find new customers.