Firms skimp on privacy protection spending

Investment in privacy protection is significantly lower than in other corporate compliance initiatives such as environmental or ethics programmes.

Despite the growing importance of privacy protection for businesses, 95 per cent feel that their firms spend less on privacy than on environmental initiatives, according to a survey of 44 US-based multinational organisations.

The poll, commissioned by IBM and conducted by the Ponemon Institute, also revealed that privacy spending increased noticeably the further along organisations were in their implementation process of privacy initiatives.

The study's results revealed that companies in the early stage spend an average of about $3.9m, companies in the middle stage spend an average of $6m and companies that have reached the late stage spend an average $14m.

"The spending increases are a result of such late-stage activities as running employee training sessions, performing self-assessments, conducting independent audits, securing vendor relationships and obtaining website certification," the study warned.

Spending on privacy initiatives among the firms surveyed was found to vary from approximately $500,000 to about $22m annually.

Dr Larry Ponemon, chairman and founder of the Ponemon Institute, said in a statement: "Spending is the most objective indicator of how important an initiative is to an organisation."