When building or modifying a web business, consider two broad topics while deciding how to address consumer privacy: volition and culture. "Volition" addresses the voluntariness of the release of information. "Culture" addresses the general perceptions of information in a community. These are considerations separate and apart from legal requirements or liability potential.
In our culture, there are norms about what is intended to be private from whom. As a general rule, you can think of information disseminated in concentric rings -- the inner ring is typically a spouse, the next is typically immediate family and closest friends, then business colleagues, acquaintances, and strangers. For example, in the case of pregnancy or serious illness, we tell those closest to us first, then the folks at work, and likely never discuss it with strangers. We do the same thing with our home address or phone number.
At the other end of the spectrum, there is information we'll give to anyone who asks -- "how tall are you?" "is that your bag?" "what's your favorite color?" Generally, this is information which we believe can't be used in any negative way, that won't reduce our competitive advantage in business or social settings.
The exception to the concentric rings is when we trade a bit of privacy in return for something we want or need. While we wouldn't usually detail our income and debts to a stranger, we'll give that information to a mortgage broker in order to get a home loan. We're conditioned to respond to the most intimate questions of our life to almost any doctor in order to get treatment. To get a job, we may give up information about others who don't even know we've done it -- for example, the home addresses and phone numbers of family members and references.
When your business is in possession of information about individuals, considering culture and volition will help guide your decisions about what to make public through your website. And, pay attention to how your customer demographic is changing.
Sixteen year-olds and twenty-five year olds may want to publicly list their ages on MySpace because they don't want to socialize with each other, but Barbara Walters is one of a very small number of 78 year-old American women willing to publicly declare her age there. In another country, where age is revered, this might be different.
What someone self-published, on MySpace, their blog, or their professional site can be treated as publishable or share-able in almost all contexts. This is quite different from the care to be taken with information people gave in order to get their bills paid or insurance underwritten, even if they were induced to provide it through the Web. This is generally the information that creates the most controversy.
If you're not certain how your customers will react to something you're considering, imagine it outside a web context. If you want to post information, imagine how your family member would react if the same information about him was posted on a bulletin board at work. If you're considering selling customer information, imagine your reaction opening a letter from a company you didn't know that said this same information about you had been sold to them.
I'm not suggesting that this is your only consideration. You are in business to make money. Remember, though, that goodwill is so real that it can be given an asset value and any negative impact to it should be balanced against the potential revenue stream.