A new study is one of the first to explore the monetary
value of personal information shared online.
WEDNESDAY, MARCH 21, 2012BY NIC FLEMING Audio »
Most of us would shy away from making purchases in a foreign
country if we didn't know the exchange rate. Yet, if privacy is the true
currency of the Internet, as many argue, millions of us are doing that very
thing every day. Meanwhile, Internet giants amend their privacy policies in
ways that allow them to harvest and sell even more of our personal data. While
privacy campaigners protest, users generally vote with their clicks and carry
on regardless.
So should we conclude the Internet generation is happy to
trade its privacy for free or cheaper Web services? Not according to Nicola
Jentzsch of the German Institute of Research in Berlin, and colleagues, who
last week published research showing that most people prefer to protect their
personal data when given a choice and that a significant proportion are willing
to pay extra to do so.
The researchers directed 443 students to a website offering
tickets for a real movie showing, sold by two different vendors. Although the
tickets were subsidized, the volunteers, who were able to purchase one, two, or
no tickets, had to pay most of the cost themselves.
When both vendors offered tickets at the same price but only
one required customers to enter their cell phone number, the more
privacy-friendly vendor got 83% of sales. When participants were offered the
same choice, but with an additional charge of 50 euro cents from the
privacy-friendly cinema, its market share fell to 31%.
"It turns out that when you are good on privacy you can
charge more and make a greater profit," says Sören Preibusch, of the
University of Cambridge, one of the authors of the study, published by the
European Network and Information Security Agency, an agency of the European
Union.
When only one of the two vendors stated it would use the
customer's e-mail address to send them advertisements, and both charged the
same price for tickets, 62% of sales went to the privacy-friendly ticket
retailer. But when the privacy-friendly vendor charged 50 euro cents more, its
market share dropped to 13%.
"What people say in surveys is that they care about
privacy, but what they actually do is spend their time constantly updating
their status on Facebook," says Alessandro Acquisti, codirector of the
Center for Behavioral Decision Research at Carnegie Mellon University, who was
not connected with the new research. "This has led some to conclude that people
no longer care about privacy. This new data, along with similar work we have
done in the U.S., shows this is not the case, and that the desire for privacy
is not dead after all."
Privacy protection is at a critical juncture on both sides
of the Atlantic. In January, Google announced it would merge personal data
gathered from the users of dozens of services, including YouTube, Gmail, and
Google+, saying this would allow better searches and more targeted advertising.
On Monday, France's National Commission for Computing and Civil Liberties,
which represents European regulators, wrote to Google that preliminary findings
suggest that the new policy does not comply with the European Data Protection
Directive.
The E.U. is working on new data protection rules that would
include fines of up to 2 percent of a company's global revenue. Last month the
Obama administration set out the framework for a new privacy code that would
give consumers more control over the use of their personal data.
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