Is online privacy a right or a privilege?

A white dry erase board with red marker, with the words Target Your Customers

shredding_moneyThat is the question of the day.

The European Network and Information Security Agency (ENISA) – conducted some research to examine the economic dimension of privacy.

Put simply: would you pay a bit extra for additional privacy?

And this is how they tested it: they brought in subjects into a lab, and asked them to choose between movie tickets offered by two different companies. Both companies (Firm A and Firm B) requested personal information including name, date of birth and email addresses.

(They actually used a lie detector to ensure the participants provided accurate information here. Perhaps because I work in the industry, I found the request for the date of birth to be significant. I personally wouldn’t part with this information easily, certainly not with a cinema ticket provider.)

If Firm A, whose ticket price here is identical to Firm B, requested more data from the subject, say a mobile number, eight out of ten flocked to buy tickets from Firm B.

No real surprise that we tend to prefer purchases that require us to give away less info.

But if Firm A offered to reduce the price of the movie ticket in exchange for the subject’s mobile number, two thirds of the ticket buyers opted to provide their numbers to be awarded the discount. The study offered a discount of 50 (euro) cents for the mobile number, which worked out to a saving of about 17% of the price of the ticket.

So, their findings suggest that while we care about privacy, most of us are willing to do away with it if we can get a service at a cheaper price.

As ENISA put it in the conclusion of the report:

The laboratory experiment also shows that the majority of consumers buy from a more privacy-invasive provider if the service provider charges a lower price

The research led the team to offer a number of recommendations, including these two:

  • When there is no price difference, the competitor who requests less data from a customer can obtain a competitive advantage so long as it’s obvious to the consumer
  • Online service providers should provide consumers different menus with respect to price and personal data requirements.

A white dry erase board with red marker, with the words Target Your CustomersPerhaps we need to think about putting a value on our private information. What is it worth?

Some stores are really cheeky, having their shop assistants ask their clientele boldly for postcodes and addresses before they make a purchase. I have heard countless people offer this up without asking them why they want it or where they will store it.

Loyalty cards are another way that we exchange vital shopping habits and demographic information with stores we frequent regularly. Question is, are we getting our money’s worth?

Maybe rather than thinking about the discounts we can get for parting with our information, we should think about what we would pay to keep it safe?