Personal data consent: What customers are afraid of and what do they look for?

Personal data consent: What customers are afraid of and what do they look for?

TL;DR How companies can increase personal data consent? Consumers’ reluctance to reveal their personal information is primarily triggered by the lack of adequate info, so companies can address that by providing clear and direct information of destination and purpose of data collected.


The age of technology and digital transactions has brought a new dilemma for consumers: to share or not to share private information. This information, which is generally summarized in a set of data on the identity of the person, their demographic characteristics and their consumption preferences, is considerably susceptible to users of new technologies.

Because of this, a large part of consumers want to refrain from revealing their data because they cannot estimate the risk and the consequences of doing so. Commonly, users estimate that these consequences range from receiving invasive or unwanted advertisement, the perfect price discrimination that claims to charge the maximum willingness to pay, up to identity theft.

This lack of knowledge is basically due to the fact that users are not adequately informed about the purpose of their data. The ultimate goal is for companies to promote innovations, better products and more efficient pricing to their customers. Thus, the data becomes an input as important as fuel, which is boosting the online industry. Unfortunately, this innovation is causing a loss of privacy.

Therefore, consumers have begun to reveal less and less personal information, unsubscribing to newsletters and choosing to maintain private profiles on social networks. An example of this is the case when Facebook begun back in 2005, where more than 80% of its users disclosed their private information. However, as the years went by, the disclosure of information decreased until it reached less than 20% of the public profiles in 2011 (Acquisti et al., 2015).

Obtaining Personal Data Consent

Why consumers refuse to consent?

  • Lack of understanding of destination and purpose of their data
  • Uncertainty about consequences of sharing their data
  • Desire to protect themselves from price discrimination

When consumers are willing to consent?

  • When consumers feel decision power over their data
  • When no intrusive/sensitive communication would be created
  • When consumers are certain that their private data is not going to be sold to 3rd parties

What could companies do?

  • Understand impact of consent choice structure and framing and learn about brand effects and consumer perceptions
  • Inform consumers about the destination and purposes of data collected, highlighting direct benefits of data sharing for consumers
  • Help consumer to make better-informed decisions about their data (boost & nudges)

Experiences indicate that people are willing to reveal their privacy according to different conditions. One of them is the assurance that the client feels owner of their information; i.e., when an organization assures consumers’ privacy, they are more likely to share their data


As a result of this, companies have had to implement different mechanisms to get information from their customers. These range from inducing the acceptance of terms and conditions by default to forced choice to subscribe to newsletters. So, like any other fuel, it is necessary the existence of a regulation for the extraction and use of the data. The General Policy of Data Protection (GDPR) is generated from this situation, which is an extension and refinement of the requirements imposed in 1995 for the protection of privacy in the European Union (Newman, 2008; Hoofnagle et al. al., 2018).

So, what are the incentives for a user to give up their data? It is assumed that with these data, a company can accurately identify a customer’s consumption preferences. This would allow the consumer to minimize their online search, save time, even to access discounts for fidelity and continuity. Although customers also have the incentive to remove their data to be treated as new customers in future purchases, then enjoying discounts and other offers.

Experiences indicate that people are willing to reveal their privacy according to different conditions. One of them is the assurance that the client feels owner of their information; i.e., when an organization assures consumers’ privacy, they are more likely to share their data.

“…consumers will be more willing to share their information when they know that exchange it will be used only for their own benefit.”


It is also necessary that consumers estimate the risk of revealing their information and are assured that their identity will not be supplanted; thus, the client will be more willing to exchange their data. In this case, when consumers know how many people are exchanging their data, they can identify that this practice is not risky; thereby, they are confident and willing to give their data.

Another condition is to let consumers know the destination and final use of the data. In particular, consumers want their data to be neither transferred nor profitable for third parties. Thus, consumers will be more willing to share their information when they know that exchange it will be used only for their own benefit.

Additionally, the disclosure of information also depends on the degree of intrusion that this brings with it; an example of this is the tracking of the online navigation and transactions of a client. In these situations, consumers will be more willing to reveal their browsing history if they believe that this tracking will bring them improved and personalized services.

In conclusion, advances in information technology must contain designs in decision-making architecture, leading consumers to make better-informed decisions in order to reduce their restrictions and to minimize the adverse consequences that make them regret revealing their privacy.


Bibliography

Acquisti, A., Brandimarte, L. and Lowestein, G. (2015) Privacy and human behavior in the age of information. Science, vol. 347(6221), pp. 509-514.

Hoofnagle, C.J., van der Sloot, B. and Zuiderveen-Borgesius, F. (2019) The European Union general data protection regulation: what it is and what it means. Information & Communications Technology Law, vol. 28(1), pp. 65-98.

Newman, A.L. (2008). Protectors of Privacy: Regulating Personal Data in the Global Economy. Cornell University Press.

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Personal data consent: What customers are afraid of and what do they look for?
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Personal data consent: What customers are afraid of and what do they look for?
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How companies can increase personal data consent? Consumers’ reluctance to reveal their personal information is primarily triggered by the lack of adequate info, so companies can address that by providing clear and direct information of destination and purpose of data collected.
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Expilab Research
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08 Jul 2019
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Daniel Guerrero
Daniel Guerrero

Associate Researcher @ Expilab Research. Daniels pursues Doctorate studies at Universitat Autonoma de Barcelona with focus on Applied Economics.

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