Privacy Paradox

What is the privacy paradox?

The ‘privacy paradox’ suggests that while Internet users are concerned about privacy, their behaviors do not mirror those concerns. Many researchers have studied this phenomenon and a single emerging development to explain this has yet to emerge.

Case Study 1: The Privacy Paradox: A Challenge for Business

A study conducted by Edelman Berland, a market research firm sponsored by EMC, a data storage giant, found some intriguing results with implications for businesses that seek to derive and exploit personal information from their customers. The study presented people from all over the world with questions regarding their perceptions of privacy.

When asked to “name the leading threats to online privacy in the future” 51 percent of respondents cited  “businesses using, trading or selling my personal data for financial gain without my knowledge or benefit,” 35 percent reported “lone/crazy hackers, hacker groups or anarchist types,” and 21 percent reported “my government spying on me.”  These results indicate most people trust the government with their information but do not trust commercial business.  This makes sense because the government is thought to use this information to serve and protect the country, while businesses are thought to sell the information to other businesses.  Further, when asked if they would like the government to “prohibit businesses from buying and selling data without my opt-in consent,” 87 percent indicated that they would.

Case Study 2: Privacy Paradox: Americans Happy to Share Data With Big Business

In a similar study commissioned by Infosys, Americans were found to be less concerned about sharing personal data with companies than consumers are in Germany. While 88 percent of participants in the United States indicated that are comfortable with retailers gaining access to their personal data, only 57 percent of German participants were comfortable. Respondents from the U.S. were less comfortable with the banking industry gaining access to their data at 87 percent, and Americans were least comfortable with the healthcare industry gaining access to their data.  Germans cited a similar trend, with 56 percent and 50 percent reporting comfort in those industries gaining access to their data, respectively.  This indicates that privacy may be more valuable to the public cross-culturally.

These findings suggest that many participants base their comfort surrounding the exploitation of their privacy based on what benefits they get in return.  Retailers typically offer special discounts for email addresses or phone numbers, while healthcare industries usually have less to offer.