Consumers' Understanding of Privacy Rules in the Marketplace: Findings from a National Survey

Privacy and Security, Networks, the Internet, and Cloud Computing and Internet

Article Snapshot

Author(s)

Amy Bleakley, Michael Hennessy and Joseph Turow

Source

Journal of Consumer Affairs, Vol. 42, No. 3, pp. 411-424, Fall 2008

Summary

This paper surveys online consumers to assess how well they understand privacy regulation and privacy policies.

Policy Relevance

Consumer education and mandatory labeling on websites is necessary to better prepare consumers to protect their privacy when online.

Main Points

  • American privacy law allows some businesses to share private information about their customers.
     
  • This paper presents the results of a survey of online customers, which tested consumer’s knowledge of privacy rights and issues.
         
  • The survey results were highly dependent on the personal traits of the individual test taker.
    • Individuals with more education, college or graduate school, scored higher than those without.
       
    • Older individuals (50-69) scored highest.
       
    • Men generally scored higher than women.
       
    • Skilled internet users generally scored higher than people unfamiliar with the internet.
       
  • Many people who understood that online retailers were allowed to share their customer’s personal information were unaware that supermarkets and charities could also share personal information.
     
  • This article proposes a two-step approach to solve the issue of consumer ignorance:
    • 1. Consumer education about privacy rights.
       
    • 2. Mandatory labeling, on websites and in stores, outlining privacy rights and polices.
       
  • Potential problems with reforming the current system:
    • Businesses currently have no incentive to educate their customers.
       
    • Consumers rely on simple information given in small doses, and will ignore any complex or in depth information presented to them.
       
  • Governmental intervention will be necessary to mandate labeling on websites.

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