The prevalence and value of data, particularly personal data, is continuing to grow exponentially. Data has become an increasingly valuable resource for businesses. But businesses need to be aware of, and balance the increasing gap between consumer privacy preferences and expectations with business use of data. Addressing this gap is a challenge, particularly as there is limited empirical evidence on how individuals value different elements of data privacy.
In January 2020, the Technology Policy Institute (TPI) sought to address this lack of evidence, and conducted a study entitled ‘How Much is Privacy Worth Around the World and Across Platforms?’ (Study). The Study attempted to quantify what value consumers in various jurisdictions place on different types of data privacy. The TPI ‘s premise was that by attaching a value to different forms of data privacy, regulators are in a better position to implement privacy rules and policies which align with overall consumer preferences and are not overly restrictive on business.
The Study measured individuals’ valuations of online privacy across a wide range of countries, including United States, Mexico, Brazil, Colombia, Argentina and Germany. The data considered included personal information on finances, biometrics, location, networks, communications and web browsing. To quantify the value of privacy in relation to these forms of data, the Study used carefully designed discrete choice surveys which essentially asked people how much they would be willing to sell their data for.
The Study found that people place the highest value on keeping financial and biometric information private. Location privacy was the least valuable form of data to people in every country studied. People expected to be paid the least for giving permission to receive ads. Across countries, Germans valued privacy more than people in the U.S and Latin America.
The Study found that across all the countries studied, people required an average payment of $9USD/month from their banks to for the right to share their balance and $7.50/month from their smartphone manufacturer to share their fingerprint information.
On the other hand, people placed very low value on avoiding ads and, on average, required payments of $1.82/month for their location data. Interestingly, in Argentina, Colombia and Mexico, the average respondent was willing to pay small amounts to receive personalised ads.
For instance, Germany places a notably higher preference on the value of financial data than any other country studied. German respondents were willing to share bank balance information in exchange for monthly payments of $15.43 and cash withdrawal information for $13.42/month. This is significantly higher than the average required payment of $9/month derived from the responses of all consumers. This disparity ultimately implies that Germans would be less accepting of lenient privacy regulations and require their government to hold tech giants and other social media platforms accountable for the misuse of personal data.
While the value placed on financial data was higher in Germany, the Study showcased how all countries, not just Germany, placed notably higher preference on financial data privacy than any other form of data. This is unsurprising given the number of financial data breaches which have recently occurred. In 2018, a software engineer in Seattle hacked into a server holding customer information for Capital One Financial Corporation, and the 11th largest bank in America. The hacker obtained the personal data of over 100 million people, deeming the breach one of the largest thefts of data from a bank to date. The breach saw 140,000 Social Security numbers and 80,000 bank account numbers stolen in addition to the tens of millions of stolen credit card applications. This is only one of a number of recent high-level breaches, so it is unsurprising that financial data privacy has a high quantitative value across most jurisdictions.
This study has come at a time when consumers have become increasingly concerned over how tech giants and retailers have been collecting and monetising their personal data with calls for increased regulation becoming louder.
The Study showed that, across all six countries studied, consumers placed the highest value on the privacy of financial and biometric information and placed relatively low values on location data. This suggests that policies enacted should offer higher privacy protections for financial and biometric data and focus regulatory activities more heavily on these forms of data rather than on location data.
As consumers in different countries value privacy differently, rules might be more likely to pass a cost benefit test in certain countries than in others. So, a one size fits all approach may not be most effective. Each country should consider the needs and preferences of their citizens when making their privacy regulations.
The findings also have helpful implications for businesses in their use of personal data. If consumers value data privacy of certain categories of information highly then business need to exercise more care in use and disclosure of that information and in ensuring transparent data handling practices.
This article was originally published on OneTrust and is available here.