Professor Finds No Long-Term Economic Harms From Privacy Protection
Privacy regulation might have short-term costs, but there’s a dearth of evidence about its long-term economic harms, Carnegie Mellon University professor Alessandro Acquisti said. Speaking on a Thursday webinar hosted by George Washington University privacy professor Daniel Solove, Acquisti also addressed the so-called “privacy paradox” and the challenges of assigning a price to someone’s personal data.
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GDPR clearly took a toll on the effectiveness of advertising, Acquisti said, but the harder and more interesting issue is whether there is "evidence of downstream, long-term economic harm from privacy protection." The professor, who studies the economics of privacy, said that his research so far has found no long-term negative effects on consumers from GDPR or Apple's App Tracking Transparency privacy framework. "These unintended consequences that industry is focused on so much to oppose privacy regulation ... there [doesn't] seem to be much robust evidence for that."
Meanwhile, Acquisti acknowledged that paying for privacy can be a tough sell for consumers. Many consumers "feel they already have no privacy,” he said. “They've already lost it, and therefore it's kind of pointless to try to pay money to protect something that is already gone."
Consumers might benefit from gaining property rights to their data, but "the behavioral challenge that these markets face is ... how to properly assign value to one's own personal information,” said the professor, noting that the same "piece of information in two different contexts may lead to dramatically different consequences once it's used."
Acquisti and Solove also discussed the privacy paradox, which refers to a possible dichotomy between how people say they feel about privacy and their actual behaviors. For example, people often claim that privacy is important -- but their actions in sharing personal data may suggest differently, they said.
Concluding from this that people don't care about privacy, however, is "the most naive conclusion we could derive from the privacy paradox,” argued Acquisti.
Solove agreed, saying he believes people’s behaviors when confronted with privacy decisions are actually “contextual risk decisions.” It’s “much more complicated” than not caring about privacy. “A lot of times we see the companies structuring decisions in ways that maximize people sharing data [and] maximize people making decisions that are not necessarily … good for their privacy and not necessarily reflective of their attitudes about privacy.”