The value of consumers’ personal data online has been a hot topic lately. The astronomical $100 billion some analysts have suggested Facebook could be worth when it goes public stems from the fact that the social media powerhouse has reams of data on users’ chatting, browsing and buying habits. But we’re so short-sighted we won’t pay more to protect that data — even if the cost of that protection is a measly 65 cents.
“Personal data is nowadays traded among service providers like other commodities,” says the European Network and Information Security Agency. According to its research, 47% of service providers interviewed treated personal data as a commercial asset, and 48% admitted to sharing data with third parties.
This should give all of us pause every time we make a purchase, download an app or access a game online, but it doesn’t. ENISA conducted an experiment in which subjects were asked to make a hypothetical online purchase. The transaction could be processed in one of two ways, they were told: One method was more secure and didn’t disseminate their personal information, but it cost an additional €0.50, or about 65 cents. The other way was cheaper but required participants to share additional information like a cell phone number or an email address.
Only about a third of participants were willing to pay the slightly higher price in order to keep that information to themselves, even though the difference in price was made deliberately negligible by researchers. “[When] a privacy-unfriendly competitor charges a lower price the privacy-friendly firm loses market share,” the study observes.
Giving up your privacy online to save a few bucks can have a much higher price than most of us realize. The company warehousing the data could have a security breach — it’s happened plenty of times — and leave your data exposed to the world. Even if this doesn’t happen, once you relinquish your data, you have no control over if, when and to whom it could be sold.
Companies have figured out our personal information is valuable; it’s time for consumers to start realizing this, too. “For a savings of 65 cents, consumers could be giving marketers thousands of dollars worth of personal information in a single transaction,” says Glen Gilmore, a digital marketing consultant who teaches online privacy at Rutgers University. “Some within the marketing industry have valued a person’s online data as being worth as much as $5,000 in sales in a given year,” he says. Should marketers be able to buy that for less than the price of a candy bar?