Privacy Front and Center: Meeting the Commercial Opportunity to Support Consumers Rights
By Jesús Salas, Associate, Omidyar Network
American consumers are increasingly concerned about privacy and data security when purchasing new products and services, which may be of a competitive advantage to companies that take action towards these consumer values, a new Consumer Reports (CR) study finds.
The new study, “Privacy Front and Center: Meeting the Commercial Opportunity to Support Consumers Rights,” from CR’s Digital Lab with support from Omidyar Network, looks at the commercial benefits for companies that differentiate their products based on privacy and data security.
The report lays out a succinct timeline for the evolution of consumer attitudes toward privacy that culminates with a clear call to action for innovators. Through their comprehensive research methodologies, CR has been able to draw out the nuance around when, why, and how much privacy and security features matter for individuals looking to use and buy security cameras, connected cars, smart speakers, and other products. The report also contextualizes the role that both rule-making through regulation and the supply of better products can have to meet the growing market demand.
“This study shows that raising the standard for privacy and security is a win-win for consumers and the companies,” said Ben Moskowitz, the director of the Digital Lab at Consumer Reports. “Given the rapid proliferation of internet connected devices, the rise in data breaches and cyber attacks, and the demand from consumers for heightened privacy and security measures, there’s an undeniable business case for companies to invest in creating more private and secure products.”
Here are some of the key findings from the study:
- According to CR’s February 2020 nationally representative survey, 74% of consumers are at least moderately concerned about the privacy of their personal data.
- Nearly all Americans (96%) agree that more should be done to ensure that companies protect the privacy of consumers.
- A majority of smart product owners (62%) worry about potential loss of privacy when buying them for their home or family.
- The privacy and security conscious consumer class seems to include more men and people of color.
- Experiencing a data breach correlates with a higher willingness to pay for privacy, and 30% of Americans have experienced one.
- Of the Android users who switched to iPhones, 32% indicated doing so because of Apple’s perceived privacy or security benefits relative to Android.
The study draws from a nationally representative CR survey of 5,085 adult U.S. residents conducted in February 2020, a meta-analysis of 25 years of public opinion studies, and a conjoint analysis that seeks to quantify how consumers weigh privacy and security in their hardware and software purchasing decisions.
Omidyar Network is honored to support this endeavor to both understand and inform the commercial case for investments in security and privacy-enhancing technology. While privacy should not be turned into an out-of-reach luxury, these findings do present an opportunity for companies to be among the first to differentiate and capture market share or leverage consumer’s willingness to pay in the short-term. Over time, we expect many privacy and data security features to become “table stakes,” in which case first movers will innovate and raise standards further.
Supporting efforts like this is key to our vision of enabling responsible technology that promotes well-being and individual liberty. To accomplish this, we support different levers that drive competition and innovation while safeguarding to manage risks and unintended consequences.
CR also recently launched an updated and expanded website for the Digital Standard with Omidyar Network joining as a strategic partner. The Digital Standard is an evolving, open source framework used by independent testing organizations, researchers and product teams to evaluate how technologies respect consumers’ privacy and security interests. It serves as a resource for companies looking to implement and take action on stronger privacy and security, as well as ownership and governance.
We encourage innovators to leverage and enhance this tool to collectively raise the standard on technology, and grow a culture of responsibility within companies overall.