Understanding Consumer Privacy: A Review and Future Directions

Academy of Marketing Science Review,  2008  by D, Clinton Jr,  Saini, Amit

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Reading the contents of privacy notices is one way that consumers can increase their knowledge and manage their privacy concerns. Privacy notices can enhance the sense of control consumers feel they have and can help them decide whether or not to share personal information (Wang et al. 2004). One study on online privacy notices found that three factors that positively impact the tendency to read online privacy notices include consumer's concern for privacy, positive perceptions about notice comprehension, and higher levels of trust in the notice (Milne and Culnan 2004). In spite of this, a large majority of individuals do not look for or read privacy policies (Milne, Rohm, and Bahl 2004). Instead, many consumers rely on other heuristics to decipher privacy protection, such as third party privacy seals, brand reputation, or prior experience with the firm (Bowie and Jamal 2006). Interestingly, use of such alternative heuristics is found to be negatively associated with reading of privacy notices (Milne and Culnan 2004).

With the rise of identity theft, numerous strategies have been proposed to help consumers protect their privacy. Offline strategies include understanding information practices, monitoring your credit, protecting your mail, minimizing the amount of information you disclose, and protecting your social security number (FTC 2001). In a study of theft prevention practices by both a college student and non-student sample, it was found that both groups practice many of these offline strategies, but that few individuals in either group order yearly credit reports, ask merchants how they are going to use their personal information before they reveal it, or pick up new checks from the bank (Milne 2003). Other strategies that consumers can employ to protect their privacy online include utilizing secure websites, opting-out of third party information sharing, creating separate email accounts, encrypting email, and using anonymous browsing software (Center for Democracy and Technology 2003). In a study of online identity theft protection behavior, it was found that a majority of respondents utilized secure online forms, opt-out mechanisms, and separate personal email accounts, while less than a third cleared their computer's memory, encrypted their emails, or used anonymous Internet browsing software (Milne et al. 2004). In another study, it was found that there was a strong positive relationship between privacy concerns and online privacy protection behavior (Sheehan and Hoy 1999). As privacy concerns increased, consumers were more likely to provide incomplete information to websites, to complain to their ISP about unsolicited e-mail, request removal from mailing lists, and "flame" (i.e., sending a highly negative message) those entities sending unsolicited e-mail (Sheehan and Hoy 1999).

In addition, studies utilizing poststructuralist theory offer another perspective on how consumers manage their privacy (Zwick and Dholakia 2004). In order to protect their identities and personal information, consumers may or may not choose to represent themselves accurately to firms. Research has identified four approaches that consumers take to manage their online identities: 1) identifiability (i.e., disclosure of all personal information with high accuracy), 2) confidentiality (i.e., disclosure of highly accurate but restricted information), 3) secrecy (i.e., nondisclosure of information), and 4) anonymity/pseudonymity (i.e., disclosure of information that is inaccurate) (Zwick and Dholakia 2004). It is argued that the digital representation of the consumer (i.e., the identity that exists as bits of information about the consumer in firm's databases) constitutes the totality of a consumer's identity for a firm. In effect, firms market their products and services to these digital representations and not to the physical reality of consumers. Therefore, for consumers the highest state of self-determination and control comes when firms, especially online firms like Amazon.com, provide full access to the content of their databases to consumers so they can craft their digital identity (Zwick and Dholakia 2004).