Online Consumers Value Privacy

    June 7, 2007

Consumers are willing to pay extra to buy items from online retailers when they know how a retailer’s policies will protect their privacy, a new Carnegie Mellon University study shows.

Participants in the study used a Carnegie Mellon search engine named Privacy Finder, which can evaluate a site’s privacy policies and display the results on the search page. The study led by Lorrie Cranor, director of the Carnegie Mellon Usable Privacy and Security (CUPS) Lab, found that consumers were more likely to make a purchase from online retailers with good privacy policies.

Some consumers express concerns over deceitful online retailers who might misuse credit information, target spam to their email addresses or violate their privacy. Some studies have found that consumers do not actively protect their privacy online. For example some people are willing to provide private information in return for lower prices or a monetary reward.

"Our suspicion was that people care about their privacy, but that it’s often difficult for them to get information about a Web site’s privacy policies," said Cranor, an associate research professor of computer science and of engineering and public policy.

"A Web site’s policies may not be readily accessible, can be hard to interpret and sometimes are nonexistent, Cranor said. "People can’t act on information that they don’t have or can’t understand," she added.