How We Decide Online: Applying the Theory of Privacy Calculus to the Process of Divulging Personal Information Online
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My final research project as part of the Communications Masters Program at The Johns Hopkins University. ...
My final research project as part of the Communications Masters Program at The Johns Hopkins University.
This study is important to businesses offering products and services online for several reasons. First, the Federal Trade Commission (FTC) has grown more involved in protecting consumers from privacy violations as widespread evidence of questionable privacy policies and practices related to exposure of personal information emerges. A November 2011 settlement with Facebook resulted in, among other requirements, 20 years of privacy audits to ensure users explicitly agree to any changes in how their information is presented and shared online (Sengupta, 2011). The visibility of companies misusing or collecting information without permission has in part prompted efforts to regulate online privacy. The Obama administration has begun this process of regulation with the February 2012 development of a “Privacy Bill of Rights” for online consumers. The proposal seeks to give consumers greater control over their personal data, including a framework for accountability and enforcement of privacy rights (The White House, 2012).
Although businesses should care about the threat of FTC enforcement of consumer rights online, the growing awareness of privacy violations has created another concern for businesses—increased consumer concern over the use of their personal information (McGrath, 2011). While some exchange of sensitive information, such as credit card numbers or shipping address, can be necessary for transactions or required for personalized services, how companies negotiate the release of personal data can mean the difference between success and failure for products and services sold and offered online. To achieve desired consumer behaviors—from online purchases to providing valuable preferences to better sell at a later point—businesses, especially those in roles responsible for website and online product design, must understand how consumers weigh risks and benefits during these online transactions.
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