Consumer purchasing decisions rely on product privacy

by | Nov 25, 2019

79% of Americans are concerned about the way companies are using their data. Now, they are acting by avoiding products, like Fitbit after the Google acquisition. *Privacy Not Included, a shopping guide from Mozilla, signals that these privacy concerns will impact what (and from whom) consumers shop for over the holidays.

Consumers are concerned about the ways businesses are using their data

A Pew Research Center study investigated the way Americans feel about the state of privacy, and their concerns radiated from the findings. 

    • 60% believe it is not possible to go through daily life without companies and the government collecting their personal data.
    • 79% are concerned about the way companies are using their data.
    • 72% say they gain nothing or very little from company data collected about them.
    • 81% say that the risks of data collection by companies outweigh the benefits.

This study determined that most people feel they have no control over the data that is collected on them and how it is used.

Evidently, consumers lack trust in companies and do not believe that most have their best interests at heart. In the past, this has not been such a big deal, but today, businesses will live and die by their privacy reputation. Such is reflected by the wave of privacy regulations emerging across the world, with GDPR, CCPA, and LGPD.

However, the legal minimum outlined in privacy regulations is not enough for many consumers, suggesting that meeting the basic requirements without embedding privacy into your business model is insufficient.

Such is seen with Fitbit, and the many users pledging to toss their devices in light of the Google acquisition. Google’s reputation has been tarnished in recent months with €50 million GDPR fine and backlash over their secret harvesting of health records in the Ascension partnership.

Google’s acquisition of Fitbit highlights the risks of a failure to prioritize privacy

On November 1, Google acquired Fitbit for $2.1 billion in an effort, we presume, to breach the final frontier of data: health information. Fitbit users are now uprising against the fact that Google will have access not just to their search data, location, and behaviour, but now, their every heartbeat.

In consequence, thousands of people have threatened to discard their Fitbits out of fear and started their search for alternatives, like the Apple Watch. This validates the Pew study and confirms that prioritizing privacy is a competitive advantage.

Despite claims that it will not sell personal information or health data, Fitbit users are doubtful. One user said, “I’m not only afraid of what they can do with the data currently, but what they can do with it once their AI advances in 10 or 20 years”. Another wrote this tweet:

 

This fear is hinged on the general concern over how big tech uses consumer data, but is escalated by the company’s historical lack of privacy-prioritization. After all, why would Google invest $2.1 billion if they would not profit from the asset? It can only be assumed that Google intends to use this data to break into the healthcare space. This notion is validated by their partnership with Ascension, where they have started secretly harvesting the personal information of 50 million Americans, and the fact that they have started hiring healthcare executives.

Privacy groups are pushing regulators to block the acquisition that was originally planned to close in 2020.

Without Privacy by Design, sales will drop

On November 20, the third annual *Privacy Not Included report was launched by Mozilla, which determines if connected gadgets and toys on the market are trustworthy. This “shopping guide” looks to “arm shoppers with the information they need to choose gifts that protect the privacy of their friends and family. And, spur the tech industry to do more to safeguard customers.” (Source)

This year, 76 products across six categories of gifts (Toys & Games; Smart Home; Entertainment; Wearables; Health & Exercise; and Pets) were evaluated based on their privacy policies, product specifications, and encryption/bug bounty programs.

To receive a badge, products must:

    • Use encryption
    • Have automatic security updates
    • Feature strong password mechanics
    • Manage security vulnerabilities
    • Offer accessible privacy policies

62 of those products met the Minimum Security Requirements, but Ashley Boyd, Mozilla’s Vice President of Advocacy, warns that that is not enough, because “Even though devices are secure, we found they are collecting more and more personal information on users, who often don’t have a whole lot of control over that data.”

8 products, on the other hand, failed to meet the Minimum Security Standards, including:

    • Ring Video Doorbell
    • Ring Indoor Cam
    • Ring Security Cams
    • Wemo Wifi Smart Dimmer
    • Artie 3000 Coding Robot
    • Little Robot 3 Connect
    • OurPets SmartScoop Intelligent Litter Box
    • Petsafe Smart Pet Feeder

These products fail to protect consumer privacy and adequately portray the risks associated with using their products. They are the worst nightmare of consumers, and the very reason 79% are concerned about the way companies are using their data.

Through this study, there was an evident lack of privacy prioritization across businesses, especially small ones, despite positive security measures. And those that did prioritize privacy, tended to make customers pay for it. This signals, that the market is looking for more privacy-focused products, and there is room to move in.

Businesses should embed privacy into the framework of their products and have the strictest privacy settings as the default. In effect, privacy operations management must a guiding creed from stage one, across IT systems, business practices, and data systems. This is what is known as Privacy by Design and Privacy by Default. These principles address the increasing awareness of data privacy and ensure that businesses will consider consumer values throughout the product lifecycle. To learn more read this: https://cryptonumerics.com/privacy-compliance/.

Customers vote with their money, coupling the Pew study results with the Fitbit case, it is clear that customers are privacy-conscious and willing to boycott not only products but companies who do not represent the same values. This week serves as a lesson that businesses must act quickly to bring their products in line with the privacy values, to move beyond basic regulatory requirements, and meet the demands of customers.

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