Do Consumers Benefit From the Trading of Personal Information?
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Union des consommateurs
The heart of this research project is a discussion of whether the trade in personal information by companies is beneficial to consumers.
In addressing this question, the author considered the benefits of the following data practices, arriving at these conclusions:
Profiling: although some consumers may appreciate the personalizing of services and advertising that results from the ability of marketers to create an individually tailored consumer profile, there is nothing to guarantee the accuracy of profiling information that may be used in ways harmful to the person’s interests (for example the granting of credit or hiring decisions). Moreover, profiling creates different categories of consumers (“good consumers” and “bad consumers”) which opens the door to discriminatory practices – noting that France’s Supreme Court had ruled that such consumer characterization was illegal in that jurisdiction. Profiling can also lead to increasingly invasive target marketing which could change the nature of Internet interactions and encourage individuals to over-consume.
Cookies: cookies files facilitate the use of the Internet in helpful ways, but are often installed without consent and collect information about the users without their knowledge or consent. In particular, “persistent cookies” (those that remain on a user hard drive after an Internet session ends) result in a consumer’s total loss of control over personal information – with the attendant risks of profiling and identity theft.
Spyware: where commercial companies include spyware in their software, which automatically downloads when the user accepts the licensing agreement, such software collects personal information, most often without explicit consent, consumes RAM and hard drive space, and mobilizes processor resources that could negatively impact on other computer applications. In addition, only the industry benefits from collecting information by spyware, usually in circumstances where it fears that the consumer would refuse to disclose the information if given a choice.
Spam: defended in some quarters as an environmentally friendly and economical form of advertising that is easy to delete or ignore, and that lets small companies compete with larger ones, the author sees no consumer benefit in this form of advertising due to its high annoyance factor and the fact that spam rarely offers products that consumers might find interesting.
Loyalty cards: the report enumerates the privacy concerns such as the impressive quantity of information that can be collected by businesses, the lack of transparency surrounding its collection, and the impossibility of consumers enjoying the advantages of a loyalty card without accepting this information collection.
Period of retention and safeguards: current practices are prejudicial to consumers due to the privacy risks created by prolonged data retention and poor safeguards.
Cross-border data flows: unlike European laws, Canadian laws do not prohibit transborder transmission or subject it to conditions of equivalent protection. The report suggests that exporting the personal data of Canadians allows companies to circumvent Canadian standards and benefit from legislation that is less binding.
This study incorporates new field research, based on a survey and analysis of online privacy policies of 10 companies, particularly with regard to whether companies seek explicit consent to collect and use personal information. The survey conducted between April 10 and April 20, 2007, with a results grid and a discussion of findings highlights.
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OPC Funded Project
This project received funding support through the Office of the Privacy Commissioner of Canada’s Contributions Program. The opinions expressed in the summary and report(s) are those of the authors and do not necessarily reflect those of the Office of the Privacy Commissioner of Canada. Summaries have been provided by the project authors. Please note that the projects appear in their language of origin.
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