Is There a Balance in the Trade-off between Quality Personalisation and Online Privacy?

This morning at university, you are talking to your friend about her adorable kitten. After getting home, you watch some videos on YouTube. Suddenly, an advertisement for canned cat food pops up. Attracted by it, you start to look through the product. Even though you don’t have a cat, you placed an order for your friend’s kitten.

This series of occurrences are closely related. Is YouTube listening to you? Is YouTube monitoring your life? Do you marvel at the power of this advertisement? Do you think it’s so scary because our privacy seems to be invaded by some digital platforms? Suppose there is a balance between disclosing personal information and getting quality personalisation. In that case, you might have fewer worries about this issue.

Are Personalised Services as Mysterious as You Think they are?

As you may have realised, this ad on YouTube is targeted at you. It is a personalised service.

Personalisation is “the ability to proactively tailor products and product purchasing experiences to tastes of individual consumers based upon their personal and preference information”

(Chellappa & Sin, 2005).

In the digital era, it is usually used in search engines, social media platforms, streaming media, and online retailers. Firms use personalised service as a customer-oriented marketing strategy to maximise immediate and future business opportunities. When the service is used to encourage immediate purchase, the time of marketing, presentation format and content details are crucial for personalisation (Tam & Ho, 2006). For instance, in the cat food advertisement on YouTube, because you discuss cats with friends earlier in the day, you may pay more attention than usual to the relevant advertisement. Also, you may be impressed by the visuals of the video advertisement. Various facts from personalised service impact your choice, so you immediately buy the canned cat.

In addition, personalised service can also increase customer acceptance, loyalty, and satisfaction and improve the firm’s reputation and profitability (Aguirre et al., 2015). A report from McKinsey Company reveals that around 76% of respondents are more likely to choose personalised brands, and 78% said personalisation is crucial for repurchasing and recommending the product (Arora et al., 2021).

Personalisation is not only good for the development of companies, but consumers can also gain some benefits. Using personalisation, customers can acquire a service that meets their preferences with minimal effort. On Amazon, similar products based on viewed items can be efficiently recommended to customers in a list. That means users can easily compare these products without jumping through various pages and apps. The personalised service can also meet the potential needs of users and reduce cognitive overload (Aguirre et al., 2015). For example, with personalisation in Google, people can get a list of results or advertisements based on their activities (Google Search Help, n.d.). Google Searching automatically filters out some irrelevant information, so users can save a lot of time in finding the results they are interested in.

However, the personalised service is based on an individual information, so it may cause some concerns regarding privacy invasion. In this issue, if you were a ‘privacy pragmatist’, you would not refuse personalised services that use your data, but you might also consider how to control privacy risks (Westin, 2003).

What does Online Privacy Mean?

In the digital era, the loss of online privacy has become the most frequent issue in social media and the internet (Flew, 2021).

As Nissenbaum (2009) claims, “privacy is a messy and complex subject” (p. 67). We can find various definitions of privacy in different contexts. Solove (2008) divides the concepts into 6 types, including:

• the right to be let alone;
• limited access to the self;
• secrecy;
• control over personal information;
• personhood; and
• intimacy.

The right to be let alone is a significant element of privacy. However, it’s hard to apply this standard definition to the right to online privacy. Internet users can view some online content physically alone, but they usually watch the same video or web page with a large number of other users. Being alone is almost non-existent in the digital world. Therefore, the definition of online privacy has some changes compared with the right to privacy. Online privacy is often considered as the degree of personal data and browsing history protection. More specifically, it can be seen in the data collecting, processing and storing (Sushko, 2021).

Do You Know Some Online Privacy Issues?

Data harvesting

Social media platforms collect the information you provide when you create an account, communicate with others, and share content (Meta Platforms, 2022). This information is closely related to individuals. If data breaches happen on platforms or websites, a large amount of user information will be exposed. For instance, in 2021, over 500 million Facebook users’ full names, phone numbers and other personal data were leaked online. Similarly, Cambridge Analytica collected individual data from millions of Facebook users without consent to placing political advertisements (Holmes, 2021).

Identity stealing

Identity theft occurs when some people or groups use another individual’s personal information without consent (Office of the Australian Information Commissioner, n.d.a). After thieves gain your information, they may open credit cards, get a loan using your information and sell your data on the darknet. Some thieves usually access your personal information from public resources like your social media photos, contact numbers and so on (Office of the Australian Information Commissioner, n.d.-a). Other unscrupulous individuals may obtain information in some nefarious ways, including phishing, malware and pharming (Sushko, 2021).

Spying and Tracking

Individual information is also recorded when you use some apps or search engines. Google Search engines can collect terms you research for, cookies, browsing history, IP address, views and interactions of content and advertisements (Google Privacy & Terms, 2022).

Cookies are small file that stores user preferences and other information. When you revisit the site, cookies allow the site can quickly recognise your website. When cookies are hijacked or abused, people have some concerns about online privacy. According to a study by the Pew Research Center (2019), 72% of Americans believe that advertisers and technology companies track almost everything they do online. Similarly, Google also admits that cookie tracking is becoming increasingly invasive to users’ privacy. Some third-party cookies continuously track users’ online activity among different websites, while advertisers also use an invasive technique called fingerprinting to find out who you are, even if you use an anti-tracking tool (Nield, 2021). You might start to consider privacy issues. Nevertheless, when you refuse all cookies, some personalised services and features cannot be accessed (Google Privacy & Terms, 2022).

Moreover, although location history tracking improves users’ experience with some personalised services, a lack of transparency in details may make users worry about their privacy. For instance, Google can track your locations even if you pause the location history service on your devices. Shutting “Location History” off will only prevent your movements from being added to the “timeline”, which is a visualisation of your daily activities (Nakashima, 2018).In 2020, Arizona Attorney General Mark Brnovich said that Google cheats on users with this unfair practice (Pietsch, 2022). Google paid $391.5 million to some states to settle an investigation into the non-transparent location tracking features (Pietsch, 2022). The location history function may also put users at risk by recording and exposing information about sensitive locations people have visited. When people get an abortion, they are usually reluctant to share this private information with others. However, their phones may record it by location tracking (Pietsch, 2022). Users are concerned that their personal information has been unknowingly accessed and leaked by technology companies, which could lead to a range of mental health issues.

How to Achieve a Balance between High-Quality Peronalised Services and Privacy Protection?

Here are some solutions that can be adapted for different groups.

Individuals

Know your rights and read privacy policies.

You can use your rights efficiently and effectively only when you know your rights (Office of the Australian Information Commissioner, n.d.-b). Similarly, you need to know what information organisations and institutions collect and how, when and where they access and use your data. After that, you may trust the websites or platforms enough to eliminate unnecessary worries about privacy. In privacy policies, you may find out how to customise your personal services.

Adjust your settings.

You can adjust the settings on your devices or some apps and websites, limiting or avoiding spying and tracking. Besides, you are encouraged to use some “add-ons” and virtual private networks to stop the intensive data collection (Office of the Australian Information Commissioner, n.d.-b).

Clear cookies regularly

Although you cannot wholly reject cookies when you use personalised services, you can delete cookies in your browsers (Office of the Australian Information Commissioner, n.d.-b).

Firms and Organisations

When consumer privacy is under threat, personalisation may become not effective. Firstly, firms should have clear, transparent and accurate instructions about their personalised services (Chen et al., 2022). The terms and conditions should be readable rather than made up of complex jargon. Furthermore, companies should pay more attention to the equality and the symmetry of information between consumers and themselves (Chen et al., 2022). Consumers should be allowed to control the data collection by some websites. Thirdly, it is significant for firms to deal with possible privacy breaches promptly. Google is making a move in this area. This technology giant proposes to phase out third-party cookies on its Chrome browser and change the way of tracking. The proposed solution focuses on user anonymity and limits the tracking of individuals (The Privacy Sandbox, n.d.). Finally, some feedback and reporting mechanisms for privacy issues would help service providers to improve their personalisation.

Government

Platform autonomy is not enough for protecting consumer privacy. Different countries have various laws to govern privacy in the digital era.

European: The General Data Protection Regulation (GDPR)

It is “ the toughest privacy and security law in the world” (Wolford, n.d.). If you violate the GDPR, the fine would be very high and up to €20 million. The GDPR recognises a new set of privacy rights for data subjects, such as the right to be informed, access, erasure and so on (Wolford, n.d.).

Australia: The Privacy Act 1988& Privacy Legislation Amendment Bill 2022

The Privacy Act 1988 is the key Australian privacy legislation for protecting personal information by governing public and private organisations. The Privacy Legislation Amendment Bill 2022 increases the penalty for some privacy breaches aligning with the GDPR laws (i-Sight Software, 2023).

China: Personal Information Protection Law (PIPL)

The law is relevant to transparency and some personal rights (i-Sight Software, 2023).

The U.S.: The patchwork of sector-specific laws and state laws

Government intervention is not the only way to address privacy issues in the United States. There are approximately 20 industry or sectoral federal laws and over 100 state-level privacy laws.

How will personalized services and privacy protection evolve over time?

There would be a balance in the trade-off between quality personalisation and online privacy. In the future personal privacy data may not only include your name, age, geographic location, etc. but it may also be related to personal information in the metaverse. As long as you use the Internet, you cannot get away from worrying about privacy issues. More and more people are open to personalised services and are more concerned about protecting their privacy when using them. Companies have learned that users’ privacy concerns directly affect the loyalty of consumers. They have optimised their personalised services to make them more privacy-friendly. In addition, platforms may no longer have a monopoly on the collection and use of information, and individuals have the same rights to manage their own data. National privacy laws are likely to become globalised, helping to ensure that people’s privacy is equally protected when using services across borders.

Reference:

Aguirre, E., Mahr, D., Grewal, D., de Ruyter, K., & Wetzels, M. (2015). Unraveling the Personalization Paradox: The Effect of Information Collection and Trust-Building Strategies on Online Advertisement Effectiveness. Journal of Retailing, 91(1), 34-49. https://doi.org/https://doi.org/10.1016/j.jretai.2014.09.005

Arora, N., Ensslen, D., Fiedler, L., Liu, W. W., Robinson, K., Stein, E., & Schüler, G. (2021). The value of getting personalization right—or wrong—is multiplying. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying

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