We support privacy, but not in public

Fascinating piece of research by Joseph Bonneau on the Economics of Privacy on Social Networks (blog here, report here). This piece about consumer social networks is fascinating:

The most interesting story we found though was how sites consistently hid any mention of privacy, until we visited the privacy policies where they provided paid privacy seals and strong reassurances about how important privacy is.

We developed a novel economic explanation for this: sites appear to craft two different messages for two different populations. Most users care about privacy about privacy but don’t think about it in day-to-day life. Sites take care to avoid mentioning privacy to them, because even mentioning privacy positively will cause them to be more cautious about sharing data. This phenomenon is known as “privacy salience” and it makes sites tread very carefully around privacy, because users must be comfortable sharing data for the site to be fun.

Instead of mentioning privacy, new users are shown a huge sample of other users posting fun pictures, which encourages them to share as well. For privacy fundamentalists who go looking for privacy by reading the privacy policy, though, it is important to drum up privacy re-assurance.

So - two markets. Over time the "privacy fundamentalists" force changes, but the new sites are a bit "Wild West":

The privacy fundamentalists of the world may be positively influencing privacy on major sites through their pressure. Indeed, the bigger, older, and more popular sites we studied had better privacy practices overall. But the desire to limit privacy salience is also a major problem because it prevents sites from providing clear information about their privacy practices. Most users therefore can’t tell what they’re getting in to, resulting in the predominance of poor-practices in this “privacy jungle.”

To which we would add, mosts of these sites are free, and you have to remember the difference between a user and a customer. A customer pays money, users get used.

We address a lot of these issues in the 3 papers we wrote on the "Limits to Freeconomics" but the essential lessons are these:

- There is no free lunch, so if you can't see it on a Social Network then its you
- Your data may be free, but its everywhere in change.
- Caveat Emptor, especially if its Gratis

QED.