The consumer data privacy paradox

Companies have an opportunity to build trust with consumers by providing options and autonomy around data

More than 40% of US consumers don’t trust online services to protect their data. Companies that focus on consumer autonomy, choice, and a privacy-first approach may gain an advantage.

In our hyper connected society, there exists an apparent privacy paradox: Consumers say they want more data privacy but tend not to take the necessary steps to adequately protect their data.1 This perceived lack of action has led some companies to believe that most people simply don’t see data privacy as a big deal. But do consumers really have much actual agency? Is it easy for them to take action, or are there barriers blocking the way?

Recent findings from Deloitte’s Digital Media Trends report,2 which surveyed more than 2,000 US consumers about their behaviors and attitudes related to digital media and technology, sheds some light on the paradox. Less than half (47%) of consumers say that they trust the online services they use to protect their data, signaling a desire among some for more data privacy. The survey also uncovered that although many are attempting to protect their data, none of the 15 different common data protection steps listed in our survey has been taken by a majority of consumers.

Why aren’t more consumers taking more of these protective steps? Sometimes taking action may be easier said than done. Some things, such as using VPNs or encrypted messaging apps, may be difficult for the average user. The often-technical language of privacy notices, and the hurdles required to change privacy settings or opt out of data collection, can be confusing and onerous and, once implemented, damage the user experience. Additionally, a lack of viable marketplace alternatives can reduce consumer choice: Users must agree to data collection and tracking by companies or risk missing out on optimized experiences or services. There isn’t much direct competition among many of these services and companies, and the biggest firms benefit from network effects and a “self-reinforcing data advantage.”3

Nevertheless, when consumers are given real and simple options, they look to exert more control around how companies collect and use their data. Early data from Apple’s recently released App Tracking Transparency feature4—which lets users easily control whether individual apps are allowed to track them across other companies’ apps and websites—revealed that US users chose to opt out of tracking fully 96% of the time.5 It appears that consumers will take steps to protect their privacy when they have easy-to-implement options. This aligns with a sentiment that has been evident in our research since 2018.6

Some consumers would consider paying for more control over their privacy: According to Deloitte’s Digital Media Trends survey, 57% of consumers said they would be willing to pay for the ability, or a service, to view and potentially delete the personal data that companies collect on them, and 45% would be willing to pay to access a social media platform if it agreed not to collect their personal data.7

In the future, will companies or governments offer consumers even more accessible alternatives regarding data privacy and usage? Will more companies step in to serve consumers who are willing to pay to keep their data private? Could this prove to be a market disruption?

Takeaways for TMT executives

1. Invest more in first-party data. Take time to understand what customers are willing to share with you. With the demise of third-party cookies, executives should review their strategies and think about the value exchange with their customers and work to gain and improve their trust.
2. Adopt a privacy-first, future-proof approach. Regulators are examining the issue of consumer privacy globally and looking to address it through government action. Will your companies’ consumer privacy and data collection standards hold up?
3. Make privacy offerings value-driven services. Attract and retain customers by offering more options to manage their data privacy and provide greater overall transparency. Look for opportunities to treat privacy services as revenue generators rather than extra costs.