Monetization of privacy

Abstract

User data has become the fuel to major corporations’ marketing and customer acquisition practices. The past decade has seen major privacy breaches and public uproar due to the same. Some of the notable examples are Cambridge Analytica x Facebook, Aadhar data breach and LinkedIn data breach. Unveiling of such infringements has made the direct user whose data is being infringed upon, feel both helpless and comfortable with it, where the former drives the latter. Individuals have now accepted that their data is getting stored by multiple social media, eCommerce, net banking and even the cab-hailing platforms. Given this problem, we propose a way of data monetisation as a part of this paper. As per a 2013 paper on Price vs Privacy, the author discovers that even though individuals value their privacy and will prefer a privacy-friendly seller over a privacy-invasive seller, individuals value money more. Individuals are ready to compromise their privacy if the privacy-invasive seller is offering a cheaper product as compared to the privacy-friendly seller. Based on this study, we want to analyse and formulate a way to monetise the data of the customers while giving those who value privacy over price the opportunity to decline such a scheme, thereby maximising customer surplus by transferring some producer surplus to the customers. As a part of this exercise, we explore the concept of individual Privacy as a commodity. Something tradable at the expense of their service. This commoditisation will be very helpful for data mining companies as they would be able to describe a customer’s mindset effortlessly. When we enter any marketplace, it is not just the data we feed that gets into registers; it is also the idiosyncrasies that accompany the customer’s habit. These data points cannot be protected by law as these are mere observations and interpretations. With Privacy as a commodity, there is an option for the customer to gain from it. The customers' data is worth a lot of money to the right buyers. To understand this, we surveyed 121 number of people to understand their reservation prices for sharing their data with corporates. The findings of the research form the basis of the paper. We see brand/marketer onboarding and current data privacy regulation as major issues in our proposition. The awareness of the level of exposure individuals have is also variable across groups. Numerous people are unaware of the power of data and the granularity of data and the analytics around it. This may pose another problem in the wide-scale rollout and brand onboarding in the plan to monetize data. We have expanded on the work of multiple corporations in this space. The success of this proposition will influence almost all traditional sectors and shape how emerging sectors like Metaverse and Web 3.0 will operate. The pace at which Web 3.0 is expanding puts a lot of stress on exploring and formulating data monetization and that is what we have intended to do in this paper.