Perhaps the most common activity on the internet today is mindlessly agreeing to terms of service (ToS). We’ve all been there. If you have ever signed up for new services at websites like Google, Facebook, Uber, or Amazon, the odds are that you agreed to the terms without reading any of them.
If you feel some sense of embarrassment to admit it, you shouldn’t. You’re not alone. Some of the greatest minds in America sign contracts without reading them. Chief Justice John Roberts doesn’t bother with them. Judge Posner signed a home loan without reading anything.
There have also been some recent efforts to visually demonstrate the excess of pages that would need to be sifted through. Last spring, Joanna Stern at the Wall Street Journal pointed out that she could cover the length of a football field using the printed privacy policies of the apps, services, and operating systems she most regularly uses.
There is some growing concern about whether or not tech companies can sustain this status quo. The New York Times, for example, published what may feel like a stinging critique. In an editorial titled “How Silicon Valley Puts the ‘Con’ in Consent,” it strikes at the heart of the current data privacy debates: the legal fiction of consent. “If no one reads the terms and conditions,” it asks, “how can they continue to be the legal backbone of the internet?”
What’s really at the center of most of the recent kerfuffles isn’t that companies are abusing user data. Instead, people are shocked, confused, and sometimes outraged to discover what they’ve agreed to. After all, Mark Zuckerberg and Jeff Bezos aren’t exactly available to answer the average person’s questions about what their privacy policies are.
Even if we could negotiate our own privacy policies, it’s unlikely most of us would. While there’s certainly an active (and loud) group of internet users that are worried about current data privacy practices, the average internet user doesn’t seem concerned at all.
For example, a survey of Facebook users in the fall of 2018, as privacy-related stories were breaking daily, indicated that two-thirds of respondents were logged on at least as much as they were in 2017. Moreover, Facebook continues to add daily active users and monthly active users in the US and Canada have also continued to increase over the past two years.
So, why aren’t people more concerned?
James Cooper, now the current Deputy Director for Economic Analysis at the Federal Trade Commission, weighed in on this in 2016:
Lior Strahilevitz and Matthew Kugler, from the University of Chicago and Northwestern University respectively, put this concept in context. By looking at Facebook’s use of facial recognition software and Google’s text analysis of its users’ emails, they show that two-thirds of users were unwilling to pay anything to avoid the practice. It’s not that consumers don’t care that they traded some of their information for free email and an easy way to stay in contact with old friends. Instead, they simply value those services at greater levels than the information they trade for the platforms they use.
Consider this, in Strahilevitz and Kugler’s work even the third of consumers who were willing to pay to avoid those practices by Google and Facebook were only willing to pay four cents a day — that’s only $15 a year.
This is why understanding rational ignorance on the part of consumers so important. Just like looking for a new toothbrush, or Judge Posner getting a loan, if individuals view the value of the information less than the cost of acquiring it, they won’t go searching for that information. This doesn’t necessarily indicate a market failure in data privacy, as I previously outlined. It just means that consumers value the services tech companies provide more than they value keeping some information private. After all, if the average consumer only values their privacy at $.04 a day in some instances, even a quick glance at the ToS is likely already more costly than it’s worth.
Moreover, instead of presumed preferences, consumer actions should basis for the privacy protections that The New York Times editorial board calls for. While people claim to care very deeply about their privacy, their actions tell a different story. If we built national policy around our stated (rather than our revealed) preferences, we could inflict significant costs on society with little benefit.
This is not to say that everyone doesn’t care deeply about their privacy. DuckDuckGo exists for a reason. And when people feel unsatisfied with how a particular platform protects their privacy, they leave. For example, Google searches over the past year for “how to delete facebook account” seem to track the recent scandals. However, it is worth noting that, throughout the year, it remained a relatively unpopular search.
There is another important aspect of the current data privacy scandals worth mentioning. Rational ignorance provides one explanation for much of the recent outrage around data privacy. Perhaps the clearest example of this is the recent reporting that Facebook was allowing companies like Spotify and Netflix to access private messages. While the outrage ensued over the news, there was an easy and innocent explanation for the access that was given. Yet, like agreeing to a platform’s ToS, when the benefits of being outraged outweigh the costs of being fully informed, rest assured you see a good amount of ignorance.
Current data practices may be built on rational ignorance, and while it causes problems from time to time, it is far from a reason to call for massive changes to the way the internet operates.
CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.