Online shoppers will pay more for data privacy

Protecting personal information encourages web users, study shows

People will pay more for privacy

People will pay more for goods if online retailers can show they are doing a good job at protecting customer data and privacy, according to a new US study.

The Carnegie Mellon University survey suggests that people will pay as much as 60 cents (30p) extra on a $15 (£7) purchase if they are happy with a retailer’s privacy policy.

The study used a shopping search engine to automatically evaluate web sites’ privacy policies and examine shoppers' reaction on learning how their personal data was used.

Consumers are concerned that online retailers could misuse credit card data, send spam to their email address or violate privacy, says report author Lorrie Cranor. But many fail to protect their privacy online and give up private data for lower prices.

‘Our suspicion was that people care about their privacy, but that it is often difficult for them to get information about a web site’s privacy policies,’ she said.

‘People cannot act on information that they do not have or cannot understand.’

But by offering shoppers details about how data is used, the study found that shoppers would pay more at web sites with high privacy ratings.

The study used a tool called the Platform for Privacy Preferences (P3P) developed by the World Wide Web Consortium to make it easier for internet users to assess privacy policies. But only 20 per cent of e-commerce sites use the tool.