Consumer Attitudes towards Firms that Monetize Personal Information: A Cluster Analysis and Regulatory Implications

The EU is seeking to develop new regulatory frameworks for online privacy. This entails a complex set of tradeoffs, since regulatory policy must be informed by consumers' preferences, and if regulatory policy contravenes consumer preferences, regulators might need to explain the hidden sources of harm to consumers. To increase our understanding of consumers' attitudes towards firms that monetize privacy, we surveyed 1693 individuals from Denmark, France, Germany, the UK, and the USA about Google. Our cluster analysis confirms the privacy paradox-although consumers disapprove of Google's practices, they still use it-in four out of five clusters but indicates two different explanations: some consumers cannot locate a viable alternative, whereas others lack the information needed for their privacy calculus. We explore regulatory implications and draw upon the theory of newly vulnerable markets to discuss whether market entry may be feasible.