Nikita Munjal is a 3L JD/MBA Candidate at Osgoode Hall Law School. This article was written as a requirement for Prof. Pina D’Agostino’s IP Intensive Program.
Using the Internet inevitably requires consenting to have your personal information used, collected, and disclosed by the websites you visit. A common reason for individuals, corporations, and non-profit organizations to collect your personal information is to influence your behaviour online, from your voting habits to your mental health. One of the most effective ways to influence consumer behaviour online is through targeted advertising.
Value for Advertisers
Access to personal information has become necessary for advertisers to convert potential leads into customers. Think back to 2012, for example, when a New York Times article suggested that a statistician working at Target predicted a teenage girl’s pregnancy based on her shopping habits. What did Target do with this information? It mailed her coupons for baby clothes and cribs.
Studies reveal that the value of your personal information to advertisers depends on various factors. Factors influencing value include your gender, race, and sensitivity of the information (that is, health records cost more than emails). If, for example, the target audience for a new sneaker launch is young males of middle eastern origin, the $1.80 spent to acquire your personal information is a minor investment to incur to influence you to purchase $180 sneakers.
Value for Users
Traditionally, users have valued the ability to share their personal information while using online services, like search engines or social media platforms, citing their desire to receive personalized advertisements.
However, increasingly, more users are becoming guarded about sharing their personal information. This trend has mobilized startups in Silicon Valley to appeal to privacy-conscious users by providing them an incentive to share their personal information. Known as paid-to-surf models, companies in this space require their users to install browser extensions to track their browsing.
What monetary value do some privacy-conscious users demand to share their personal information? $20 a month for users of OzoneAI Inc. Others are content with receiving points to trade for rewards. While these paid-to-surf models have the potential to be disruptive, they are not yet a viable alternative, as users must surf a certain amount before they can cash out.
Value Going Forward
The tech industry has built empires based on collecting, using, and selling its users’ personal information to third-party advertisers. Surprisingly, some factions of the tech industry are modifying their business models to limit the tracking of personal information. Apple, for example, introduced a new iOS in 2021, allowing its users to opt-out of having their activity tracked by advertisers. Similarly, Google’s announcement to phase out user-tracking technology on its Chrome browser is estimated to impact millions of advertisers.
Apple and Google argue that these changes are necessary to respond to increasing regulation and customer sensitivity to sharing personal information (the IPilogue has documented increased regulation in the EU and Canada). However, others, including Germany’s competition watchdog, lament that the changes are veiled anti-competitive practices.
Interestingly, increasing barriers to the online advertising ecosystem may benefit users. If access to personal information becomes impeded, interested parties may need to incentivize users to share their personal information, increasing users’ bargaining power. Although it is unclear what effect Apple and Google’s changes will have on the ecosystem, I am hopeful that users can leverage more control over their personal information for fair compensation by technology companies or advertisers for their valuable commodity.