Daily Archives: 2009-06-26

The Economics of Privacy in Social Networks

We often think of social networking to Facebook, MySpace, and the also-rans, but in reality there are there are tons of social networks out there, dozens which have membership in the millions. Around the world it’s quite a competitive market. Sören Preibusch and I decided to study the whole ecosystem to analyse how free-market competition has shaped the privacy practices which I’ve been complaining about. We carefully examined 45 sites, collecting over 250 data points about each sites’ privacy policies, privacy controls, data collection practices, and more. The results were fascinating, as we presented this week at the WEIS conference in London. Our full paper and complete dataset are now available online as well.

We collected a lot of data, and there was a little bit of something for everybody. There was encouraging news for fans of globalisation, as we found the social networking concept popular across many cultures and languages, with the most popular sites being available in over 40 languages. There was an interesting finding from a business perspective that photo-sharing may be the killer application for social networks, as this features was promoted far more often than sharing videos, blogging, or playing games. Unfortunately the news was mostly negative from a privacy standpoint. We found some predictable but still surprising problems. Too much unnecessary data is collected by most sites, 90% requiring a full-name and DOB. Security practices are dreadful: no sites employed phishing countermeasures, and 80% of sites failed to protect password entry using TLS. Privacy policies were obfuscated and confusing, and almost half failed basic accessibility tests. Privacy controls were confusing and overwhelming, and profiles were almost universally left open by default.

The most interesting story we found though was how sites consistently hid any mention of privacy, until we visited the privacy policies where they provided paid privacy seals and strong reassurances about how important privacy is. We developed a novel economic explanation for this: sites appear to craft two different messages for two different populations. Most users care about privacy about privacy but don’t think about it in day-to-day life. Sites take care to avoid mentioning privacy to them, because even mentioning privacy positively will cause them to be more cautious about sharing data. This phenomenon is known as “privacy salience” and it makes sites tread very carefully around privacy, because users must be comfortable sharing data for the site to be fun. Instead of mentioning privacy, new users are shown a huge sample of other users posting fun pictures, which encourages them to  share as well. For privacy fundamentalists who go looking for privacy by reading the privacy policy, though, it is important to drum up privacy re-assurance.

The privacy fundamentalists of the world may be positively influencing privacy on major sites through their pressure. Indeed, the bigger, older, and more popular sites we studied had better privacy practices overall. But the desire to limit privacy salience is also a major problem because it prevents sites from providing clear information about their privacy practices. Most users therefore can’t tell what they’re getting in to, resulting in the predominance of poor-practices in this “privacy jungle.”