Regulation won't stop privacy invasion, says HBS professor John Deighton. What will? What if companies paid us to use our identity? A market approach to privacy problems.
It's a startling idea: Instead of relying on regulators to protect our privacy against telemarketers, data miners, and consumer companies, we should capitalize on the value of our personal information and get something of value in return.
That is the idea put forward by HBS professor John Deighton in a recent working paper, Market Solutions to Privacy Problems? And what would consumers get in return for their personal information? Money perhaps, or price discounts, better customer service, maybe products tailored specifically to their needs.
His point: The information that is gathered about you by stores, researchers, and credit agencies belongs to those companies, not to you. They in turn resell that information to others. So if our personal information is such an asset, shouldn't we benefit from our asset as well? Why shouldn't intelligent consumers sell their identities to stores they trust? And wouldn't those trusted stores in return be motivated to use that information wisely?
“The challenge is to give people a claim on their identities while protecting them from mistreatment,” says Deighton. “The solution is to create institutions that allow consumers to build and claim the value of their marketplace identities, and that give producers the incentive to respect them.”
We asked Deighton to elaborate on his ideas. [Privacy Digest]