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Do Privacy Notices Matter? Comparing the Impact of Violating Formal Privacy Notices and Informal Privacy Norms on Consumer Trust Online

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  • Kirsten Martin

Abstract

While privacy online is governed through formal privacy notices, little is known about the impact of privacy notices on trust online. I use a factorial vignette study to examine how the introduction of formal privacy governance (privacy notices) impacts consumer trust and compare the importance of respecting informal privacy norms versus formal privacy notices on consumer trust. The results show that invoking formal privacy notices decreases trust in a website. Further, violating informal privacy norms negatively impacts trust in the website even when the information exchange conforms to or is not mentioned in the privacy notice. The results suggest that respecting privacy norms is key to trust online and challenge the reliance on privacy notices to maintain consumer trust. The consumer, who is the exchange partner most vulnerable to information asymmetries and uncertainty, is not a party to the development of the formal privacy contract and instead relies on informal privacy norms.

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  • Kirsten Martin, 2016. "Do Privacy Notices Matter? Comparing the Impact of Violating Formal Privacy Notices and Informal Privacy Norms on Consumer Trust Online," The Journal of Legal Studies, University of Chicago Press, vol. 45(S2), pages 191-215.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/688488
    DOI: 10.1086/688488
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    References listed on IDEAS

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    Cited by:

    1. Jane Andrew & Max Baker, 2021. "The General Data Protection Regulation in the Age of Surveillance Capitalism," Journal of Business Ethics, Springer, vol. 168(3), pages 565-578, January.
    2. Pieter T. M. Desmet & Franziska Weber, 2022. "Infringers’ willingness to pay compensation versus fines," European Journal of Law and Economics, Springer, vol. 53(1), pages 63-80, February.
    3. Tae Wan Kim & Alan Scheller-Wolf, 2019. "Technological Unemployment, Meaning in Life, Purpose of Business, and the Future of Stakeholders," Journal of Business Ethics, Springer, vol. 160(2), pages 319-337, December.
    4. Omri Ben-Shahar & Lior Jacob Strahilevitz, 2016. "Contracting over Privacy: Introduction," The Journal of Legal Studies, University of Chicago Press, vol. 45(S2), pages 1-11.

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