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February 6, 2013

Trouble ahead for the internet economy

More than two thirds of consumers say “no” to online tracking.

By Tineka Smith

Many consumers around the globe are becoming more cautious about their personal data being collected when on the internet.

According to Ovum this is creating a threatening scenario for the internet economy as more people are looking for tools that help them remain untraceable online.

Ovum’s recent consumer insights survey revealed that 68% of consumers across 11 couuntires would select a "do not track" (DNT) feature if they could easily select the option.

Ovum predicts that this consumer attitude could mean a data "black hole" could open up under the web economy.

Stricter regulation could also strangle personal data supply and have a significant impact on targeted advertising, CRM, data storage, big data analysis and other related industries.

"Unfortunately, in the gold rush that is big data, taking the supply of ‘little data’ – personal data – for granted seems to be an accident waiting to happen," said Mark Little, principal analyst at Ovum. "However, consumers are being empowered with new tools and services to monitor, control, and secure their personal data as never before, and it seems they increasingly have the motivation to use them."

Last year the EU justice commissioner, Viviane Reding announced new proposals to give users control over their personal data.

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The proposal will give internet users ‘the right to be forgotten’ and means companies must delete user data by those who request it.

The data proposal will also heavily penalise companies for data breaches with fines up to €1 million or 2% of the company’s global annual turnover.

Data privacy scandals and issues over data use policies by Facebook and Google have increased consumer concerns about their personal data.

Ovum’s study found that only 14% of consumers believe that internet companies are actually truthful about their use of consumer’s personal data.

Ovum says that it will be a challenge for internet companies to change consumer perceptions about how their data is being used.
The analyst firm suggests companies introduce new privacy tools and campaigns to show consumers that they can be trusted. Improving the transparency of data collection will also help build trust.

"Internet companies need a new set of messages to change consumers’ attitudes. These messages must be based on positive direct relationships, engagement with consumers, and the provision of genuine and trustworthy privacy controls," added Little. "Most importantly, data controllers need a better feel for the approaching disruption to their supply lines, and must invest in tools that help them understand the profile of today’s negatively-minded users – tomorrow’s invisible consumers."

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