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Privacy concerns threaten e-economy, says Ovum

Data abuse driving consumers to withhold personal data from Internet companies

Privacy concerns threaten e-economy, says Ovum
Consumers are becoming increasingly concerned that internet companies are not treating their data properly.

The Internet economy is at risk of serious setback due to declining consumer confidence that their personal data will be treated properly.

Analyst company Ovum says that its latest research shows incidents such as WhatsApp forcing access to user's address books, and ongoing concerns around Facebook and Google's privacy policies, is undermining trust in Web companies, and leading to many consumers looking to tighten control of their data.

Ovum's Consumer Insights Survey showed only 14% of respondents believe that Internet companies are honest about their use of consumers' personal data. The survey also showed that 68% of respondents would use ‘do-no-track' features, if they are easily accessible, when interacting with Web companies, to prevent them from retaining and tracking data.

Mark Little, principal analyst with Ovum, said that Internet companies have taken customer's data for granted, and lost trust by failing to treat data privacy and protection properly.

"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 Little. "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."

The analyst warned that as frustrated consumers increasingly turn to data privacy tools to protect their information, and as governments look to greater online privacy controls, there is a risk that plans for targeted advertising, CRM, and big data analytics will be derailed by a ‘data black hole'. Online companies need to change consumers' perceptions, by providing their own privacy tools, coupled with messaging campaigns designed to convince consumers they can be trusted.

"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," Little added. "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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