Yonkers, NY – American consumers are increasingly concerned about privacy and data security when purchasing new products and services, which may be a competitive advantage to companies that take action towards these consumer values, a new Consumer Reports study finds. 

The new study, "Privacy Front and Center" from CR's Digital Lab with support from Omidyar Network, looks at the commercial benefits for companies that differentiate their products based on privacy and data security. The study draws from a nationally representative CR survey of 5,085 adult U.S. residents conducted in February 2020, a meta-analysis of 25 years of public opinion studies, and a conjoint analysis that seeks to quantify how consumers weigh privacy and security in their hardware and software purchasing decisions. 

“This study shows that raising the standard for privacy and security is a win-win for consumers and the companies,” said Ben Moskowitz, the director of the Digital Lab at Consumer Reports. “Given the rapid proliferation of internet connected devices, the rise in data breaches and cyber attacks, and the demand from consumers for heightened privacy and security measures, there’s an undeniable business case for companies to invest in creating more private and secure products.” 

Here are some of the key findings from the study:

• According to CR’s February 2020 nationally representative survey, 74% of consumers are at least moderately concerned about the privacy of their personal data.
• Nearly all Americans (96%) agree that more should be done to ensure that companies protect the privacy of consumers.
• A majority of smart product owners (62%) worry about potential loss of privacy when buying them for their home or family.
• The privacy/security conscious consumer class seems to include more men and people of color.
• Experiencing a data breach correlates with a higher willingness to pay for privacy, and 30% of Americans have experienced one.
• Of the Android users who switched to iPhones, 32% indicated doing so because of Apple’s perceived privacy or security benefits relative to Android.

“While the need for change in the tech sector is high and solutions are complex, this study presents startups and investors with strategic ways to harness innovation, raise standards, and gain consumer trust,” said Jesús Salas, responsible technology associate with Omidyar Network. “Individuals are ready and willing to prioritize privacy and security. And while these features should not be turned into an out-of-reach luxury good, there is ample opportunity for first-movers to differentiate and capture market share or leverage consumer’s willingness to pay in the short-term. This window of opportunity closes, however, as regulation catches up with the needs of individuals and society so innovators should act swiftly.”

CR recently launched an updated and expanded website for the Digital Standard with Omidyar Network joining as a strategic partner. The Digital Standard is an evolving, open source framework used by independent testing organizations, researchers and product teams to evaluate how technologies respect consumers’ privacy and security interests. It serves as a resource for companies looking to implement and take action on stronger privacy and security, as well as ownership and governance. 

MEDIA CONTACTS:
Cyrus Rassool, Consumer Reports, cyrus.rassool@consumer.org
Abi Weaver, Omidyar Network, aweaver@omidyar.com