This study provides a literature review conducted on behalf of Ofcom on personal data and privacy. It focuses on informed consent with respect to online services. The study discusses (1) the role of informed consent in privacy law, (2) the role of informed consent in practice and (3) potential ways to improve informed consent in practice. Furthermore, the study investigates the impact of the Internet of Things on these three major issues.
The literature review reveals that consumers rarely read terms and conditions at all. If they read them, they usually have difficulty understanding them. It is equally difficult if not impossible for consumers to understand the consequences with respect to personal data processing. Also the study finds that consumers can hardly evade online tracking, but they cope with the effects. Such coping strategies may be effective to avoid the visible effects of online tracking such as targeted advertising, but do little to resolve the tracking itself.
These findings are surprising in light of the fact that consumers have a very high stated concern for data privacy. Our findings underscore that, in practice, consumers appear to invest very little time and effort into understanding what data is tracked by websites and online services. Insights from behavioural economics and in particular experimental studies as identified in this study can explain some of the reasons behind this observed consumer behaviour. More importantly, they also indicate potential ways to mitigate it. Context-aware nudging has emerged as a promising approach from the literature. However, nudging cannot solve all issues around informed consent at once.
It seems that a single solution for all – or at least most – issues is yet to be found. Thus, more research appears to be necessary. Such research could investigate the extent to which a multi-faceted approach involving several factors in combination might offer potential solutions. Future research could address the phase of the consumer information process before they even come in contact with terms and conditions, namely when they become aware that there is an issue at all. Another potentially promising avenue for future research may be to learn from other disciplines that already have solutions to make informed consent work such as clinical research.
The study discusses this example in detail and is available for download.
