54 Pages Posted: 15 Aug 2013 Last revised: 14 Aug 2014
Date Written: September 24, 2013
This article emphasizes the broad consumer harm from the extraction of personal user data deployed by Google and many other online companies for the benefit of their advertisers. With firms knowing far more about consumers than those consumers know about their options in the marketplace, rising information asymmetry in markets like search advertising is translating into rising overall economic inequality in the economy as well.
The lack of competition in search means users of Google in particular have little chance of receiving the full economic value of the personal data they provide Google. Without viable alternatives to Google, you therefore end up with a stunted "market" for valuing user privacy, so Google feels less and less compunction about violating personal privacy to benefit its advertising customers. More broadly, the deeper harm to consumers from Google’s power in the market — and one that is at the heart of the increasing economic equality in our society — is the way profiling by Google of its users for advertisers allows the kind of price discrimination and predatory marketing we saw in the subprime housing bubble globally and in a range of other sectors.
Suggested Citation: Suggested Citation
Newman, Nathan, The Costs of Lost Privacy: Consumer Harm and Rising Economic Inequality in the Age of Google (September 24, 2013). WILLIAM MITCHELL LAW REVIEW, Volume 40, Issue 2, 2014. Available at SSRN: https://ssrn.com/abstract=2310146 or http://dx.doi.org/10.2139/ssrn.2310146
By Ryan Calo