Simplification of Privacy Disclosures: An Experimental Test

Abstract

Simplification of disclosures is widely regarded as an important goal and is increasingly mandated in a variety of areas. In the area of data privacy, lawmakers and interest groups developed “Best Practices” techniques to help consumers understand how firms collect and use personal information. Commentators have even advocated going a step further and using simpler disclosures — warning boxes that alert consumers to the least expected elements. But do these techniques succeed in better informing consumers or preventing unwise behavior? To answer this question, we engaged a leading market research firm to conduct a survey on risky sexual behaviors while randomizing the format of the privacy disclosures provided to the respondents. The results of the experiment suggest that best practices simplification techniques and warning boxes do not have the intended effects. We find little or no change in respondents’: (1) comprehension of the disclosure; (2) willingness to share personal information; and (3) expectations about their rights. Our results challenge the wisdom of focusing regulatory effort on simplifying disclosures.