Consumers’ Online Institutional Privacy Literacy

Most people, in their daily lives, have a need for privacy – the need at times to left alone. Yet in the Internet age consumer readily reveal aspects of their private lives to a wide circle of contacts, most often via social media apps. Concurrently, big digital businesses such as Google and Facebook operate business models based upon lucrative income streams from the use and sharing of consumer’s personal data, a practice referred to as surveillance capitalism. This paper contrasts these two very different aspects of online privacy, social privacy and institutional privacy. The gathering of personal data on consumers is often portrayed by digital marketers and marketing academics as a commercial exchange between a consumer and firm, that is, the exchange of personal data for services or improved service. This exchange relationship has been portraying theoretically with reference to social contract theory and social exchange theory. However, this paper argues that to the extent consumers are not aware (a) what personal information is being taken from them, (b) what that information is used for, and (c) who that information is being shared with, then a social contract or social exchange does not exist. This issue of consumer’s online institutional privacy literary is a critical ethical question for the future practice of digital marketing. If consumers’ institutional privacy literacy is low, one can question if the gathering of personal data by digital business is accurately represented as a social contract, or if it is more accurately portrayed as an imbalanced exchange operating under conditions of information asymmetry.