July 2, 2018

Discounts for data? California’s internet privacy law, the strictest in the country, has far-reaching implications

Karthik Kannan Karthik Kannan Download image

WEST LAFAYETTE, Ind. — California’s new internet privacy law, deemed one of the strictest so far in the United States, could result in a business strategy which offers discounts in exchange for user data.

The law, which takes effect in 2020, gives residents the right to know what data is collected by companies like Google and Facebook and to request their information not be sold to third parties.

 “The natural response to this law from companies will be to have users consent for their data to be shared in return for discounts,” said Karthik Kannan, the Thomas Howatt Chaired Professor in Management at Purdue University and an expert in data analytics. “Because we are dealing with information, there are still some open-ended issues. If a user changes their mind and does not want discounts anymore, what happens to his or her past information that was sold?”

The legislation likely will set a precedent for data collection and information security across the U.S., as well as the world, said Kannan, who studies how companies can leverage big data while balancing privacy concerns.

“Companies such as Google and Facebook are unlikely to retain a separate set of policies for customers in California versus the rest of the country,” he said. “The U.S. as a whole might start seeing improvements in data protection reminiscent of the fuel emission standards California imposed in the past. Because they were the tightest in the nation, it led to auto companies producing fuel efficient cars for everyone. In similar regards, this law could be hugely influential.” 

Writer: Joseph Paul, 765-494-9541, paul102@purdue.edu 

Source: Karthik Kannan, 765-494-3414, kkarthik@purdue.edu

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