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Tech & Sourcing @ Morgan Lewis


As lawmakers, policymakers, tech companies, and other data collectors try to determine how much access and control of consumer data is appropriate or acceptable, and how much notice and choice consumers should have, consumers will ultimately be the arbiter of such access and use.  

A recent New York Times article discusses the efforts of lawmakers to require internet companies to be more transparent with consumers regarding the data collected and the specific value associated with such data. The article goes on to say there is a growing sentiment that the imbalance of power between internet companies and consumers vis-à-vis the value of the data collected, and that consumers should know and benefit from the true value of the data they provide by utilizing the services.

It has never been a secret that if an internet service is “free” (e.g., Instagram), the user (and the user data) is the product. Is it an even trade? Does it matter if it’s an even trade, as long as the consumer is willing to provide it in exchange for access to the service? If the services are essentially free to use, converting the data into value for the internet company is keeping the services up and running for the consumer. Regardless of transparency, it remains to be seen whether clearly providing additional detail regarding the use and value of the data would stop consumers from agreeing to provide the data in exchange for using the services.

In order to comply with US privacy laws, the best practice for privacy policies has long been to “say what you do, and do what you say you do.” Based on this construct, even if a privacy policy is more permissive than restrictive, as long as a service provider is transparent about the data collected and how they use that data (subject to compliance with law), they are compliant and considered transparent. As data has become more connected and, therefore, more valuable, being truly “transparent” may require more detail.

As discussed in this article, notwithstanding a service provider’s collection and use of data, or their transparency about what they do with the data and its value, as long as consumers desire to use the services internet companies offer (especially if the services are free), or if a majority of consumers are willing to forgo their social media habits (and the use of related services) in order to prove a point, they will ultimately have to agree to the terms governing such access and use as dictated by the service providers.