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The impact of 'free' digital offers on individual behavior and its implications for consumer and data protection laws

Project description

The hidden data cost of ‘free’ online offers

European Union data protection rules guarantee personal data protection. These rules apply to both companies and organisations in the EU and those based outside the EU who offer goods or services in the EU, such as Facebook or Amazon. What about services and products offered online for free, but in exchange for personal data? The EU-funded FreeDigital project will investigate whether these types of offers distort consumer decisions about entering into a transaction and sharing their personal data. The project will conduct an online experiment to measure consumers’ decisions and behaviour in various realistic situations.

Objective

Many online services and products are offered ‘free’ of charge but in exchange for personal data. Research shows that consumers overvalue the benefits and undervalue the non-monetary costs of zero-price products. Yet, it remains unknown whether offering ‘free’ digital content in exchange for personal data distorts consumer decisions about 1)entering into a transaction, 2)sharing personal data, and 3)enforcing contractual and data protection rights. These questions are important because digital content, even this for ‘free’, might involve certain hazards. For instance, it might be defective causing detriment to its users or consumers’ personal data might be misused. In this project, I will provide evidence on consumer reactions to digital content offered at a zero price by conducting online experiments, in which individuals will perform a real effort task and decide whether to use an application that can help them solve the task. This application will be offered in a premium and a cheaper basic version supplied in exchange for personal data. In separate treatments, I will manipulate the price of the two versions - decrease the price of the basic version from a small amount to zero and change the price of the premium version accordingly. I will observe whether reducing the price of the basic version to zero influences participants choices on which application to use and whether to provide personal data in exchange. I will further introduce a failure in the basic version and measure whether participants complain and request deletion of their personal data depending on the price of the application. Next, I will test whether interventions proposed by legal scholars (e.g. informing users that their personal data constitute counter-performance) change these decisions. Finally, based on these data I will develop arguments contributing to legal discussions in consumer and data protection law and suggest solutions that will improve consumer welfare and privacy protection.

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MSCA-IF - Marie Skłodowska-Curie Individual Fellowships (IF)

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Call for proposal

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(opens in new window) H2020-MSCA-IF-2018

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Coordinator

UNIVERSITEIT MAASTRICHT
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 281 358,72
Address
MINDERBROEDERSBERG 4
6200 MD Maastricht
Netherlands

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Region
Zuid-Nederland Limburg (NL) Zuid-Limburg
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 281 358,72
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