While emerging technologies often arrive on what Gartner has described as a hype cycle (even the marketing research industry has its own research hype cycle), a new report has identified a “corollary” not as well-recognized and “far more pernicious”: the panic cycle that starts “when privacy advocates make outsized claims about the privacy risks associated with new technologies.” As Daniel Castro, one of the report’s authors and VP at the Information Technology and Innovation Foundation (ITIF), explained, “in the Internet era, fear makes great clickbait” and the privacy panic cycle causes a “frenzy” of concern that can impede or kill innovation.

Not that the privacy panic cycle is really new. American consumers originally feared the privacy infringement of photography when it first arrived, but “society adapts” over time to new technologies – or consumers reject them.

Understanding and countering consumer technophobia

Castro discussed the new ITIF report with a panel of presenters in Washington, DC, on September 10.

Adam Thierer, senior research fellow at the Mercatus Center at George Mason University, concurred that consumers adapt to new technologies over time. “Familiarity with technology breeds acceptance and eventual comfort,” he said, noting that the biggest concerns he ever encounters about the privacy threat of social media usually originate from people who have never used social networking tools or sites.

Most of the technology consumers use today were “deeply distrusted” earlier in history, according to the ITIF report, “including telephones, toll roads, loyalty cards, cameras, RFID cards, and even computers.” However, when companies and their products cross the line from cool to creepy, their technology may end up in the scrap heap.

Carl Szabo, policy counsel at NetChoice, said that companies need to get out ahead of the privacy panic cycle. A key way to do that, according to Morgan Reed, executive director of the Association for Competitive Technology (ACT), would be to focus on educating average consumers about how the data ecosystem works. When a consumer gets an annoying phone call where the caller knows seemingly-private things about the consumer, the consumer doesn't have a clue about all the pathways of data-dropping the consumer followed that landed them in that situation. Reed suggested that companies have work to do to bring consumers up to speed.

Occam's broom

At the same time, Szabo saw an “opportunity” for privacy activists to “try to figure out what is going on” with a new or emerging technology, such as facial recognition or mobile apps, “rather than doing this race to regulation, instead try to figure out what is going on.” Go talk to the companies developing or selling the technology so that you can educate consumers, he suggested to privacy activists, “instead of just calling the Washington Post” and raising the privacy alarm.

Instead of using Occam’s razor to understand emerging technologies, Szabo lamented that many privacy activists default to “Occam’s broom: taking the simplest explanation [that a company wants to provide something innovative for consumers] and then sweeping it under the rug.”

“Poll numbers alone are not justification for privacy policymaking”

Of particular interest to survey, opinion and marketing researchers, Castro warned about the pernicious use of opinion polling to bolster claims for privacy regulation. For example, the Federal Trade Commission (FTC) staff report on the Internet of Things noted a survey showing that “87% of consumers are concerned about the type of data collected through smart devices.”

“Poll numbers alone are not justification for privacy policymaking,” Castro said, because “it is not surprising people will have concerns if we tell them to have concerns.”

Reed wagered that privacy concerns never completely go away, either. A general population poll, he suggested, asking questions about consumers privacy fears about ordinary cameras, would probably find a sizable percentage of respondents still expressing such fears. Reed pointed out that consumers haven’t stopped being concerned; they have simply seen and accepted the risks involved with the technology because the benefits are enough to outweigh the risks.

Most importantly, noted Szabo, “Having a concern about data is very different than demanding an onerous regulatory regime,” which is the leap often made by many privacy activists and policymakers when they look at such surveys.

Following the privacy panic cycle

The ITIF report, “The Privacy Panic Cycle: A Guide to Public Fears About New Technologies,” identified four key points in the privacy panic cycle (illustrated in the graphic atop this article):

  1. Trusting Beginnings: The “technology has not been widely deployed and privacy concerns are minimal. This first stage ends when privacy advocates raise alarms.”
  2. Rising Panic: The news media, “policymakers, and others join the privacy advocates to further spread concern until fears hit their peak” of hysteria.
  3. Deflating Fears: "As the public comes to better understand the technology and its benefits, the panic starts to dissipate” as consumers gain practical knowledge and experience with the technology.
  4. Moving On: “The vast majority of consumers no longer believe the privacy claims espoused by the privacy advocates because they understand the technology, appreciate its benefits, and no longer fear its misuse.”

How companies should protect privacy

While panelists and audience members discussed how best to handle privacy and consumer concerns about it, Thierer emphasized that “there is no goldilocks formula where everything is right” in privacy control and settings for consumers. It takes experimentation and innovation, and will require significant consumer involvement and feedback to even come close.

On the bright side, that should mean an ever-present need for research.