We seldom see incremental trade-offs offered between privacy and other qualities in online services. Many markets are dominated by large firms offering services for "free" and in exchange for personal data. There are less popular offerings in the other extreme, providing privacy and anonymity in exchange for lower performance and convenience. Offerings in between the two extremes are not common, despite post-Snowden surveys showing that a third of consumers find privacy very important. The absence of services to fill this market gap is puzzling. I hypothesize that a number of fundamental economic reasons make it hard for commercial, privacy-enhanced services to compete with the two extremes on scale. These include: difficulty in trusting privacy claims, the usefulness of data in designing and securing services, network effects, and the high value of targeted ads. In economic terms these induce market failures and if proven have regulatory consequences, for instance with regards to competition law. I am embarking on new research in this area, and would like to present the idea to privacy enthusiasts, coders, and entrepreneurs producing privacy-preserving services to receive input for my research.
Hadi Asghari is an assistant professor at Delft University of Technology in the Netherlands and a visiting fellow at Princeton's Center for Information Technology Policy (CITP) starting this fall. His research focuses on the economics of cybersecurity and online privacy. Prior to moving to the Netherlands, he worked as a software and network engineer in Iran.