People Don’t Understand the Purpose of Privacy Policies and Terms of Service –  New Research Published

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January 24, 2022

Any visit to a website, app download, purchase of a digital service, or use of new software involves legal policies. People typically encounter both a privacy policy and Terms of Use or Terms of Service (TOS/TOU) policy. But do they understand what functions these two types of policies serve? It seems they don’t.

In a recent study, we found that consumers, “Me-s” in our parlance, have wrong ideas about the purpose of the two different types of policies. Alarmingly, the majority of Me-s surveyed do not understand that a TOS/TOU document is a contract—i.e., a legal agreement.

Our research, led by Noreen Whysel, our Director of Validation Research, consisted of ethnographic interviews, focus groups, and an online survey of 566 individuals. We were initially tipped off by the surprisingly strong reactions of a few participants in our early-stage interviews and focus groups who vehemently denied that Terms of Use were contracts. Wanting to explore how pervasive this sentiment was, we surveyed 566 individuals through an online survey.

Key findings include:

  • Consumers are aware that legal policies exist on connected technologies and that they should read them, but they continue to choose to largely ignore them.
  • 55% of survey participants did not understand that a TOS/TOU agreement is a legal contract. This has significant implications because a key requirement for legally binding contracts is mutual assent, which means that both parties have a “meeting of the minds” and must understand they’re entering into a contract.
  • None of the interview participants were aware of tools that explain or rate privacy policies and TOS/TOU documents, and half said that a score would not change their behavior.
  • 66% of survey respondents believe that privacy policies protect the business, while 50% say they protect the consumer. It’s questionable that privacy policies protect either the individual or the business, as they are primarily legal notices, disclosures of how data is used by the technology and the companies behind it. Moreover, 39% of respondents erroneously thought that the privacy policy was a contract [between them and the company].

Read the results in our latest Spotlight Report: “Spotlight Report # 5: Consumer Perception of Legal Policies in Digital Technology.”

This research is one of several M2B Alliance validation studies to confirm and quantify the public’s desire for a safer, more respectful digital world. Stay tuned and become a part of the movement as we continue to conduct research that allows us to set standards to ensure human dignity in connected technology. Organizations and individuals interested in advancing standards in ethical data and mobile and internet practices are invited to learn more about our mission at this link.