Abstract
Firms’ privacy protection strategies are affected by multiple factors. This study adopted a configurational perspective to examine how regulation policy environment, market structure, and the heterogeneity among enterprises affect their privacy protection policies. Using a fuzzy set qualitative comparative analysis of Chinese listed platform enterprises, we found that three configuration conditions were associated with enterprises formulating a privacy policy with a high level of protection and two configuration conditions were associated with enterprises formulating a privacy policy with a low level of protection. The results showed that privacy protection laws were a necessary condition to ensure that enterprises actively exercised privacy protection. Coordinated regulation systems based on the Personal Information Protection Law and industry standards are recommended as the best practice to safeguard privacy protection in China. As lack of competition can result in two polarized privacy protection strategies, regulatory policies should emphasize the balance between data protection and encouraging necessary data sharing. Furthermore, the conjunctive effect between market structure and business models affected privacy policy formulation, which suggests that the positive effects of users’ rational choices in a competitive market should be further reinforced.
Highlights
In the digital economy, personal data are an important resource and strategic asset for an enterprise and a necessary investment for platform operation and business model innovation. e collection and commercial application of user data has boosted the quality and innovative development of online platforms
Referring to the standard approaches to QCA, each input condition was tested individually to see if it was necessary for the formulation of a user privacy protection policy. en, the configuration conditions with the highest explanatory power were identified
A necessary condition was defined as a condition that was required for a given outcome to occur with a consistency level greater than 0.9 [31]
Summary
Personal data are an important resource and strategic asset for an enterprise and a necessary investment for platform operation and business model innovation. e collection and commercial application of user data has boosted the quality and innovative development of online platforms. The value of data has propagated the malicious collection and excessive use of private data, raising an important issue that affects both user privacy and the healthy development of the digital economy. Erefore, privacy protection on digital platforms has become an important topic in regulatory policies for managing the digital economy. As the privacy protection decisions of platform enterprises are driven by various factors, research on the endogenous mechanisms behind such decisions is beneficial for governments formulating corresponding incentive-based regulatory policies. Shapiro [2] and Mai et al [3] asserted that when the level of privacy protection becomes an influential factor for online transaction decisions, businesses that have implemented such protection have a competitive advantage over those that have not. User demand for privacy protection has subsequently become a dimension of purchase decisions and another motivator
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