Personal Information Markets and Privacy: A New Model to Solve the Controversy

Abstract

From the early days of the information economy, personal data has been its most valuable asset. Despite data protection laws, companies trade personal information and often intrude on the privacy of individuals. As a result, consumers become more and more irritated and concerned. They feel out of control and lose trust in electronic environments. Technologists, economists and regulators are struggling to develop solutions that meet businesses’ demand for more personal information while maintaining privacy. However, no promising proposals seem to be in sight. A vision of how internet economics can accommodate privacy is elusive. We would like to break this helpless cycle and propose a 3-tier market model for personal information markets with privacy. In our model, clear roles, rights and obligations for all actors re-establish trust. The 1st market tier, ‘relationship space’, enables data subjects and visible business partners to build trusting relationships. The 2nd market tier, ‘service space’, supports 1st tier relationships with distributed information processing. The 3rd tier is called ‘rich information space’. Here, anonymized personal information will drive innovative socio-inspired services, and companies can freely exchange non-identified data without restrictions. To transition to this model, we show how existing privacy-enhancing technologies and legal requirements can be integrated.