More Trust, More Data: The Upside of Privacy Laws for Companies
More Trust, More Data: The Upside of Privacy Laws for Companies
Publish Date: 2026-05-08 09:00:00
Source Domain: www.library.hbs.edu
Marketers might have feared that sweeping privacy laws passed in California and Virginia would chill customer data sharing. Evidence from one large platform suggests the opposite might be true: consumers appear more willing to share data.
An analysis of behavior on a large customer engagement app suggests that added disclosures and permission requests put people at ease. As a result, app users in those states submitted 9% more information, in the form of purchase receipts, than elsewhere, says research by Harvard Business School’s Ayelet Israeli and Eva Ascarza.
The new regulations seem to have changed customers’ perceptions about privacy protections.
US states have been passing stricter and more complex laws requiring companies to obtain permission before sharing—or selling—customer data. The findings suggest that marketers and online platforms might also benefit from these regulations as much as consumers, who feel more confident about consenting.
“The new regulations seem to have changed customers’ perceptions about privacy protections,” says Ascarza, a professor in the Marketing Unit. “The evidence suggests that increased trust is a key mechanism driving this change.”
Ascarza and Israeli share their findings in the August working paper “In Privacy We Trust: The Effect of Privacy Regulations on Data Sharing Behavior,” coauthored with Ozge Demirci, an assistant professor at Imperial Business School in London.
When consumers feel better about giving data
Regulations that expanded consumers’ control over how firms use their personal information went into effect in California and Virginia in 2023. Some industry groups considered the rules too onerous, while some consumer advocates said they were too business-friendly and didn’t go far enough. However, behavior suggests that consumers in those states found the regulations reassuring.
The authors worked with a “leading customer engagement” app that invites users to submit shopping receipts to…
