The Why of Privacy: 4 Reasons Privacy Matters to People, and Why Companies Need to Know Them

While almost all companies collect and use their customers, visitors and users’ personal information, primarily online and through in-person customer interactions such as point-of-sale transactions, the privacy landscape is in a near-constant state of turbulence and flux. There is the steady flow of data breach reports affecting companies of almost every size and market segment. New data privacy laws, rules and regulations continue to be introduced and enacted around the world, such as the US-EU Privacy Shield program, the EU General Data Protection Regulation (GDPR), and Argentina’s draft Data Protection Bill, placing new legal obligations and restrictions on the collection and use of personal information. Challenges continue to be raised against laws which are perceived to overreach or conflict with privacy rights, such as the continued challenges to the Privacy Shield program and EU’s Model Contract Clauses.

The one constant in this turbulent landscape is that consumers’ awareness of data privacy and security continues to grow. Given this, it is important to step back from the day-to-day privacy developments and look at a more fundamental question. It is axiomatic in the world of privacy that privacy matters to people, but why it matters is more complicated. People often argue about why privacy is important to individuals, but there is no “one-size-fits-all” answer. Privacy matters to different people in different ways, so there are many equally valid reasons why privacy is important to individuals.

Understanding the “why of privacy” is also critically important to businesses and other organizations. By now, most companies understand the importance of providing notice of their privacy collection practices and choice with respect to the use of collected information. A company collecting, processing and/or controlling personal information that understands the reasons privacy matters to the data subjects whose data they collect and use can design more effective privacy practices and policies attuned to the needs of their data subjects, such as by creating customer privacy profiles for use in product design and testing.  This follows the “privacy by design” framework advocated by the Federal Trade Commission and helps increase trust in the company’s commitment to data privacy and security, which is critical to the success of every company in today’s world and can provide a competitive advantage.

The reason why privacy matters differs from person to person. However, I believe these reasons can be grouped into four core categories: (1) privacy is a right, (2) privacy is an entitlement, (3) privacy is an expectation, and (4) privacy is a commodity. I’ll explore each of them in turn.

Privacy is a Right

Persons falling into this first category value privacy as an irrevocable right guaranteed to all. People living in countries with constitutional data privacy protections often fall into this category. For example, the European Union Charter of Fundamental Rights recognizes the right to data protection and the right to privacy as fundamental human rights. In some countries, it has been implied through interpretation of constitutional and legal rights, such as the right to privacy found by the U.S. Supreme Court and the right to privacy recognized under the Canadian Charter of Rights and Freedoms even though it does not specifically mention privacy. In August 2017, a unanimous Supreme Court of India held that privacy is a fundamental right as an integral part of the Right to Life and Personal Liberty guaranteed under Article 21 of the Constitution of India.  The 1948 United Nations’ Universal Declaration of Human Rights states that people have a fundamental human right not to “be subjected to arbitrary interference with their privacy, family, home or correspondence.”

  • People in this category are more likely to take a very rigid view of privacy trumping all other interests, including business interests, and may be less willing to “trade” any of their privacy for other benefits such as increased security.
  • People in this category tend to expect that any consent given to use personal information must be clear, unambiguous, express, and fully revocable and that use of the information must be specifically limited to the grant of rights or as otherwise expressly permitted by law, which creates a significant burden for businesses and other organizations collecting and using personal information.
  • Privacy as a right is an individual view – the rights of the individuals to protect their personal information are paramount to almost all other rights by others to use or access that personal information.

Privacy is an Entitlement

Persons falling into this second category value privacy as something to which they are entitled under laws, rules and regulations applicable to them. There are many laws, either comprehensive data privacy laws such as Canada’s PIPEDA or sectoral laws such as the privacy laws enacted in the United States, whose prohibitions or restrictions on privacy practices may be viewed by individuals as creating privacy obligations to which they are entitled. An example is the U.S. Children’s Online Privacy Protection Act, which among other things prohibits the collection of personal information from children under 13 without verifiable parental consent. Some parents view COPPA as creating an entitlement for their children to be left alone unless the parent consents to the collection of personal information from their children.

  • Similar to privacy as a right, people in this category are likely to view privacy as trumping other interests, including business interests, and may be less willing to give up privacy for other benefits.
  • They tend to expect that any consent given to use personal information must be fully compliant with legal requirements, and that use of the information must be specifically limited to those use rights expressly permitted by law, which creates a burden for businesses and other organizations collecting and using personal information.
  • As with privacy as a right, privacy as an entitlement is an individual view, where a individual’s entitlement to privacy outweighs other interests in a person’s personal information.
  • A key differentiator between privacy as a right and privacy as an entitlement is that an entitlement can be revoked, e.g., through changes to the law, whereas a right is irrevocable. While some might argue that a judicially-recognized right to privacy should be an expectation, I believe that the recognition by a country’s supreme court that privacy is a right, which is unlikely to be overturned or legislatively reversed, should be considered a right.

Privacy is an Expectation

Persons falling into this third category value privacy as something they expect to receive, whether or not they have a right or entitlement to it. New technologies (such as drones and biometric identifiers) and practices (such as marketing strategies) tend to be ahead of laws specifically governing them, and people in this category expect to receive privacy protections regardless of whether existing laws or other rights cover the technology or practice. They may also expect societal norms with respect to privacy to be followed by businesses and other organizations, whether or not stricter than applicable legal requirements. There are also certain expectations of privacy that are generally recognized within a given society. For example, in the United States, many people have an expectation of privacy in their own home and other private areas such as a public bathroom stall. If a person or organization interferes with this expectation of privacy, there may be legal liability for invasion of privacy under state laws. There are other expectations of privacy on a per-situation basis, such as a private conversation between two individuals.

  • People in this category believe that third parties, such as companies and government entities, should recognize that their expectation of privacy trumps those third parties’ desire (or rights) to access and use their personal information, but also understand that the expectation of privacy has limits. For example, a person should not have an expectation of privacy in a public place (e.g., a public sidewalk), and there is no right of privacy that extends to a person’s garbage placed on the street for collection.  In the United States, there is also no expectation of privacy in the workplace.
  • An expectation of privacy can be breached by a superior interest by a third party. For example, if a court approved surveillance of someone suspected of engaging in illegal activity, any expectation of privacy that person may have that his conversations are private is superseded by the government’s interest in preventing and prosecuting crime.
  • People in this category also generally do not question or challenge the terms of a privacy policy or other agreement granting rights to use or collect their personal information. People in this category also tend to expect businesses and other organizations collecting and/or using their personal information will not unreasonably collect or use their personal information, and will respect usage opt-out requests.
  • Privacy as an expectation is a middle-of-the-road view, in which the individual view of privacy as paramount is tempered with the understanding that in some cases the general or specific value of allowing a third party to receive and use their personal information outweighs the personal interest.

Privacy is a Commodity

Persons falling into this fourth category value privacy as a commodity that they are willing to exchange for other benefits, goods or services. We live in an information economy, where data has been commoditized. To many companies a core or important part of their product or service offering (i.e., part of the general value of the product or service) or business strategy is the ability to monetize personal, aggregate, and/or anonymous data collected through its use. Companies argue that the value derived from data monetization is factored into the value and cost of the product or service. Other companies offer something of specific value, such as registering for an extended product warranty, for sharing personal information such as an email address or demographic information. Many people give businesses some rights to use their personal information simply by visiting a webpage, requesting information from them, or purchasing goods or services from them in which they agree to be bound by the company’s privacy policy or terms of use/terms of sale. We also live in a world where many people are willing to sacrifice some privacy in exchange for increased security against terrorism and other potential physical and cyber threats. People falling into this category have a strong understanding of the trade-off between privacy and other benefits.

  • People in this category are more willing to give third parties the right to use their information as long as the thing they receive in return is valuable enough to them – they view their personal information as currency. If a company or organization offers something of value, they are very likely to agree to share personal information with that company or organization. These are the kind of people who don’t really care that they’re receiving targeted ads while surfing online.
  • Conversely, if they do not believe they are receiving value in return for their personal information, people in this category are more likely not to share their information.
  • Privacy as a commodity is a transactional view, meaning that the an individual is willing to allow a third party to receive and use their personal information if the general or specific value of allowing that third party to receive and use the information outweighs their personal interest in keeping their information.
  • It may require a greater transfer of value to convince someone viewing privacy as a right, entitlement or expectation to treat it as a commodity.


As a closing thought, these four reasons why privacy matters to people are not mutually exclusive, meaning that there are additional sub-categories of people for whom two or more of these reasons are important. For example, it is possible for someone to view privacy as both an entitlement and a commodity. Such a person would expect that while they have the ability to exchange their personal information for something of value, it must always be a voluntary exchange – they would reject any need to trade away their personal information. Businesses who take the time to understand the “why of privacy” will find themselves better positioned to create sample customer profiles based on their customers’ privacy values, leading to more robust privacy practices, processes and policies and a potential competitive advantage on privacy in the marketplace.

Eric Lambert has spent most of his legal career working in-house as a proactive problem-solver and business partner. He specializes in transactional agreements, technology/software/e-commerce, privacy, marketing and practical risk management. Any opinions in this post are his own. This post does not constitute, nor should it be construed as, legal advice. He is a technophile and Internet evangelist/enthusiast. In his spare time Eric enjoys reading and implementing and integrating connected home technologies and dabbles in voice-over work.

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