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Lack of Trust in Internet Privacy and Security May Deter Economic and Other Online Activities

May 13, 2016 by Rafi Goldberg, Policy Analyst, Office of Policy Analysis and Development

Every day, billions of people around the world use the Internet to share ideas, conduct financial transactions, and keep in touch with family, friends, and colleagues. Users send and store personal medical data, business communications, and even intimate conversations over this global network. But for the Internet to grow and thrive, users must continue to trust that their personal information will be secure and their privacy protected.

NTIA’s analysis of recent data shows that Americans are increasingly concerned about online security and privacy at a time when data breaches, cybersecurity incidents, and controversies over the privacy of online services have become more prominent. These concerns are prompting some Americans to limit their online activity, according to data collected for NTIA in July 2015 by the U.S. Census Bureau. This survey included several privacy and security questions, which were asked of more than 41,000 households that reported having at least one Internet user.

Perhaps the most direct threat to maintaining consumer trust is negative personal experience. Nineteen percent of Internet-using households—representing nearly 19 million households—reported that they had been affected by an online security breach, identity theft, or similar malicious activity during the 12 months prior to the July 2015 survey. Security breaches appear to be more common among the most intensive Internet-using households. For example, while 9 percent of online households that used just one type of computing device (either a desktop, laptop, tablet, Internet-connected mobile phone, wearable device, or TV-connected device) reported security breaches, 31 percent of those using at least five different types of devices suffered this experience (see Figure 1).

Figure 1: Households Reporting Online Security Breaches
by Number of Different Types of Devices Used,
Percent of Households with Internet Users, 2015

Note: Households reporting zero device types did not indicate use of a desktop, laptop, smartphone, tablet, TV-connected device, or wearable device, but reported using the Internet from some location. Of the 1,368 households in this category, only 297 reported using the Internet at home.

Similarly, 22 percent of Internet-using households that used a mobile data plan to go online outside the home experienced an online security breach, compared with 11 percent of those not using data plans while outside the home. Perhaps not surprisingly, these figures suggest the prevalence of data breaches is higher among segments of our population that are constantly connected.

Online Households Are Concerned About a Range of Privacy and Security Risks

NTIA also asked households to identify what concerned them the most about online privacy and security risks. Interviewers did not suggest possible answers when asking this question, and respondents were free to give multiple answers or to say that they had no concerns. Despite the lack of prompting, 84 percent of online households named at least one concern they had about online privacy and security risks, and 40 percent cited at least two different concerns. By far the most frequent concern—shared by 63 percent of online households—was identity theft. Other common concerns included credit card or banking fraud, data collection or tracking by online services, loss of control over personal data, data collection or tracking by government, and threats to personal safety (see Figure 2).

Figure 2: Major Concerns Related to Online Privacy and Security Risks,
Percent of Households with Internet Users, 2015

Privacy and security concerns were even more prevalent among online households that had been affected by a security breach during the year prior to the survey. Seventy percent of such households named identity theft as one of the issues that concerned them the most, compared with 62 percent of their peers that had not experienced a breach. We observed the same pattern across the board; for example, 30 percent of breach-affected online households were concerned about data collection or tracking by online services, versus 21 percent of their unaffected counterparts.

Privacy and Security Concerns Deterred Many Americans from Engaging in Important Economic and Civic Online Activities

It is clear that many Americans have serious concerns about privacy and security on the Internet. NTIA’s most troubling finding comes from a series of questions about whether households had refrained from participating in certain online activities due to privacy or security concerns during the year prior to the survey. Forty-five percent of online households reported that these concerns stopped them from conducting financial transactions, buying goods or services, posting on social networks, or expressing opinions on controversial or political issues via the Internet, and 30 percent refrained from at least two of these activities. Privacy and security concerns deterred each of these important activities in millions of households, and this chill on discourse and economic activity was even more common among online households that either had experienced an online security breach or expressed two or more major concerns about privacy and security risks (see Figure 3).

Figure 3: Online Activities Avoided Due to Privacy or Security Concerns
by Selected Groups, Percent of Households (HHs) with Internet Users, 2015

Note: Categories depicting online activities avoided by different groups are not mutually exclusive. Fifty percent of online households reporting an online security breach also expressed two or more privacy or security concerns. Conversely, 24 percent of online households expressing multiple concerns also experienced a security breach.

Online households were even more likely to refrain from a particular activity when they had privacy or security concerns related to the activity in question. Among households citing identity theft as a concern, for example, 35 percent reported that they had refrained from conducting financial transactions online during the year prior to the survey, compared with 18 percent of other online households. Similarly, 33 percent of online households concerned about credit card or banking fraud declined to buy goods or services using the Internet, compared with 21 percent of their peers who had not expressed that particular concern. The apparent fallout from a lack of trust in the privacy and security of the Internet also extends beyond commerce. For example, 29 percent of households concerned about government data collection said they did not express controversial or political opinions online due to privacy or security concerns, compared with 16 percent of other online households.

NTIA’s initial analysis only scratches the surface of this important area, but it is clear that policymakers need to develop a better understanding of mistrust in the privacy and security of the Internet and the resulting chilling effects. In addition to being a problem of great concern to many Americans, privacy and security issues may reduce economic activity and hamper the free exchange of ideas online.

NTIA will continue to analyze relevant data, as well as potential policies—such as encouraging the widespread deployment of strong encryption and other security measures—that could help build trust in the Internet and stimulate the free flow of information and commerce online. Acting on the President’s 2012 privacy blueprint, which NTIA helped develop, the Obama Administration last year unveiled draft privacy legislation that would provide baseline privacy protections to all Americans. NTIA has also convened a series of multistakeholder processes aimed at improving private sector online privacy and cybersecurity practices, and is soliciting comment on privacy, security, and other policy issues connected to the Internet of Things. To ensure continued growth in the digital economy, we as a nation must continue to address privacy and security concerns that may lead to a lack of trust in the Internet.

This is the third post in NTIA’s series on the results of the July 2015 CPS Computer and Internet Use Supplement. Want to be among the first to hear about our future analyses? Sign up for the Data Central mailing list.

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