Academic journal article Journal of Competitiveness Studies

How Consumers in India React to Online Privacy Concerns

Academic journal article Journal of Competitiveness Studies

How Consumers in India React to Online Privacy Concerns

Article excerpt


The number of Internet users in India is estimated at 462 million (Internet World Stats, 2017). This represents a 34.4% penetration in the Indian population, and a nearly 9000% growth since the year 2000. Businesses are targeting Indian consumers for e-commerce transactions in various categories of goods and services, from books and music to clothing, computers, and travel. There are also over 125 million Indians actively participating in social media (Ahuja & Bharadwaj, 2016), with Facebook, Twitter, LinkedIn and YouTube being the most popular ones. Along with the increase in Internet usage by Indian consumers, there is a growing concern about online privacy protection (Jain & Mishra, 2015). Invasion of online privacy involves the unauthorized collection, disclosure, or other use of personal information (Wang, Lee, & Wang, 1998). It is virtually impossible for people to transact business online without revealing personal information (Rust, Kannan, & Peng, 2002). Personal information is also often asked for when consumers are required to register on Websites before being able to peruse free content. Additionally, consumers' personal information can be obtained involuntarily by the use of cookies that track people's online surfing behavior. Vast amounts of information can thus be collected over the Internet, and digital networks can link all this private information in databases (Caruso, 1998). This information can be bought, sold, and traded, possibly without the consumers' permission. This increases the consumers' concerns regarding having to reveal personal information online and the way in which such information might be used (Fletcher, 2003). Such concerns range from the intrusion of one's privacy and being targeted with unsolicited advertisements to potential identity theft.

The relatively weak cyber privacy laws in India are likely to compound the online privacy concerns of Indian consumers (Basu, 2010; Bhasin, 2015). The Information Technology Act of 2000 and the subsequent Information Technology (Amendment) Act of 2008 grant legal sanction to online surveillance, monitoring, and identification of data by government agencies, thus reducing online privacy. Also, there are no robust provisions for protecting the privacy rights of Internet users from potentially unauthorized gathering and use of information by private parties (Gupta, 2010; Bhasin, 2015).

This paper is an exploratory study to investigate the factors that are likely to impact the online privacy concerns of Indian consumers. The study also investigates the protective measures that Indian consumers may implement to safeguard their online privacy.


Dinev and Hart (2004, 2006a) identified two major factors as influencers of online privacy concerns. These are: 1) the consumer's perceived vulnerability to the unauthorized gathering and misuse of personal information; and 2) the consumer's perceived ability to control the manner in which personal information is collected and used. Perceived vulnerability describes the perceived potential risk of personal information to be revealed (Raab & Bennett, 1998). The revelation of private information could be caused by many factors, such as accidental disclosure, unauthorized access, hacking into networks, etc. (Rindfleish, 1997). The possible negative consequences for consumers include identity theft (Saunders & Zucker, 1999), undesirable consumer profiling (Budnitz, 1998), and being targeted by unwanted advertising messages on the Internet (i.e., 'spam' e-mails). These factors contribute to consumers feeling increasingly vulnerable to the risk of misuse of their private information on the Internet and, therefore, experiencing increased online privacy concerns (Dinev & Hart, 2004). The perceived ability to control is the extent to which consumers think they can prevent personal information from being disclosed online (Culnan & Armstrong, 1999). …

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