Learn from the failures of Big Tech and protect young people's databy
Angel Maldonado dives into the critical issue of data privacy concerning Gen Z. As fines and controversies shake the tech industry, he sheds light on the need for a consumer-owned data approach and privacy-by-design principles.
The safety of young people online has always been, and will remain, an incredibly important discussion. It’s not just who young people are connecting with online but how they’re connecting that’s a threat, with Microsoft, TikTok and Meta all slapped with GDPR fines for their lack of protection around young people’s data. Yet social media and software companies aren’t solely responsible - retailers are also complicit. Brands such as JD Sports and Sports Direct are amongst the top retailers in the UK and have audiences composed of predominantly Gen Z consumers, yet are renowned for using the most cookie trackers and have been susceptible to data leaks.
If they refuse to adapt, retailers risk losing a huge proportion of their customer base simply by not putting privacy first.
Big Tech and retailers need to fix this - fast. Not only to protect young people’s data but their own interests too. Younger users often aren’t passive victims and are using their agency to evade exploitative tech: 50% of young shoppers say they are aware of online tracking practices and are moving away from retail brands that fail to do enough to protect their data and privacy online. If they refuse to adapt, retailers risk losing a huge proportion of their customer base simply by not putting privacy first.
But what does adapting look like? How can retailers balance personalisation with privacy? Consumer experience with consent? Ethics doesn’t have to be sacrificed for profits with the right tech and approach.
The ethical implications of collecting Gen Z data
In our tech-driven world, data is a resource. And as with any resource, who owns it and uses it is both powerful and political.
One of the biggest problems is the misconception that data belongs to the businesses that mine it, rather than the users from which it originates. One-click of a checkbox and companies like Meta believe and behave like consumers’ data is theirs for the taking - Even while privacy policies are almost deliberately opaque and consumers are oblivious to the huge amounts of personal data that’s being collected. With Meta amassing more than 3 billion users across its family of apps, it’s an incredible amount of power to wield.
Added to this, you have Big Tech’s ‘move fast, break everything’ mentality - innovate and think about the consequences later. Regulators are now attempting to impose those consequences and ethical considerations: Last year, Google settled a privacy lawsuit for non-consented tracking at $392M, Meta was fined £405M for violating child privacy around non-consented location tracking and this summer OpenAI was sued £3 billion for using all the information available on the internet to train their Large Language Models (LLM) models without consent.
The damage the casual attitudes shown by Big Tech companies cause is huge and a fine after the fact won’t fix it.
The damage the casual attitudes shown by Big Tech companies cause is huge and a fine after the fact won’t fix it. There's the short-term impact where the black box data set used to train the algorithm can profile individuals incorrectly, showing them harmful content on TikTok and Instagram. Then there’s the long-term impact. Non-consented location tracking is the tip of the iceberg - an exploitative power dynamic that puts businesses on top and has serious implications for the spread of misinformation, lack of transparency, threats to geopolitics and even war. Big Tech might not intend these knock-on effects but the series of data scandals creates an environment where consumers don’t feel safe online.
Data should be consumer-owned
Big Tech’s failings are retail’s problems too. In an era dominated by technology, where data is the new currency, it’s imperative that online retailers understand and address the ethical implications of collecting young people’s data and prioritise their protection.
Embracing the concept of consumer-owned data also means embracing privacy by design.
Embracing the concept of consumer-owned data also means embracing privacy by design. This is where businesses, such as retailers, design their systems and processes in a way that minimises the collection and storage of personal information, reducing the risk of potential data misuse and leakage. This approach ensures that privacy considerations are embedded into a retailer’s operations, not awkwardly or ineffectively added on as an afterthought.
Privacy concerns are actively shaping shopping behaviours too. McKinsey research shows that 53% of consumers will make online purchases or use digital services only after making sure that the company has a reputation for protecting its customers’ data - this rises to 58% among millennials and Gen Z. And over 50% of millennials and Gen Z consumers will often or always consider another brand if the one that they’re considering purchasing from is unclear about how it will use their data.
Adopting a consumer-owned data approach, therefore, allows online retailers to establish mutual trust with their customers and differentiate themselves as ethical providers in the marketplace. Over time, this will attract privacy-conscious shoppers - especially younger shoppers - who value their personal data and seek to engage with brands that share their values.
Restoring trust through new approaches
Trust is built on transparency and there are a number of ways retailers can establish the latter to build the former.
Online retailers should clearly communicate their data collection usage and storage policies to customers, providing detailed information about what data is collected, how it’s used and the security measures in place to protect it.
Retailers should also ensure that they’re seeking explicit consent for data collection and provide clear options for users to opt in or out of specific data processing activities. And they should make this opt-out easy, so consumers don’t feel tricked into giving consent through reams of text and numerous pre-ticked boxes. Respecting user preferences and empowering consumers to make active choices about their data reinforces trust and demonstrates a business’ commitment to ethical data practices.
Another way retailers can establish trust is by seeking out independent certifications and assessments of their data handling processes that can prove compliance with privacy regulations. Involving a neutral third party to sign off online data safety clearly demonstrates to consumers that a retailer truly cares about ethics, setting them head and shoulders above the competition.
Big Tech has big data problems to fix but retailers also have work to do.
Big Tech has big data problems to fix but retailers also have work to do. If they want to create a more ethical future that protects younger consumers and regains declining customer trust, they must learn from the fines and failures. Consumers - and society - deserve a better way of handling data. One that’s led by fairness, transparency and common sense. After all, common sense always prevails.