FreeDigital is a 3-year project I started working on in September 2019. It is funded by the Marie Skłodowska-Curie Actions which provide research fellowships within the European Commission Horizon 2020 framework.

With this project, I want to learn how people make decisions when offered with free digital goods or services that involve collection of their personal data.

Here you will find information on the progress of the project as well as all materials generated when developing it.

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 843188

Image by Cookie Tsai

What is FreeDigital about?

Free offers are prevalent in nowadays online markets. We can communicate with our friends through social networks, store our files in clouds, navigate the city, manage our finances or even find a life partner using online products and services without paying a single penny. This, however, does not yet mean that we give nothing in exchange. We do provide our private information that might be profitably used by suppliers of free digital content. Since these transactions affect consumers and their personal data, they fall within the scope of two fields of the European Union (EU) law – data protection and consumer law. The overall objectives of these two areas of law are to protect the privacy of consumers and to balance their position against more powerful transaction partners, i.e., businesses. The question which interests me most is whether these objectives are indeed achieved with the current design of the rules, given people’s heuristics and biases in decision making about free products. Behavioral research has demonstrated that consumers tend to overestimate the benefits and underestimate non-monetary costs of free digital content in the form of exposure to advertisements. Yet, it is still unknown how free offers influence consumer decisions that are relevant from a legal perspective, i.e., decisions that involve consumer rights and privacy. In FreeDigital, I will address this knowledge gap. Specifically, I will employ experimental methods to answer the following research questions:

Research question 1: How does offering digital content at a zero price but in exchange for personal data influence consumers’ decisions about:

  1. use of digital content,
  2. sharing of personal data,
  3. use of contractual and data protection rights, e.g., request to repair the defective content or to delete personal data.

Research question 2: Will these decisions change if consumers are provided with information that:

  1. consumer personal data are supplied as counter-performance for free digital content?
  2. consumer personal data are valuable?

Here you can find updates on the projects conducted within FreeDigital:

  • Zero-price effect with digital content
    Previous behavioral research has shown that consumers overreact to zero-price offers of goods such as candies or chocolates (Shampanier, Mazar, Ariely (2007)). In these experiments, researchers offered participants two goods. One – a high-value more expensive good, the other one – a low-value cheaper good. Some participants saw both goods offered at a positive price, e.g., 15 and 1 Cent. Other participants saw the high-value good offered at 14 and the low-value good at 0 Cents. Researchers observed that in the group which was offered the low-value good at a zero-price, the demand for the low-value good dramatically increased and […]
  • What’s next?
    The results of the first two studies were surprising, but at the same time very reassuring. In contrast to previous behavioral research showing that consumers overreact to zero-price products, my studies demonstrate that this is not necessarily the case. When the decisions have a real impact on people’s money and the good offered is truly beneficial to them, the reaction to the decrease in price to zero (increase in demand for a zero-price good, decrease in demand for a higher-price good) seems to be explained by people perceiving a drop from 1 Cent to zero as bigger than from 15 […]
  • Are offers of free digital content misleading?
    Let’s have a look at two educational websites – Quill and Prodigy. Both offer free tools for children. Quill – to develop writing skills, Prodigy to practice math tasks. Quill is a non-profit. It does not display advertisement, but it does collect users’ personal information such as email address, gender or age as well as gather data on users’ behavior when interacting with Quill. This data is processed to personalize and enhance users’ experience. Quill also offers a premium paid version that contains additional features. Prodigy is a for-profit. It does not display third-party advertisement but, according to Fairplay organization, […]
  • Do people reject free beneficial offers?
    If misleading ‘free’ offers (i.e., offers at a zero-price but imposing non-monetary costs) are so widespread, are consumers skeptical when offered something for free? Is this mistrust so strong that consumers are willing to reject a truly beneficial deal which would help them earn more money? If so, can we design interventions that would help overcome this effect? I collaborated with Caroline Goukens from the Maastricht University School of Business and Economics and Vicki Morwitz from Columbia Business School to address these questions. First, we wanted to test if people are more willing to reject a beneficial offer when it […]
  • Personalization of ads and services
    Consumers are nowadays exposed to various personalized content – from personalized political messages, through social media posts and search results, to movies or music. Such personalization is possible with vast amounts of consumers’ personal data that companies collect and use to train algorithms which are able to predict consumers’ likes, clicks, purchases or voting decisions. In the EU, for such data collection and processing to be lawful, a company needs to meet the GDPR requirements. When drafting GDPR provisions, the legislator tried to strike a balance between protection of consumers’ autonomy when deciding about their privacy and the interest of […]