Perceived Privacy Violation: Exploring the Malleability of Privacy Expectations

Recent scholarship in business ethics has revealed the importance of privacy expectations as they relate to implicit privacy norms and the business practices that may violate these expectations. Yet, it is unclear how and when businesses may violate these expectations, factors that form or influence privacy expectations, or whether or not expectations have in fact been violated by company actions. This article reports the findings of three studies exploring how and when the corporate dissemination of consumer data violates privacy expectations. The results indicate that consumer sentiment is more negative following intentional releases of sensitive consumer data, but the effect of data dissemination is more complex than that of company intentionality and data sensitivity alone. Companies can effectively set, and re-affirm, privacy expectations via consent procedures preceding and succeeding data dissemination notifications. Although implied consent has become more widely used in practice, we show how explicit consent outperforms implied consent in these regards. Importantly, this research provides process evidence that identifies perceived violation of privacy expectations as the underlying mechanism to explain the deleterious effects, on consumer sentiment, when company actions are misaligned with consumers’ privacy expectations. Ethical implications for companies collecting and disseminating consumer information are offered.