M A R K E T R E S E A R C H S E R I E S

ONLINE DATA PRIVACY, 2012 CONSUMERS AND SMALL BUSINESS

dax Asparna Ltd 259 HaPeleg, Be’erotayim 45820 Israel

Inbal Pasternak & Etamar Laron December 2012

Material contained herein made available to the public Phone +972 (77) 52.55.412 ∙ Fax +972 (9) 76.77.412 ∙ http://www.asparna.com

“94% of US online adults

worry about their privacy

online”

ONLINE PRIVACY

TRUSTe.org and Harris Interactive, June 2012. US Consumer Data Privacy Study (2,000 U.S. online adults)

A REALLY IMPORTANT issue I think

about OFTEN

55%

A SOMEWHAT important

issue I think about

SOMETIMES 39%

Not much of an issue, I

hardly ever think about it

6%

Is Data Privacy an important issue to you? (TRUSTe, 6-2012)

60% of US online adults are

more worried about their

privacy online

PRIVACY CONCERNS ARE ON THE RISE

TRUSTe.org and Harris Interactive, June 2012. US Consumer Data Privacy Study (2,000 U.S. online adults)

More concerned than last

year 60%

Just as concerned

37% Less concerned

than last year 3%

Privacy concerns are up from 2011 (TRUSTe, Apr 2012)

71% of Internet users across

North American and Europe

consider their personal

information to be at risk online

ONLINE PERSONAL INFORMATION

AT RISK

Yes 71%

Likely 19%

Unlikely 6%

No 5%

My personal information online is at Risk (meinungsraum, Jun 2011, n=5,778)

Meinungsraum (Germany), Jan 2011. Privacy Survey 2011 | 5,778 USA + Europe online adults

Over 80% of US Mobile

adults are Concerned over

mobile-internet privacy

MOBILE INTERNET PRIVACY CONCERNS

GSM Association, Sep 2011. Privacy is a Significant Concern to Mobile Users | 4,121 USA + EUROPE Mobile adults

92%

76% 81%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Concerned about appscollecting their personal

info w/o consent

Very selective who theygive personal info due to

privacy concerns

Believe thatsafeguarding their

personal info is Veryimportant

Privacy Concerns among Mobile Internet users (GSMA, Sep 2011)

“54% decided to

not install Apps

due to privacy concerns”

ACTING ON CONCERNS

TRUSTe.org and Harris Interactive, June 2012. US Consumer Data Privacy Study (2,000 U.S. online adults)

ACTED

55,242,000 54%

Not acted

47,058,000 46%

Decided to not install App due to Privacy concerns

30% of Mobile users have

uninstalled pre-configured

Apps on their Smartphones

due to privacy concerns

ACTING ON CONCERNS

TRUSTe.org and Harris Interactive, June 2012. US Consumer Data Privacy Study (2,000 U.S. online adults)

ACTED

30,690,000 30%

Not acted

71,610,000 70%

Uninstalled pre-installed App due to Privacy concerns

48% of US Mobile adults

did not use their Mobile

Internet in 2011 due to

privacy concerns

ACTING ON CONCERNS

NOT USING due to

PRIVACY CONCERNS

48%

USE but want BETTER

SAFEGUARDS 26%

USE and DON'T MIND

PRIVACY 26%

Use of Mobile Internet on Mobile platforms (GSMA, Sep 2011)

GSM Association, Sep 2011. Privacy is a Significant Concern to Mobile Users | 4,121 USA + EUROPE Mobile adults

In the current online world of

Web-based cloud services,

Consumers are pro-active

to self-protect themselves

ACTING ON CONCERNS

TRUSTe and Harris Interactive, Jun 2012. US Consumer Privacy Attitudes & Business Implications | 1,033 USA consumers

76%

50%

49%

46%

40%

79%

67%

64%

83%

37%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Refuse to allow companies sharing w/ 3rd parties

Opt out of Online Behavioral Advertising

Check for certification or seal of privacy

Check for website privacy statement

Read the website privacy statement

Manually delete cookies, cache or browsing histories

Automatically delete cookies, cache or browsing…

Install browser Privacy-Addons

Understand / aware of Online Behavioral Advertising

Do not trust my App-Store with my Privacy

Consumers Take a Range of Actions to Protect Themselves Online

2010 2011 2012

Gov’ Web / Cloud Person-centric + friends

Consumers see mainly themselves and

their friends as responsible for privacy.

Next, they would relay responsibility to

web technologies or companies, and only

eventually to governments.

WHO DO CONSUMERS SEE AS

RESPONSIBLE?

45% 34% 33% 31% 31% 30% 29% 31% 27% 28%

36% 44% 44%

40% 39% 40% 40% 36% 38% 31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Responsibility of different actors to protect Privacy (Jun 2011)

Wholly A lot

TRUSTe and Harris Interactive, Jun 2011. US Consumer Privacy Attitudes & Business Implications | 1,004 USA consumers

74% - 89% of Mobile Internet

users have severe concerns

over specific privacy subjects

PRIVACY CONCERNS SIMILAR ACROSS SUBJECTS

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ith

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9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Privacy Concerns among Mobile Internet users (GSMA, Sep-2011)

GSM Association, Sep 2011. Privacy is a Significant Concern to Mobile Users | 4,121 USA + EUROPE Mobile adults

There are no substantial

age-related differences in

concerns over Online Privacy

PRIVACY CONCERN DEMOGRAPHICS

TRUSTe.org and Harris Interactive, April 2012. TRUSTe Privacy Index – Consumer Confidence ed. (2,415 U.S. online adults)

82% 87%

91% 93%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Age 18-34 Age 35-44 Age 45-54 Age 55+

Privacy concern by Age

2012-03

Consumers in the USA are the

most concerned and Europeans

follow right after, though the EU

as a government is more active.

PRIVACY CONCERN DEMOGRAPHICS

Meinungsraum (Germany), Jan 2011. Privacy Survey 2011 | 5,778 USA + Europe online adults

“A full 70% of small businesses are

concerned about where their data is

stored. Just-over half of all SMBs cite

data privacy as a potential deal

breaker for adopting cloud services.”

PRIVACY CONCERNS IN FILE SHARING

SYMANTEC, 2012. SMB File Sharing Flash poll | 1,325 Global SMBs SYMANTEC, 2012. State of Information Survey | 4,506 Global SMBs

Read more on our report SMB File-sharing and sync, 2012

1. At least 50% of consumers have high/critical concerns of online privacy.

2. For 60% of consumers, online privacy concerns are trending higher.

3. Over 4 in 5 individuals are concerned about online privacy, regardless of age, nationality or type of specific concern.

4. 30% - 79% of consumers translate their concerns to actions, across all concerns.

5. Perception of responsibility is aligned towards Elsewhere values more than to web/cloud values.

6. SMBs are highly concerned of data privacy, and over 50% see it as a deal-breaker in cloud solutions.

NEXT: Public opinion as reflected in technology news coverage

High to Critical awareness translated to Actions in 2012

ONLINE PRIVACY 2012 AT A GLANCE

Example of dedicated media coverage

Since 2011, the Wall Street Journal

devotes an entire section of its online

magazine to Online Privacy. In “what

they know”, the prominent economical

magazine tracks how badly your online

privacy is revoked on the internet and

features daily articles, webcasts, videos

and even tools to measure your

exposure levels at common websites.

WALL STREET JOURNAL

WHAT THEY KNOW

A valuable lesson from Randi Zuckerberg: Online privacy is complicated Dec 26, 2012. ZDNet PC

Privacy suit accuses Google, Viacom of feeding 'cookies' to children Dec 26, 2012. The national Law journal

The Gift Of Online Privacy Dec 25, 2012. Tech Crunch

Policy and privacy: Five reasons why 2012 mattered Dec 24, 2012. C|NET.com

Websites Vary Prices, Deals Based on Users' Information Dec 24, 2012. Wall Street Journal

Consumer privacy is the number one concern of Internet users Dec 23, 2012. Center for Democracy

2012 in Review: A Year in Digital Freedom Dec 22, 2012. Electronic Frontier Foundation

Editorial Quick Hits: Protect online privacy Dec 22, 2012. Detroit Times

Experimenting with Your Privacy, Facebook Begins Selling Your Inbox Dec 22, 2012. Electronic Frontier Foundation

Privacy worries go way beyond emails Dec 21, 2012. CNN

Canada: Data Privacy Online Dec 20, 2012. Canadian Bar Association

We need standard disclosure for Online Privacy. Here’s How. Dec 19, 2012. ZDNet PC Magazine

Why the Web Is Freaking Out Over Instagram’s New Terms of Service Dec 19, 2012. Wall Street Journal

FTC beefing up rules for protecting kids’ Privacy Online Dec 19, 2012. ZDNet PC Magazine

The following is a selection of headlines of top,

prominent national newspapers and blogs read

in North America by at least 1M people.

The picture portrayed in the media is that the

internet is not safe; that your privacy is the new

currency in which you pay for your services

online ; that servers keep and store your data

for years; that human mistakes in privacy are

kept forever; and that companies sell your data

and privacy by the pound.

NEWS FOR ONLINE PRIVACY WEEK OF DEC 19-26, 2012

EXAMPLES OF MEDIA COVERAGE

Online Privacy is tracked daily by all major news outlets and agencies.

As a search term, Online Privacy is 10x more widespread than Cloud Computing.

“Never has privacy been more important than today, in the age of the internet, the world wide web and

smartphones. …

Much of this innovation is enabled by novel uses of personal information. So it is incumbent on us to do

what we have done throughout history: apply our timeless privacy values to the new technologies and

circumstances of our times …

One thing should be clear, even though we live in a world in which we share personal information more

freely than in the past, we must reject the conclusion that privacy is an outmoded value: it has been at the heart of our democracy from its inception, and

we need it now more than ever.”

BARACK OBAMA CONSUMER PRIVACY BILL OF RIGHTS

White House, Feb 2012. Consumer data privacy in a Networked World – Framework for Protecting Privacy and Promoting Innovation

ONLINE PRIVACY PREDICTIONS FOR 2013 FJORD CONSULTING HTTP://WWW.SLIDESHARE.NET/FJORDNET/FJORD-TRENDS-2013

Huffington Post, Dec 12, 2012. Fjord predicts: 2013 digital trends

ONLINE PRIVACY PREDICTIONS FOR 2013 FJORD CONSULTING HTTP://WWW.SLIDESHARE.NET/FJORDNET/FJORD-TRENDS-2013

ONLINE PRIVACY PREDICTIONS FOR 2013 THE GUARDIAN, UK HTTP://WWW.GUARDIAN.CO.UK/MEDIA-NETWORK/MEDIA-NETWORK-BLOG/2012/DEC/21/DATA-PRIVACY-2013-PREDICTIONS

1. Data privacy gets personal The issues around personal data privacy are also leaking into the corporate environment … As data privacy gets personal and as organisations fight to protect their data assets, the onus will increasingly be on the individual to ensure they too are doing all they can to keep their sensitive information and privacy intact, wherever they are broadcasting it from and to.

2. The rise of new technology

3. Getting global As previously untouched parts of the world are reached through wireless technology, more people from more places will be sharing their data online in 2013. The charge for data privacy and security needs to be a priority across the globe as technology spreads.

4. Tooling up There's no such thing as standing still when it comes to avoiding data breaches and ensuring data privacy standards are upheld. If you're not moving forward then you're falling behind. 2013 looks set to be another big year for data security.

MORE ONLINE PRIVACY PREDICTIONS FOR 2013

PRIVACY PROBLEMS: Because consumers are climbing on board with personalization, they should expect to see more of the general information they share online used by companies. Everything from age, geography and life stage, incorporating social profiles (e.g., married versus single) is predicted to play a part in offering a more relevant, more valuable e-commerce experience.

Forbes http://www.forbes.com/sites/gyro/2012/12/24/10-e-commerce-predictions-for-2013/

Privacy and cyber-security are two topic areas that will continue to be hot topics in 2013. Several privacy-related topics are garnering interest such as Differential Privacy and Do Not Track (DNT), among others. To state the obvious, privacy will be a super-important topic area in 2013.

SC Magazine http://www.scmagazine.com/outlook-for-mobile/article/274057/

Gizmodo editorial http://www.marketplace.org/topics/tech/online-privacy-2013-and-trading-old-school-correspondence-lettrscom

"To me I think the biggest issue is going to be privacy," says Barrett, "and how we live private lives in this age when social media really is almost a utility at this point. … We’re past the honeymoon phase a little bit. We started out with these things that were free services, that are great [in] that [they] connect us --- and now the bill's coming due. We’re going to have to be a much more educated digital populace if we want to protect those things that we would rather keep private."

… MORE ONLINE PRIVACY PREDICTIONS FOR 2013

Companies digest government’s view on Privacy: That’s not to say we don’t still have significant work ahead to protect our children and personal information, but at least the industry has come to terms with understanding the regulative/legislative values and aren’t panicking anymore. Governments and solution providers are working on very creative solutions that should provide a nice compromise for 2013.

Search engine watch http://searchenginewatch.com/article/2232475/2012-Analytics-Year-in-Review-Predictions-for-2013

Forrester research http://www.digitaltrends.com/mobile/the-free-ride-is-over-get-ready-for-mobile-advertising-overload-in-2013/

Privacy and the Digital Trail. The information about our activities and movements can be misused. That is part of a trade-off (of using these online services), but at the moment it's a trade-off we can't measure easily. To a large extent we don't know what information is being collected about us, we don't know if it's correct, and we don't know how to fix what might be wrong.

Privacy concerns about information stored on BYOD devices will gain higher profile in 2013. Employees who get burned [sic] by having personal information wiped from their "personal" devices by employers will start to understand the complexity of BYOD.

CMS Wire http://www.cmswire.com/cms/social-business/2013-predictions-the-changing-needs-of-the-mobile-social-business-018845.php

FURTHER INTERESTING READING IN RECENT NEWS

• Data Privacy Month (USA Educational System) is an annual effort to empower people to protect their privacy and control their digital footprint, as well as escalate the protection of privacy and data as everyone's priority. http://www.educause.edu/focus-areas-and-initiatives/policy-and-security/educause-policy/community-engagement/data-privacy-month

• A cloud computing survey from Microsoft found that a chief concern of potential SMB cloud customers is the security and privacy of their data. A full 70% of small businesses are concerned about where their data is stored. Just-over half of all SMBs cite data privacy as a potential deal breaker for adopting cloud services. And only 36% of businesses think their data is as or more secure in the cloud than their current on premises solution http://www.cloudtweaks.com/2012/08/cloud-infographic-cloud-control-and-file-sharing/

• back-to-back announcements from the California Attorney General and the White House give me some hope that we may finally be entering a period where people can have at least some control over their personal information. http://www.forbes.com/sites/larrymagid/2012/02/23/is-online-privacy-finally-becoming-a-reality/

• From gun-toting, on-the-lam tech giants to flying drones and internet uprisings, these are the privacy and security stories that dominated Threat Level in 2012. http://www.wired.com/threatlevel/2012/12/2012-year-in-review/

• Let’s break down the privacy debate ... at the core of consumer’s objections is the fact that someone is making money off of them. http://www.forbes.com/sites/realspin/2012/03/26/the-economics-of-online-privacy/

• While lawmakers were caving to special interests, however, they cut from the legislative package language requiring the authorities to get a warrant to read your e-mail or other data stored in the cloud. http://www.wired.com/threatlevel/2012/12/congress-caves-privacy/

• Dropbox has come under fire for claims it made about exactly who has access to your files. http://www.macworld.com/article/1159370/dropbox_security.html

• When you upload or otherwise submit content to our Services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services),communicate, publish, publicly perform, publicly display and distribute such content. http://www.theverge.com/2012/4/25/2973849/google-drive-terms-privacy-data-skydrive-dropbox-icloud

• 81 percent of IT professionals express security concerns when moving data to the cloud, according to a recent survey conducted by GreenSQL. http://www.greensql.com/content/greensql-october-survey-shows-81-it-professionals-have-security-concerns-when-moving-data-cl

• Facebook shares fell Friday after a report said its photo-sharing app Instagram had lost millions of users following the release of planned policy changes … that appeared to clear the way for the mobile photo sharing service to sell pictures without compensation, amid protests from users.http://uk.news-republic.com/Web/ArticleWeb.aspx?regionid=4&articleid=

5827097 • I remain highly concerned about privacy, it's alleged

absence in the U.S. Constitution … and how it's been steadily taken away from us in the era of the web and social media. http://cloudcomputing.sys-con.com/node/2496774

• The 7 biggest privacy offenders: Facebook, Gmail, MSN Live, Skype, Twitter, Dropbox, Google+ [infographics] http://coolcatteacher.visibli.com/share/bh6H04

• International Data Privacy Law (Oxford) has a global focus on all aspects of privacy and data protection, including data processing at a company level, international data transfers, civil liberties issues, technology issues relating to privacy, international security breaches, and conflicts between US privacy rules and European data protection law. http://idpl.oxfordjournals.org/

• Transactions on Data Privacy (UNESCO) is to provide an international forum for researchers on all topics related to data privacy technologies http://www.tdp.cat/

Dax Asparna Ltd 259 HaPeleg street Be’erotayim 42850 Israel P +972 (77) 52.55.412 F +972 (9) 76.77.319

REFERENCE RESEARCH SOURCES READ MORE ON HTTP://WWW.ASPARNA.COM AND OUR

NEWS FEED ON HTTP://WWW.ASPARNA.COM/INTERNET-PRIVACY-NEWS

TRENDS, AWARENESS & ACTIONS TAKEN How important is Data Privacy to you? 2,000 US Adult internet users

Privacy trend: concerns up from 2011 2,000 US Adult internet users

My personal information online is at risk 5,778 US + Europe internet users

Users deciding to not install Apps due to Privacy 2,000 US Adult internet users

Users deciding to uninstall Apps due to Privacy 2,000 US Adult internet users

Users avoiding mobile internet usage in 2011 4,121 US + Europe mobile internet users

Consumers take a range of actions 1,033 US internet users

Whose responsibility is it to protect online privacy? 1,004 US internet users

Privacy concerns among mobile Internet users 4,121 US + Europe mobile internet users

Privacy concerns by consumer age 2,415 US internet users

Concerns about privacy, personal info & reputation 5,778 US + Europe internet users

Privacy concerns in File Sharing 5,831 file-sharing users in Global SMBs