Organizational Ethics
The Issue of Online Data Reselling

In 1995 the percentage of the population that used Internet was 0.4 %, while in June 2012 that portion have grown with 30 %, amounting 34.4% of all human population. Current statistics are citing gigantic numbers of the quantity of data that users generate - 2 000 queries on Google and 48 hours of video uploaded every minute are just some of the examples of the humongous size of information created online. This data is valuable due to the increasing number of e-commerce businesses employing the Web as their main platform for exchanging goods for value. Moreover, online data has become a topic of interest for marketers, researches, advertisers and publishers trying to gather as much information as possible in order to improve target advertising and deliver tailored content to their clients. Hence the information of a single browsing user is highly demanded due to the fact that it can provide insights into different online behaviors and optimize online campaigns. In 2006, the EU calculated that the value of open data in Europe (i.e. releasing all government information for free) would be € 27 billion (Dekkers) that is € 55 per European citizen. With a valuation of around $ 100 billion, the value that Facebook holds in 2012 is roughly $ 120 (€ 90) per active member. (NY Times)
Personal data online is tracked by cookies, which are small pieces of code placed on the browser that remember the user and its information with a unique identification. Legislation in a lot of countries is unclear on their privacy and cookie laws, leaving the user unaware of the ways their information is stored and also the value of their browsing data. A study by Princeton Survey Research Associates in 2009 that was using a random sample of 1,000 people found that 69 percent thought that the United States should adopt a law giving people the right to learn everything a Web site knows about them. In June 2012, Consumer Reports issued a recent investigation on the use of Facebook and privacy in the US. The results showed that users were unaware of the privacy settings of their online profile (personal data). All of the Facebook users are targeted by advertisers exactly based on their profile online. Therefore, Facebook is realizing profit over it. For example, if a user comes from a certain neighborhood and have liked at the same time a page on Facebook that is dedicated to cupcakes, most probably an ad of the local bakery will show up. The same goes for the browsing history on Google Chrome and YouTube. Every step is recorded to create an aggregated online profile of the user and then the same users are targeted from different companies through the mediums who have their information. The morality of gathering personal information is being topic of many current debates, but what is even more interesting is the further use of this information. Therefore, the moral issues to be examined in this essay is the one concerning the fair exchange of goods in the market - in our case the reselling of user's information. Users provide their information, but uninformed of the price of their data they gain nothing in return while someone else is gaining advantage of their digital footprints.
With the rise of the importance of ethical issues concerning personal information, various researches have been conducted in order to investigate the current situation of data reselling. In their paper from 2003, Han et al. base their study on the premises invoked by the Social exchange theory, which explains user behavior by the process of outweighing the costs and benefits when engaging with online data gathering. This presumption corresponds to the utilitarian point of view of justice, which relies on the cost-benefit analysis as a tool for ensuring the greatest happiness for the majority. However, in order to fully investigate the moral side of the proposed issue, we would turn to another contemporary theory and its principles – the hypothetical social contract, proposed by John Rawls. In his work, Rawls examines the moral forces of actual contracts, aiming to investigate the question of how do contracts obligate parties to perform their duties. He comes to the following conclusion – there are two main principles that ensure the moral agreement between two parties – autonomy (there is a mutual agreement between the participants to sign the contract) and reciprocity (the idea that both parties would receive equally valued delivery as a result of the contract). However, if considered from an internet user perspective, these two principals have been (in most cases) corrupted by misleading or absence of information in accordance to the use of personal data for commercial purposes.
The first principle – the presence of consent, aims to ensure the mutual agreement between both parties in the contract. Looking at this principle through the prism of online data reselling, by signing in into a social network for example, each one of us gives his or her agreement to participate in the interaction occurring in it, giving at the same time his personal data, aware or unaware of this fact. Those who defend the opinion that users are giving their permission for the usage of their data to the networks, would argue that the principle of consent has been respected. However, a study by Suegel and Gale (2012) that aims to investigate consumer comprehension of the privacy policy of Facebook and Google, show that both websites score less than 40 points out of 100. This could lead us to the conclusion that the mutuality of the agreement that users give for the usage of their data is not based on clarity and transparency.
Even if we consider the opinion of the proponents of current data reselling practices (that there is an actual consent) to be true, several examples, introduced by Michael Sandel in his book “Justice: What’s the right thing to do?” (2009) show that consent is not an enough requirement for one contract to be moral, even though this could be acceptable from juridical point of view. Taking into account, for instance, the case of an old lady, willing to pay 50,000 $ to a contractor in order to repair her leaky toilet, we would agree that even though there is a mutual agreement between the parties, this contract goes far away from being morally acceptable. In the case of online data reselling, inequality in the access to specific knowledge as well as the power that internet plays in our daily lives explain why even if given voluntarily, one’s agreement does not correctly reflect his or her actual perception of what he/she gets involved in. Therefore, there should be another principle fulfilled, which would ensure the fairness of an agreement – the principle of reciprocity.
According to John Rawls, actual contracts are benefit-based – they obligate parties by means of reciprocity of the delivered value. Therefore, both parties should benefit as a result of their agreement. There is an existing debate if this requirement has been fulfilled concerning the proposed ethical issue of data reselling. If we look at the homepage of Facebook, for instance, the first thing that a person willing to join the network would see is “It is free and it would always be”. If we look at this phrase from the perspective that by the usage of cookies this social network relies on users’ information to make its profit, we can state that users actually pay with the information about their personal history in this website. Here comes the question to what extend do these social networks or other websites offer a benefit of the same value to their users. Some defenders of the current policy of using cookies would argue that the hedonic experience of the users corresponds to the benefit that they gain in exchange of their data. However, as it is difficult to define quantitatively the value of experience, how can we be sure that the principle of reciprocity has been accomplished? What it turns out to be in the end is that users actually pay without receiving benefit of the same value in return. Therefore, the second principle of a moral agreement – reciprocity, is being undermined, leaving an open question about the fairness of data reselling by public websites.
As a conclusion, we would refer to a paper, written by Piet Hein van Dam in 2012, which introduces a possible solution to the examined ethical issue. Proclaiming his position for the need of more transparency from companies, the business model of which relies on data reselling, Piet Hein introduces his idea for another, more user friendly practice – gathering of data with the explicit agreement between both parties as well as delivering of value for both sides, regardless of its form (money or other type of incentive as gift cards, free music, etc.). By ensuring the right understanding of the internet users as it concerns their privacy, this idea leads the principle of consent into the right direction, whereas by ensuring the return of value to the user for the value provided, the principle of reciprocity is being accomplished as well.

References
Consumer Reports magazine (June 2012), “Facebook & your privacy: Who sees the data you share on the biggest social network? http://www.consumerreports.org/cro/magazine/2012/06/facebook-your-privacy/index.htm#editor Dekkers, M. , Famnke, P, Velde, R, Vries, M. (2006). MEPSIR: Measuring European Public Sector Information Resources http://ec.europa.eu/information_society/policy/psi/docs/pdfs/mepsir/executive_summary.pdf Hann, I., Hui, K., Lee, T., Png, I. (2003).The Value of Online Information Privacy: An Empirical Investigation. in: AEI-Brookings, Joint Center for Regulatory Studies http://129.3.20.41/eps/io/papers/0304/0304001.pdf NYtimes.com Dealbook, (February 1st 2012). Tracking Facebook’s Valuation http://dealbook.nytimes.com/2012/02/01/tracking-facebooks-valuation Sandel, M. (2009). Justice: What’s The Right Thing To Do?. Penguin Books

Siegel + Gale. (2012). Survey Finds Facebook and Google Privacy Policies Even More Confusing Than Credit Card Bills and Government Notices. Siegel + Gale press release, http://www.siegelgale.com/media_release/survey-finds-facebook-and-google-privacy-policies-evenmore- confusing-than-credit-card-bills-and-government-notices/

Van Dam, Piet Hein. (2012). The need for internet statistics and how to restore the balance and confidence of individuals. A case example. Amsterdam Privacy Conference
http://cdn.pressdoc.com/1/documents/18120-1354205498-Proceedings%20-%20Amsterdam%20Privacy%20Conference%202012%20-%20Paper%20Van%20Dam.pdf