Social Network Services: Competition and Privacy

Social Network Services (SNS) business models highly depend on the gathering and analyzation of user data to obtain an advantage in competition for advertising clients. Nevertheless, an extensive collection and analysis of this data poses a threat to users’ privacy. Based on an economic perspective it seems rational for Social Network Operators (SNO) to ignore the users’ desire for privacy. However, privacy-friendly services might have the potential to earn users’ trust, leading to an increased revelation of personal data. Addressing these issues, we examine the existing privacy problem in SNS in the context of competition between SNO to investigate whether competition tend to enhance user privacy or whether it is the root of its violation. Therefore, this paper investigates the interconnectedness of the market structure and privacy problems in SNS. After analyzing the users’ and the advertisers’ side of SNS, their competitiveness and its influence on user privacy are examined