acatech_STUDY_Internet_Privacy_WEB

> Internet Privacy
Options for adequate realisation
Johannes Buchmann (Ed.)
acatech STUDY
May 2013

Titel
Editor:
Prof. Dr. Dr. h.c. Johannes A. Buchmann
Technische Universität Darmstadt
Hochschulstraße 10
64289 Darmstadt
E-Mail: buchmann@cdc.informatik.tu-darmstadt.de
Recommended citation:
acatech (Ed.): Internet Privacy. Options for adequate realisation (acatech STUDY), Heidelberg et al.:
Springer Verlag 2013.
© acatech – National Academy of Science and Engineering 2013
Coordination: Dr. Karin-Irene Eiermann
Edited by: Jaina Hirai
Layout-Concept: acatech
Conversion and typesetting: Fraunhofer Institute for Intelligent Analysis and Information Systems IAIS,
Sankt Augustin
The original version of this publication is available at www.springer.com

> The acatech STUDY series
This series comprises reports presenting the results of projects carried out by
the National Academy of Science and Engineering. The studies are intended
to provide informed assessments and future-oriented advice for policy-makers
and society.

5
Authors
—— Prof. Dr. Dr. h.c. Johannes Buchmann, Technische Universität Darmstadt/CASED/acatech
—— Prof. em. Dr. Rafael Capurro, formerly Hochschule der Medien (HdM), Stuttgart
—— Prof. Dr. Martina Löw, Technische Universität Darmstadt
—— Prof. Dr. Dr. h.c. Günter Müller, Albert-Ludwigs-Universität Freiburg
—— Prof. Dr. Alexander Pretschner, Technische Universität München
—— Prof. Dr. Alexander Roßnagel, Universität Kassel
—— Prof. Dr. Michael Waidner, Technische Universität Darmstadt/Fraunhofer SIT/CASED
—— Dr. Karin-Irene Eiermann, acatech office
—— Dr. Michael Eldred, Cologne
—— Florian Kelbert, Technische Universität München
—— Daniel Nagel, Stuttgart
—— Maxi Nebel, Universität Kassel
—— Carsten Ochs, Technische Universität Darmstadt
—— Martin Peters, Albert-Ludwigs-Universität Freiburg
—— Dr. Philipp Richter, Universität Kassel
—— Fatemeh Shirazi, Technische Universität Darmstadt
—— Hervais Simo, Technische Universität Darmstadt
Authors

7
KolumnentitelContents
> Contents
Project 11
1 INTRODUCTION 13
1.1 Scope of project 13
1.2 Grounds for multidisciplinary analysis 13
1.3 Interdisciplinary synthesis 14
1.4 Description of our approach and methodology 14
1.5 Structure 14
2 CORE VALUES AND THEIR RELATION TO PRIVACY 17
2.1 Privacy 17
2.2 Our approach 18
2.3 Free self-determination 19
2.4 Privacy in relation to free self-determination 20
2.5 Democratic participation 21
2.6 Privacy in relation to democratic participation 21
2.7 Economic well-being 22
2.8 Privacy in relation to economic well-being 22
3 The Characteristics and Benefits of Online Social Networks 25
3.1 Technical perspective 25
3.1.1 OSN stakeholders 25
3.1.2 Social networking data 26
3.1.3 Data collection and usage 26
3.1.4 OSNs as the new desktop 27
3.2 Social-scientific and ethical perspective 27
3.2.1 Social interactions 27
3.2.2 User groups and purposes 28
3.3 Economic perspective 29
3.3.1 Marketing variants for personal data 29
3.3.2 Measures of economic effectiveness 30
3.4 Legal perspective 30
3.4.1 Data Protection Law 31
3.4.2 Existing regulations independent of ICT 33
3.4.3 Conclusion 35
3.5 Summary: An interdisciplinary view of OSNs 35

8
Internet Privacy
3.6 The benefits of Online Social Networks 35
3.6.1 The benefits of OSNs for free self-determination 36
3.6.2 The benefits of OSNs for democratic participation 38
3.6.3 The benefits of OSNs for economic well-being 40
3.6.4 Summary: The benefits of Online Social Networks 41
4 Characterization of E-Commerce 43
4.1 E-commerce from an economic and technical perspective 43
4.1.1 E-commerce stakeholders 44
4.1.2 E-commerce: Co-evolution of technology and markets 45
4.1.3 Classical e-commerce: Market and technical transaction support 47
4.1.4 Cooperative e-commerce: Technology to coordinate markets 48
4.1.5 Data centric e-commerce: Technology for data 49
4.2 E-commerce from the legal perspective 51
4.3 E-commerce from a sociological and ethical perspective 53
4.3.1 Outside the market frame 53
4.3.2 Within market frame 54
4.4 The benefits of e-commerce 55
4.4.1 The benefits of e-commerce for free self-determination 56
4.4.2 The benefits of e-commerce for democratic participation 57
4.4.3 The benefits of e-commerce for economic well-being 58
5 Privacy Threats and their Impact on the Core Values 61
5.1 Conditions for privacy protection in OSNs 61
5.1.1 Awareness 62
5.1.2 Control 62
5.1.3 Trustworthiness 63
5.2 Threats to privacy in OSNs 64
5.2.1 Threats regarding awareness 64
5.2.2 Threats regarding control 65
5.2.3 Threats regarding trustworthiness 66
5.3 The impact of privacy threats on the core values 67
5.3.1 Threats to free self-determination 68
5.3.2 Threats to democratic participation 69
5.3.3 Threats to economic well-being 69
5.4 Threats to privacy in e-commerce and their consequences for the core values 70
5.5 Conclusion 71

9
Contents
6 Options for Achieving Privacy in Online Social Networks and E-Commerce 73
6.1 Awareness 74
6.1.1 Regulatory options for awareness 74
6.1.2 Technical options 75
6.1.3 Educational options 76
6.2 Control 79
6.2.1 Control by regulation 79
6.2.2 Technical options for control 81
6.2.3 Educational measures regarding control 84
6.3 Trustworthiness 86
6.3.1 Trustworthiness by regulation and rules 86
6.3.2 Technical options regarding trustworthiness 89
6.3.3 Educational measures regarding trustworthiness 90
6.4. Conclusion 90
LiteraturE 93

11
Project
Project
PROJECT MANAGEMENT
Prof. Dr. Dr. h.c. Johannes Buchmann, Technische Univer-
sität Darmstadt/CASED/acatech
PROJECT GROUP
—— Prof. em. Dr. Rafael Capurro, formerly Hochschule der
Medien (HdM), Stuttgart
—— Prof. Dr. Martina Löw, Technische Universität
Darmstadt
—— Prof. Dr. Dr. h.c. Günter Müller, Albert-Ludwigs-
Universität Freiburg
—— Prof. Dr. Alexander Pretschner, Technische Universität
München
—— Prof. Dr. Alexander Roßnagel, Universität Kassel
—— Prof. Dr. Michael Waidner, Technische Universität
Darmstadt/Fraunhofer SIT/CASED
—— Dr. Wieland Holfelder, Google Germany
—— Dr. Göttrik Wewer, Deutsche Post DHL
—— Michael Bültmann, Nokia GmbH
—— Dirk Wittkopp, IBM Deutschland GmbH
ASSIGNMENTS/STAFF
—— Dr. Karin-Irene Eiermann, acatech
—— Martin Peters, Albert-Ludwigs-Universität Freiburg
—— Carsten Ochs, Technische Universität Darmstadt
—— Fatemeh Shirazi, Technische Universität Darmstadt
—— Hervais Simo, Technische Universität Darmstadt
—— Florian Kelbert, Technische Universität München
—— Maxi Nebel, Universität Kassel
—— Dr. Philipp Richter, Universität Kassel
—— Daniel Nagel, Stuttgart, Independent
—— Dr. Michael Eldred, Cologne, Independent
PROJECT COORDINATION
Dr. Karin-Irene Eiermann, acatech
PROJECT PROCESS
07/2011 – 06/2013
FUNDING
The project was financed by the Federal Ministry of
Education and Research (support code 01/08/2011 –
30/09/2012: 01BY1175, 01/10/2012 – 31/01/2013:
16BY1175).
Project administrator: 01/08/2011 - 30/09/2012: Project
Management Agency – part of the German Aerospace Center
(PT-DLR)
01/10/2012 - 31/01/2013: VDI/VDE Innovation + Technik
GmbH
acatech would also like to thank the following companies
for their support:
Google Germany, Deutsche Post AG, Nokia GmbH,
IBM Deutschland GmbH

13
Introduction
1 INTRODUCTION
1 See list of participants in the preface of this volume.
1.1 SCOPE OF PROJECT
The present book is the second publication in a large-
scale, interdisciplinary research project on Internet Privacy
which was launched in mid-2011.The origin of the project
is a condition frequently called the “privacy paradox”. This
paradox refers to the fact that people use the Internet ex-
tensively and often relinquish their data all too willingly,
yet simultaneously harbor significant fears and worries
– some justified, some exaggerated – that their privacy
will be compromised. In short, we observe a coexistence
of acceptance and fear with regard to Internet usage.
This paradox may hinder the enormous potential of the
Internet for users, businesses, and the economy, as users
may be reluctant to use services that could benefit them
significantly.
The goal of our interdisciplinary project was to develop re
commendations (including technical prototypes) for policy
makers and legislators, businesses, industry, researchers,
and academia that promote a culture of privacy and inspire
trust in Internet applications and online data transmission.
These recommendations apply to the fields of education,
business ethics, technology development, legal matters,
and research demands. Following are proposed social rules
and norms, a clear economic and legal framework, as well
as technical solutions describing how an adequate measure
of privacy can be evaluated and implemented in various
Internet contexts. Web 2.0 (including social networks) and
e-commerce are the primary focus areas.
These diverse requirements can best be fulfilled by an
interdisciplinary approach that brings together expertise
from various academic disciplines. Researchers from the
fields of information ethics, sociology, law, economics, and
technology contributed to the evaluation and structuring
of our ideas, and the development of holistic options with
wide-ranging application potential. Besides this academic
input, the project group benefited immensely from the
practical business perspectives of the Internet and com-
munication companies involved.1 The strategic decision
to involve corporate players in the project enhanced the
quality and practical reference points of the academic re-
search and added relevance as discussions evolved around
practical business cases.
We apply a normative, value-based approach to a culture
of privacy and trust on the Internet. This value-based ap-
proach helps to structure the complex system of economic
stakeholders, technical framework conditions, legal re-
quirements and dynamic societal parameters that come
together on the Internet and utilises the main pillars of
a democratic society, including free individuals and eco-
nomic well-being for all.
To reduce complexity and ensure thorough scientific ex-
amination, we limited the number of application fields.
In the challenge to identify and select representative ap-
plication areas for our options and recommendations, we
were guided by an individual perspective and the ques-
tion: what are people currently using? What are the sourc-
es of insecurities and legal disputes at the present time?
We identified online social networks and e-commerce as
the most widely used and therefore the digital spaces/
areas most affected by insecurities and privacy concerns.
Due to the near-universal nature of these two application
areas and their successive convergence, we surmise that
many conclusions drawn from them may be applicable for
other relevant areas with potential for privacy violations,
such as e-government and e-health.
1.2 GROUNDS FOR MULTIDISCIPLINARY ANALYSIS
As mentioned above, the project brought together various
academic disciplines in the common pursuit of identify-
ing the conditions for a culture of privacy and trust on
the Internet. In the first phase of the project, the authors

14
Internet Privacy
2 Buchmann 2012.
3 General Assembly 2000.
saw a need to view privacy from various perspectives and
juxtapose the different points of view and angles of ref-
erence. This way they are made explicit and valued as
equally valid ways of looking at privacy. The desires and
fears of users were studied empirically using social science
methods. The ethicists provided a comprehensive overview
of ethical and philosophical approaches to privacy and
applied them to the cyberworld. There is also a detailed
account of business privacy concerns online: as many ser-
vices are paid for with user data, the question arose of
what this means for the user. Another part of the study
explored both the existing technical options to undermine
privacy protection and those to enhance privacy protec-
tion (privacy-enhancing technologies, PETs). The final part
examined the applicable legal framework surrounding
data and privacy protection. The results of this analysis
were published as Volume One of this project.2 In order to
give equal weight to each of the represented disciplines,
the setup is an inherently multidisciplinary one, not an
interdisciplinary joint endeavor.
1.3 INTERDISCIPLINARY SYNTHESIS
The formation of a culture of privacy and trust is a common
task for all involved disciplines and actors and can only
be realised through a synthesis of diverse perspectives. The
present volume is characterized by a truly interdisciplinary
approach. Based on the multidisciplinary analysis each
researcher contributed his/her own particular approach
to the applicable areas and the specific challenges to be
addressed within those areas. The representatives of each
discipline worked together to find a common denominator
which allows for common acceptance of the proposed op-
tions. Looking at problems and application areas together,
a synthesis of the disciplinary approaches is realised and
executed through consideration and accommodation of the
various discipline-based concerns and perspectives.
1.4 DESCRIPTION OF OUR APPROACH AND
METHODOLOGY
In our efforts to develop options for improving privacy
and trust on the Internet, we apply a normative and
value-oriented approach. While interpreting privacy as a
mode of social being, we do not regard privacy as a concept
which has an intrinsic value. Rather, we consider privacy to
be valuable and worthy of protection only insofar as it is
crucial for the realisation, protection and improvement of
selected values which provide the framework for our plural-
istic democratic societies in Europe. We are anchored in a
European value system, yet we believe that the values we
have chosen – free self-determination, democratic partici-
pation, and economic well-being – have a broader appeal.
They are an intrinsic part of universally accepted human
rights and indispensible for a dignified life, free from hun-
ger and from fear of oppression, violence, and injustice.3
1.5 STRUCTURE
This normative value-oriented approach predetermines the
structure of our argument that is laid out in the present vol-
ume. We begin with a definition of the concept of privacy
as we understand it and a description of three core values
we have chosen as our framework. Chapter 2 concludes with
an explanation of the way these three core values depend
on the element of privacy for their realisation. In Chapter 3
and Chapter 4 we explore our application areas, online social
networks (OSNs) and e-commerce, in great detail. Chapter 3
describes the stakeholders, the categories of data, the func-
tions and implications of OSNs from a technical, sociologi-
cal, ethical, and economic perspective and details the legal
regulations which apply to this online area of application.
Chapter 4 introduces the stakeholders and characterizes the
transactions which occur in e-commerce. The technology be-
hind e-commerce transactions, their social impact, ethical

15
Introduction
4 acatech 2013.
issues concerning e-commerce and the legal environment are
all described to gain a comprehensive, multi-perspective un-
derstanding of this complex area of online application. Both
Chapter 3 and Chapter 4 also detail the benefits OSNs and
e-commerce bring to the realisation of the core values.
Chapter 5 shows how these benefits may be impaired by
threats and privacy risks which appear in the context of
these two applications. First the authors introduce primary
conditions for privacy protection and then go on to show
in which ways these conditions – awareness, control, and
trustworthiness – are threatened. In accordance with our
overall line of reasoning the next step shows how these pri-
vacy threats undermine our three core values: free self-de-
termination, democratic participation, and economic well-
being. Finally in Chapter 6, the authors present a variety
of options for achieving privacy in OSNs and e-commerce
transactions. These options are divided into the categories
of awareness, control, and trustworthiness, those conditions
for privacy protection which were introduced in Chapter 5.
Regulatory, technical, and educational measures as well as
good practices to improve awareness, control, and trustwor-
thiness are delineated.
In this volume we do not yet offer an evaluation of the
options presented in Chapter 6. Rather, they are meant to
showcase a wide range of possible measures that could be
implemented for privacy protection. The actual evaluation
of the options and subsequent deduction of recommen
dations for action for policy-makers and legislators, busi-
nesses, and civil society are published in a separate publica-
tion entitled acatech POSITION Internet Privacy.4

17
Core Values
2 CORE VALUES AND THEIR RELATION TO PRIVACY
5 On the choice of the term ‘cyberworld‘ in preference to ‘cyberspace’ Buchmann 2012, Sections 2.3.5 and 2.4.5.
6 Altman 1975, p. 6.
7 Altman 1975, p. 22.
8 Altman 1975, p. 29.
9 Buchmann 2012, Sections 2.2.5-2.2.6.
10 Buchmann 2012, Sections 2.2.1-2.2.5, 1.10 and 2.4.6-2.4.10.
This chapter provides the basis for our overall goal of devel-
oping recommendations on how a culture of privacy and
trust on the Internet can be fostered. We begin by present-
ing an understanding of privacy developed in the first stag-
es of this project that is used throughout this document.
Since the recommendations are derived from core values
that we hold fundamental in our European democratic tra-
dition and are also in line with an underlying understand-
ing of human freedom, this chapter introduces the core val-
ues — free self-determination, democratic participation, and
economic well-being — and indicates why we have selected
them. Following this, we discuss each of the core values in
greater detail, taking the perspectives of the social scienc-
es, ethics and law into account. We also elaborate on the
specific relationship between the core values and privacy.
Showing the inextricable linkage between privacy and the
basic principles of a free, pluralistic and democratic society
will lay the foundation for transferring this relationship to
the cyberworld,5 and more specifically, to two exemplary
Internet-application areas: OSNs and e-commerce.
2.1 PRIVACY
One definition we have found which takes into account
a large number of relevant aspects was developed in the
1970s by social psychologist Irwin Altman, who concep-
tualized privacy as ”an interpersonal boundary process by
which a person or a group regulates interaction with others.
By altering the degree of openness of the self to others,
a hypothetical personal boundary is more or less recep-
tive to social interaction with others. Privacy is, therefore,
a dynamic process involving selective control over a self-
boundary, either by an individual or a group.”6 Privacy for
Altman is consequently in general an “interpersonal event,
involving relationships among people.”7 According to his
way of thinking, privacy norms are subject to society’s defi-
nition, while individuals apply these norms within social
situations, depending on the context as well as on the de-
sired state of privacy they would like to achieve. In addition,
drawing interaction boundaries regulates “Control of Input
from Others” and “Control of Output to Others”8 — in other
words, the flow of information (outwards and inwards). In
sum, Altman accounts for both the individual as well as
collective dimension of privacy; he allows for the concep-
tion of privacy as a state of affairs to be achieved by vari-
ous means: material (walls, clothes, technology), semiotic
(signs) and normative (social rules and customs); and he
is clear about the fact that while privacy might be related
to information flow, it is generally about social situations.
If, however, personal privacy (in contradistinction to the pri-
vacy of private property9) is to be understood as a mode of
social being, i.e. as a phenomenon relating to how human
beings share the world with one another, Altman’s defini-
tion must be examined closely, as an explicit phenomeno-
logical unfolding and subjected to critique.10 Accordingly,
personal privacy is fundamentally the aspect of social in-
terplay relating to how persons show themselves as who
they are, which includes the negative or deficient modes of
such self-showing, namely, a privatio of self-revelation. Pri-
vacy thus consists of concealing who you are — either com-
pletely (anonymity, secrecy, incognito), or concealing only
certain aspects of one’s identity, (use of a pseudonym) or
concealing identity only in certain situations and contexts
(location and time). Privacy is multifaceted and complex,
but all these facets relate to a person’s identity through
the various dimensions of self-display and self-concealment.
In the Western world, personal privacy concerns an indi-
vidual freedom of self-determining how to reveal oneself in

18
Internet Privacy
11 To do so would be to follow here Daniel J. Solove, who holds that “The value of ameliorating privacy problems lies in the activities that privacy
protections enable.” Solove 2008, p.85. However, against this argument from consequences, it must be kept in mind that the social interplay
of revealing and concealing who you are is a core aspect of freedom per se that cannot be traded off for functional benefits or consequences.
12 Chakrabarty 2007.
13 Buchmann 2012, Section 2.5.
the ongoing interplay of the social world. The interplay of
identity formation is as much a freedom to display oneself
as it is to withdraw and conceal oneself or to present one-
self with a certain ‘spin’, i.e. self-display (showing off who
you are) and self-concealment are two sides of the same,
multifaceted coin. Furthermore, freedom pertains not to
an actual state of affairs, but to a potential to determine
one’s own life-movements within the interplay with others,
so it has the aspect of a social power play (that may also
enter the political domain) which by no means guarantees
a successful outcome. Hence, informational privacy, i.e. the
freedom to self-determine what information (digital data)
is released into or withheld from the public domain of the
cyberworld, is merely derivative of the more fundamental
individual freedom to play the game of showing oneself to
others or concealing oneself from them in the abovemen-
tioned multifaceted sense.
We too, like Altman, conceive of privacy as a state of af-
fairs being inherently social, that is, by “privacy” we mean
a specific mode in which the social interplay is acted out.
What follows from this is that privacy does not mean the
isolation of an individual from the (social) world; rather, the
concept refers to the specific and dynamic configuration of
revealing and concealing who you are within the social in-
terplay among the social players. However, while being sub-
ject to societal, customary definition, privacy preferences
(i.e. what, how, how much, when and where an individual
shows or conceals who he or she is) vary from one indi-
vidual to another, so our understanding of privacy has to
allow for a spectrum of individual privacy preferences. Sec-
ondly, whereas we are interested in informational privacy,
we must always keep in mind that privacy is about social
situations and people living their lives with one another.
Therefore, we consider privacy a specific form of social inter-
play. And finally, here we do not leave the issue of whether
to conceive of privacy as having some “intrinsic value”.11
Nor do we attempt to encompass all the phenomena falling
under the rubric of privacy. Instead, in the present limited
context, we treat privacy only insofar as it pertains to our
chosen core values.
2.2 OUR APPROACH
Any presentation based on cultural values or basic social
principles has normative features. Socio-cultural values arise
from the desire to live well in a given society and assume
the shape of norms and rules for human behaviour. Insofar
as the selection of three core values we deem indispens
able for a flourishing and free society — self-determination,
democratic participation, and economic well-being — we
follow a normative approach. One obvious reason for this
is the value-context in which this text is produced. We be-
lieve that value-orientation is a vital precondition for any
culture of privacy and trust, both in the offline world and
in the cyberworld. We are well aware that a normative ap-
proach is culturally specific and is indebted to the ideal of
a European community of values. We are also aware that
this ideal has been thoroughly deconstructed.12 Whereas
such deconstruction may modify our understanding of
these values in the sense that they become visible as a
culturally-generated ideal, this consideration does not lead
to a repudiation of these values. As the values cherished by
Europeans correspond to a deeper understanding of free-
dom whose validity is upheld interculturally, our approach
is open to a dialogue between all those committed to hu-
man freedom per se, albeit in various cultural guises.13 An
approach based on considerations of human freedom per se
is no longer normative (since freedom is an option for living
together, not a moral imperative), but sheds light on how
human beings can freely share a world.

19
Core Values
14 The distinction between what and who is essential; Buchmann 2012, Section 2.2.1. Cf. also ”While literature on the ‘digital identity’ is growing,
newer research has shown that it is not enough to analyse identity questions in terms of those matters that mostly concern the identification
of a person rather than his or her identity as a person (philosophy distinguishes between identity of the same — idem — and identity of the
self — ipse).” EGE 2012, p. 38.
15 Buchmann 2012, Section 2.2.2.
Within this value framework, our three selected core
values: free self-determination, democratic participation
and economic well-being, relate intimately with human
freedom. Free self-determination is a precondition for
fostering free, self-determined and responsible individu-
als constituting a free society. Democratic participation,
a value guaranteed on the political plane by the German
constitution, ensures the sovereignty of the people and
is also a precondition for a free democratic society. Eco-
nomic well-being is a basic goal of a free market economy
where cutthroat or unfair competition among the players
is suppressed for the sake of the freedom and fairness of
interplay. Good governance needs not only to ensure ba-
sic economic well-being for the people in the sense of a
standard of living, but also to secure the framework within
which economic players can freely and fairly engage in
pursuing a livelihood.
When elaborating upon these values of freedom, our ulti-
mate objective is to deliver a richer view of each value by
bringing together multiple perspectives into a multifaceted,
inclusive description. Such a comprehensive depiction of
the various dimensions of a core value is necessary to as-
sess an Internet application’s potential for enhancing and
promoting that value whilst at the same time identifying
possible risks and threats to it, tasks we take on in Chapters
4 and 5. We integrate sociological, ethical, legal, economic
and technical perspectives to pinpoint opportunities as well
as potential threats for both individuals and society as a
whole (sociological and ethical), for users and consumers
(economic), and the respective constitutional rights (e.g.
the right to informational self-determination) and national
objectives e.g. democracy (legal). Technological solutions
and limitations provide boundaries for proposals as to how
our values can be manifested in the cyberworld.
A multi-perspective approach leads to uncovering viable op-
tions from the opportunities and risk-scenarios identified.
A multidisciplinary perspective is also helpful for establish-
ing context when evaluating threats to a given core value,
where a seemingly harmless deviation in one context can
have detrimental consequences in another. We now pro-
ceed by elaborating each of our core values and exploring
how privacy as outlined above relates to each one of them.
2.3 FREE SELF-DETERMINATION
Free self-determination lies at the core of any understanding
of freedom because ultimately each individual human being
controls his/her own life-movements, even when they submit
freely or under compulsion to another, whether it be another
person, an institution such as the state, or the tenets of a
religion. Free self-determination also lays the foundation for
creating a singular identity. Identity-formation, in turn, is the
interplay with the world through which a who14 finds its self
reflected by the world, thus casting and assuming its self-
identity.15 One’s identity goes hand in hand with revealing
and concealing who one is and is already shaped within the
rules of interplay of a concrete culture within a shared world.
A self has to be free to shape its own life and to freely ex-
press its decisions in an interplay with other self-determining
selves if true freedom is to be achieved. The free — invari-
ably courageous — existential shaping of one’s own life also
pushes the boundaries of how others can shape their own
identities in the shared world by showing alternative socio-
cultural options for identity formation, which historically are
constantly in flux. In this sense, self-determination cannot
be restricted to individual aspects of life (individualism), but
colours and influences the freedom of social interplay as a
whole, and not only within the European context.

20
Internet Privacy
17 Solove 2011.
18 International Covenant on Civil and Political Rights (ICCPR), Art. 17; Universal Declaration of Human Rights by the United Nations (UDHR),
Art. 12; European Convention on Human Rights (ECHR), Art. 8.
19 Art. 2 (1) GG: Jeder hat das Recht auf die freie Entfaltung seiner Persönlichkeit, soweit er nicht die Rechte anderer verletzt und nicht gegen die
verfassungsmäßige Ordnung oder das Sittengesetz verstößt.
20 Art. 1 (1) GG: Die Würde des Menschen ist unantastbar. Sie zu achten und zu schützen ist Verpflichtung aller staatlichen Gewalt.
21 EU Directive 95/46/EC.
2.4 PRIVACY IN RELATION TO FREE
SELF-DETERMINATION
Free self-determination is dependent on both intrinsic and
extrinsic factors. It requires a self capable of presentation
within the interplay with others, and thus also able and
willing to risk participating in the play of concealment and
disclosure.16 However, free self-determination concurrently
implies a self freely able to cast its identity within the im-
plicit and explicit rules of interplay in a given society. A free
society thus provides a framework within which such choic-
es of the self are both safeguarded and catalysed, including
how this self can present in different contexts, both reveal-
ing and concealing certain facets of the self. The tension be-
tween free self-determination and the interests of others or
the state is mirrored in privacy debates when, for instance,
privacy is restricted for security reasons.17 However, it has
to be kept in mind that free self-determination also bene
fits society by enabling and fostering creative, courageous
citizens. Free self-determination as central to any kind of
human freedom goes hand in hand with privacy since the
individual freedom to reveal and conceal — i.e. to pretend
to be, in the broadest sense, who you are — is an essential
aspect of free, self-determined life-movements.
A major safeguard of freedom is privacy in the restricted
sense of being able to withdraw certain aspects of the self
from (public) disclosure into concealment. Self-presentation
has self-concealment as its inverse. If privacy is not guar-
anteed as a retreat from the shared world, the self is de-
prived of necessary physical, psychological, spiritual and
emotional preconditions for the reflection and evaluation
that enable free formation of identity. Privacy, however, is
not synonymous with the private sphere, but also encom-
passes the freedom of self-presentation in public whilst
maintaining concealment of other aspects of one’s self, i.e.
there is an inherent tyranny in demanding that any self
should totally reveal who they are, and in many contexts
anonymity must be safeguarded in public intercourse such
as commerce.
However, safeguarding privacy cannot be simply decreed. A
single all-encompassing ’right to privacy’ is not granted in
the European context. While Art. 7 of the Charter of Fun-
damental Rights of the European Union (CFREU) guaran-
tees an abstract respect for private life,18 Art. 8 CFREU is
more specific in protecting personal data. In Germany, the
complex of privacy can only be described legally via the
interplay among several basic rights accorded to individu-
als and the public interest. With regard to privacy on the
Internet, the basic right to informational self-determination
in Arts. 2.119 and 1.120 Grundgesetz (GG, the German con-
stitution) is the most prominent, from which systemati-
cally follow all German data protection regulations. The
EU Data Protection Directive21 does not mention informa-
tional self-determination explicitly, but the EU data protec-
tion acts are all heavily influenced by this German basic
right and the associated jurisprudence. Informational self-
determination is not a ”right to be left alone in isolation”,
but rather the individual’s right to monitor personal infor-
mation in the process of communication with others. This
concept is in accord with Altman’s privacy definition, but
misses the basic distinction between the what of informa-
tion and the who of free selves living their self-determined
lives, both showing and concealing who they are. Indeed,
without having the who behind the what of digital data

21
Core Values
23 Westin 1967, p. 32.
circulating in the cyberworld, it is impossible to distinguish
between data needing privacy-protection and data that is
innocuous. Thus, if the principle of self-determination over
personal data were applied in a blanket manner, the cyber-
world itself would become impossible, because every single
movement of an individual in the cyberworld necessarily
leaves behind a digital trace whose informational release
would require personal consent. This is not a trivial detail.
Furthermore, privacy cannot be protected without an active
involvement of the self, as only the self is able to determine
the boundaries and play of personal concealment and also
subtle modes of disclosure. Conversely, society must also be
taken into account, since personal preferences might lead
to a level of self-concealment detrimental to other aspects
of sharing a social world. In certain contexts it is impera-
tive that a self reveals who they are for the sake of public
order, e.g. when boarding a flight at an airport or when
an income-earner is compelled to assume the identity of a
taxation file number.
2.5 DEMOCRATIC PARTICIPATION
Democratic participation, here viewed far more broadly
than the people’s right to participate in free and fair elec-
tions to elect a government, is a core characteristic of per-
sonal freedom. Namely, it encompasses everyone‘s freedom
of self-presentation in the form of (public) self-expression
and thus the freedom to participate in social goings-on and
to have one’s say, including in elections.22 Such expressive
freedom cannot be lived by distancing oneself from oth-
ers and the world, but only by taking a dynamic stance in
the interplay with others in our shared world. Freedom of
expression, political and otherwise, is one essential facet
of the freedom of individual life-movements. Participation
in public power plays at all levels safeguards the fluidity
of interplay, freeing it from overly-restrictive rules and cus-
toms by addressing and challenging them via e.g. art or
the full gamut of critical discourses. Democratic participa-
tion is also a guardian of personal autonomy. A self cannot
be truly autonomous in the sense of being self-determined
unless it also participates critically in the ongoing social
dialogue in an interplay with other self-determining selves
that contributes to shaping what existential options a given
society offers.
2.6 PRIVACY IN RELATION TO DEMOCRATIC
PARTICIPATION
To what extent can democratic participation benefit from
and tolerate privacy and how do they interact and depend
on each other? If privacy is a privatio in the sense of con-
cealing certain aspects of the self from public disclosure, then
democratic participation, understood as free and fair social
interplay, requires that such personal privacy be safeguarded.
A stock example is the secret ballot essential to free and fair
elections. Personal privacy guarantees the freedom of choice,
that is, the choice whether certain opinions, facts, and facets
of a self’s personal world and self-presentation to the world
are disclosed or concealed, and within which circle of open-
ness, broad or narrow. However, privacy is also a necessary
condition for democratic participation insofar as privacy es-
tablishes the zones and contexts that make selectively negoti-
ating the social rules of interplay and citizens’ relation to the
state possible in the first place: privacy allows for ”limited and
protected communication”.23 It safeguards the opportunity for
group members to share their worldviews, exchange religious
or other sensitive/private views, and to engage in debate in
self-selected contexts. The self you present in various contexts,
including what you say when and where and to whom, is an
essential aspect of modulating and self-determining your own
democratic participation in society. In this sense, not only in-
formational privacy, but the personal freedom both to express
and show one’s self and to refrain from such self-disclosure,
contributes to democratically shaping the political will.

22
Internet Privacy
24 Buchmann 2012 Section 2.2.11.
26 ibid.
As for the sovereignty of the people who take part in the polit-
ical formation of will and decision-making processes through
public debate, it is vital for every citizen to be able to engage
in free speech and to assemble freely as their statutory right
without fear of repression. Conversely, if verbal expressions
become public beyond the chosen context, individuals might
be deterred from speaking freely. Likewise, these individuals
might be deterred from taking part in assemblies if everyone
were able to learn that they had attended. Privacy at certain
times or locations is necessary not only for people to par-
ticipate, but also to be able to participate without coercion.
Such legally-sanctioned concealment, i.e. privacy, safeguards
self-determined democratic participation. It may also be im-
portant for some people to keep private (secret) party, club
or union memberships, to engage in such activities without
unfair social pressure. Privacy is consequently a vital aspect
of democratic participation.
2.7 ECONOMIC WELL-BEING
Economic well-being in a (reified) market economy mediated
by commodities is equated with earning a livelihood. Earned
income is spent on those commodity services and products
of all kinds that contribute to living well in a material sense.
From this way of life arise the needs that can be satisfied
by consumers spending income.24 Income is gained through
partaking in the gainful game25 with other players (who in-
clude the collective enterprise players striving to earn profit-
income). This game is played by competing for income within
the constantly fluctuating, estimating interplay among
economic players mediated by things of value. Any positive
individual outcome of the gainful game thus represents a
livelihood earned for the player concerned, along with the
player’s dependants. For a whole economy, well-being in one
sense amounts to flourishing income-earning for all involved.
In another sense, however, economic well-being resides in the
freedom and fairness of how the gainful game is played out
in striving for potential gain. The competition for income in
the gainful game of a market economy should be fair; any-
thing else is an abuse of social power. Such fairness is endan-
gered, in particular, if any of the players is able to secure any,
sometimes subtle or hidden, kind of monopoly, whether it be
on the side of the employers, the enterprises, the financiers or
the landowners.26 (An interventionist economy may have also
state enterprises, including such that are state monopolies.)
For employees, in particular, who earn wages and salaries
as income, economic well-being consists not only in earning
enough, but also in having one’s abilities fairly estimated
and valued by the market (usually the particular employer).
All income earners as consumers have an interest in being
able to procure goods and services supporting a good life at
reasonable prices, i.e. prices undistorted by any kind of mo-
nopolistic or other unfair trade practices. Freedom is served
only when the economic interplay of the gainful game is fair
and not unnecessarily hindered.
2.8 PRIVACY IN RELATION TO ECONOMIC WELL-BEING
We have seen that privacy is indispensable for realizing the
core values of free self-determination and democratic partici-
pation. Regarding the third core value, economic well-being,
however, things are not as clear-cut. On the contrary, in the
context of today’s emerging cyberworld, privacy requirements
are typically perceived as a threat to economic well-being. In
this section we examine to what extent this may be the case.
Data-centric business models incorporating the necessity of
achieving economies of scale may generate temporary mo-
nopolies. A revised and adapted understanding of privacy, at
first glance apparently unrelated to information asymmetries,
may be a means of enabling a sustainable equal power distri-
bution amongst the stakeholders, which may indirectly influ-
ence economic well-being.

23
Core Values
We contend that companies may have difficulties and ul-
timately may be forced out of business if they face very
strict regulation in terms of data-protection guidelines. The
economic players most affected by privacy regulations, and
accordingly a focus of our study, are data-centric services.
Data-centric services offer seemingly free services (that cost
something, perhaps a great deal of money, to provide) in ex-
change for personal data. While users pay a certain ‘price’
(their personal data, as yet unmonetised) for a certain ser-
vice or good, the data-centric service determines another
(realised monetary) price to be paid by third parties (such
as advertising agencies) with an interest in the personal
data originally provided by the users of the data-centric ser-
vice. Perhaps such a business model per se violates a well-
considered concept of freedom.
Negative impacts of privacy on data-centric services
Several factors may make the provision of data-centric ser-
vices more expensive, thereby reducing the profits of the
companies offering these services. If a business model is
based on the sale of personal data gathered from custom-
ers, who in exchange receive cheap or free goods or servic-
es, that business model will be compromised and services
reduced if data-protection regulations prohibit personal
data from being processed and passed on in any form.
The same is true if legal regulations require anonymiza-
tion of data which makes them less valuable for the min-
ing of commercially pertinent information. Furthermore,
acquiring privacy-enhancing technologies (PETs) can be
an expensive investment for private companies. If data-
protection restrictions are imposed only on some compa-
nies by national legislation they may face a distinct disad-
vantage vis-à-vis their transnational competitors who are
not subject to these restrictions.
Another consideration is that if companies do not take
measures to protect (informational) privacy, this may have
to be done by the state. The legislator may be reluctant
to impose privacy regulations on private businesses for the
reasons stated, yet may still deem it necessary to imple-
ment privacy measures. This represents a burden on certain
enterprises and indirectly on the state budget and tax-
payers, insofar as the economy generates less total income
and hence a smaller tax-base. This way of arguing basi-
cally from the viewpoint of benefits, efficiency and effec-
tiveness, of course, points to economic consequences and
results, whether they be benefits or disadvantages, either
for certain economic players or for the whole economy or
the state, thus pushing aside considerations of the intrinsic
(non-economic) value of privacy as an essential aspect of
personal freedom, which in the first place is a potential,
not an actuality. To see this, one must step back from a
narrow view of privacy as informational data privacy and
the potential monetization of private data. From this per-
spective, the freedom to reveal or conceal who you are in
various contexts is not negotiable for the sake of economic
benefits, whether they be enhanced income generation or
lower prices for some or for all. Furthermore, there is a fun-
damental flaw in regarding economic well-being as resid-
ing solely in the income actually generated by individuals,
sectors or the economy as a whole since the gainful game
is also a way of life borne by the actions of players whose
freedom consists of the potential promised by the striving
for income, i.e. “the pursuit of happiness”, and not in guar-
antees of secured success. In this latter sense, economic
well-being amounts to a free and fair gainful game.
Positive impacts of privacy on data-centric services
Leaving these considerations aside, however, recent empiri-
cal studies have shown that protecting customers’ privacy
also can have a positive impact on income generation and
corporate profits, in particular. One aspect in this regard
is the economic paradigm that information asymmetries
due to a lack of data-privacy have negative impact on the
economy in terms of their actual results. The other aspect is
the enhanced reputation of a company consumers trust be-
cause they feel secure in entrusting their data to it without
the fear of inappropriate use in other contexts.

24
Internet Privacy
27 Akerlof 1970, pp. 488–500.
28 Turow et al. 2005, p. 25.
Regarding the first aspect, economics Nobel laureate Jo-
seph E. Stiglitz and his team have shown that information
asymmetries lead to asymmetries in market economic pow-
er, i.e. unfairness in the gainful game, and thus cause eco-
nomic problems.27 Asymmetry means that certain parties
have an information deficit and therefore are at an unfair
disadvantage in the market interplay. Information asym-
metries are present when there is insufficient transparency
for customers about how their personal data is used and,
accordingly, what their personal data is worth for a given
data-centric service. The latter may use personal data for
new transactions which lead back to the consumers even if
they may not know of the existence and use of aggregated
information. Our elaborated understanding of privacy im-
plies that an important aspect of privacy is informational
self-determination. Typically, a lack of informational self-
determination starts with an information deficit on the part
of the user. As a result, the user cannot control the use of
his or her information. According to Stiglitz’ theory, this in-
formation deficit may have detrimental effects on overall in-
come generation, which implies that strengthening privacy
may be a requirement for economic well-being conceived as
actually achieved income-generation. Information deficits
based on a lack of informational privacy presumably ac-
celerate economies of scale and increase consumer/user
switching-costs, which may have positive short-term impact
on economic output and individual productivity, but in the
long run may lead to monopolisation and thus threaten
economic well-being conceived as free and fair economic
interplay Therefore, we can expect that strengthened infor-
mational self-determination might reduce the risks of said
information deficits occurring.
The second aspect comes into play when a product becomes
more valuable for the consumer because of additional fea-
tures. This is the case if the producer or seller of that prod-
uct behaves in a privacy-friendly manner. As users become
aware of their privacy requirements, privacy-friendliness can
become a valued feature of data-centric services that may
turn out to be a competitive advantage. Recent efforts by
companies such as Google (with Google+) and Facebook
to add privacy features and create more transparency for
users show the importance companies are beginning to as-
sign to privacy, or rather the relevance of privacy in users’
or customers’ decision-making. In a contested market envi-
ronment, privacy-friendliness provides a competitive edge
and customers have shown a willingness to pay for the pri-
vacy of their personal data. Studies suggest that overall,
the importance of privacy for the exchange of products and
services is dependent upon their sophistication, i.e. usually
consumers of high-end products and services tend to invest
more in privacy than buyers of low-end products.28

25
Characteristics and Benefits of OSNs
3 The Characteristics and Benefits of Online
Social Networks
29 boyd/Ellison2007.
30 Rohan et al. 2008.
31 McCarthy 2010.
This chapter characterizes today’s online social networks
(OSNs) and develops an interdisciplinary understanding
of them. To this end, each discipline characterizes OSNs
from its viewpoint, thus using different foci and laying
the foundations for a common understanding. We con-
clude this chapter with a shared interdisciplinary view of
OSNs by pointing out the similarities between the differ-
ent viewpoints.
Borrowing from boyd and Ellison, we define “social network
sites as web-based services that allow individuals to (1)
construct a public or semi-public profile within a bounded
system, (2) articulate a list of other users with whom they
share a connection, (3) view and traverse their list of con-
nections and those made by others within the system”,29
and (4) allow users to communicate over the Internet as
well as to share interests, media, and activities, often via
third-party applications.
3.1 Technical perspective
From a technical point of view we focus on two major para
meters that characterize OSNs: the stakeholders involved
and the various types of data, including their collection and
usage. We conclude by offering our thoughts on the func-
tion of OSNs as the new desktop.
3.1.1 OSN Stakeholders
Users
OSNs such as Facebook, Google+ and others are experi-
encing tremendous growth with millions of active users
every day. A social network user is any legal entity, i.e.,
an individual or organisation, that subscribed to the OSN
service and hence is associated with an online profile.
Passive users, in contrast, have not subscribed to the ser-
vice but may still be using (knowingly or unknowingly)
public services of the OSN.
OSN users have the ability not only to create and manage
their respective profiles, but also to create and manage
relationships with other users based on common interests,
such as entertainment, social events, or professional is-
sues. This way, users sharing similar interests or social
relationships in the physical world can build communi-
ties in the cyberworld. Social network users can browse
through their contacts’ profiles and contact lists, upload
multimedia content, post private and/or public messages,
and annotate (user-generated) content with reviews, com-
ments, and recommendations.
Social network operators
Operators provide the underlying basic services, e.g. access
to the networking site and to social plug-ins, and infrastruc-
tures, e.g. servers for storing and sharing various types of
user-related data, needed by users to interact with each
other. To make their platform attractive, most operators de-
fine Application Programming Interfaces (APIs) which third
parties can leverage to deploy additional services. Organisa-
tions and other entities can rely on those interfaces to make
their entire online platform social, thus extending their ser-
vices without having to operate their own social networks.
Indeed, traditional websites are increasingly partnering and
interfacing with social networking services to offer their visi-
tors a personalized and social Web experience. This adop-
tion of online social networks has led to enormous amounts
of sensitive personal data being entrusted to social network
operators. Furthermore, since the monetization of OSN-
entrusted data is becoming the foundation of online busi-
ness, operators typically rely on the graph API to share in-
formation about users (e.g., attributes, activities, interests,
and their relationships) with advertisers30,31application

26
Internet Privacy
32 Facebook 2013.
33 Google 2012.
34 Facebook 2011.
35 Google 2012.
developers32,33 and other third parties34,35 Section 3.3 will
explain the operators’ business models in detail.
Third parties
Third parties are individuals or organisations providing appli-
cations, services, and functionalities other than those already
provided by the social network operator. Third parties interact
with the social network without being part of it. They rely on
the APIs defined by the social network operator to develop
and deploy applications and services (e.g. games, music-
sharing, personalized advertising). To deliver attractive fea-
tures, these applications and services are typically designed
in a way that allows them to gain access to user informa-
tion (identity attributes, contact details, posts, browsing his-
tory, etc.). There are various types of third parties, including
advertising agencies, researchers eager to study similarities
between user behaviour in the cyberworld and typical be-
haviour in physical environments; government agencies that
are increasingly interested in monitoring OSNs with a view
to preventing social disorder and crime, and data aggrega-
tors who gather details about user profiles and activities from
various social networks in a single domain.
Internet Service Providers
An Internet Service Provider (ISP) is the corporate entity
that mediates between the social network platform, users,
and third parties by providing the medium through which
bit-strings, and thus information of all kinds, are passed.
ISPs thus form the physical backbone of the cyberworld. As
an intermediary between all other stakeholders, ISPs have
the potential to monitor and collect information about us-
ers’ communication and activities on the social network. In
some countries, ISPs are required by law to collect and re-
tain customer transaction data such as source, destination,
type, date, time, and duration of communication. The pe-
riod of retention in Europe is at least six months.36
3.1.2 Social Networking Data
When participating in OSNs, users disclose a variety of per-
sonal data, either deliberately or unwittingly. User-related
social networking data includes:
—— Identity data. Describes who the user is in the social
network and includes identity and profile attributes as
well as personal privacy settings.
—— Content data. All content generated and/or uploaded
by OSN users, e.g., messages, photos, videos, posts,
comments.
—— Social-graph data. Tracks which user knows which other
users to which degree and how they are linked in the
social network. They include social and trust relation-
ship details.
—— History and traffic data. Refers to what the operator
may collect about users’ interactions and activities re-
lating to their use of the OSN. They typically include the
users’ browsing histories along with other details such
as commented topics, visited profiles, location (e.g., IP
address or GPS data), frequency and duration of use of
certain services.
—— Inferred data. All data that a social network operator or
third party has inferred from collected data, therefore
creating new information by, for example, combining
the data of different users (or user groups). Such data
includes recommendations (e.g., for contacts, services,
games, music) and statistical information.
3.1.3 Data Collection and Usage
In most cases both the OSN provider and third parties fi-
nance their services by monetizing users’ data. The collection
of data can be classified into user-aware and user-non-aware
(inadvertent) data collection. Naturally, this distinction varies

27
37 Bodily human presence is exchanged for bit-streams of data generated by a materially outsourced, calculating human logos of an arithmetic,
algorithmic nature.
from user to user. Most users are aware that identity data
and content data are collected and utilised. In the case of
non-native services, i.e., services provided by third parties, us-
ers have to give their consent to let these third parties access
certain information. However, users are frequently unaware
of exactly which data is collected and whether it is perma-
nently stored or further disseminated. Most users are also not
aware that providers collect additional information about
their behaviour, surfing history, and preferences. Such data
may (transparently for the user) be collected using cookies,
the Like/+1-Button, server-side logging mechanisms, etc.
After collection, operators and third parties use the data to
generate revenue for purposes of financing (e.g., to pay infra-
structure and stock owners), as well as improving and person-
alizing their services. The data may either be used on a per
user basis for personalization, or on the basis of user groups,
employing data-mining technologies to systematically extract
useful, previously unknown information. Social search, per-
sonalized advertising and Web pages are probably the most
well-known examples of the former. Using data mining, com-
panies may detect new trends, markets, or users’ desires at
an early stage. Some technologies, such as recommendation
services, even combine the two approaches.
3.1.4 OSNs as the new desktop
Today’s OSNs are realised as web platforms providing
subscribed users the ability to connect and share informa-
tion with other users in various forms, partially replacing
communication services such as email and telephone. By
offering APIs, OSNs are highly flexible and make it easy for
third parties to integrate any kind of non-native web service
(e.g., games, email, music) into the platform. As more and
more services are integrated, OSNs may become the single
point of entry to the Internet, providing various services
through a single interface.
This development has been made possible through (1) the
dissemination and easy usability of personal computers, (2)
maturity of the Internet infrastructure (high availability, re-
liability, and performance), (3) Web standards allowing for
highly interactive cross-platform Web services (Web 2.0), and
(4) low entry barriers to Web services (no installation and
configuration). The combination of these factors has led to
high Internet usage, the emergence of OSNs, and users sub-
scribing to these social and entertaining Web services.
3.2 Social-scientific and ethical perspective
In this section, we will characterize the quality and different
forms of sociality OSNs help to develop. First, we will provide
an abstract description of the social interactions OSNs make
possible. Second, we will determine which groups make use of
OSNs for what purpose, and what kinds of social relations are
concerned. As presenting all possible uses for OSNs is down-
right impossible, we concentrate on the most prevalent ones.
3.2.1 Social interactions
The social interactions observable on OSNs can be under-
stood as the interplay of revealing and concealing between
self-determining selves. This interplay shapes both society
and individuals. Selves are only able to show who they are
and to try them-selves out in interplay with others. OSNs have
taken this interplay to a broader, digital stage. The self is no
longer restricted to the social surroundings of his/her offline
world, but is able to engage and disengage in other kinds of
interplay at the same time through the medium of the cyber-
world. Paradoxically, the cyberworld offers more options for
such interplay, while simultaneously limiting the closeness of
the encounter.37 Nevertheless, with the advent of the cyber-
world, the possibilities for revealing who one is have greatly
multiplied. OSNs are probably the most prominent example.

28
Internet Privacy
38 98% of German people under the age of 30 are online (DIVSI 2012, p. 15). While 94% of the 14- to 29-year olds make active use of OSNs,
only 76% of the 30- to 49-year olds do so (and for people 50-plus the percentage is 47%). Regarding Facebook, the OSN most heavily used,
it is used by 72% of the 14- to 29-year olds, and only 38% of the 30- to 49-year olds (BITKOM 2011, pp. 4-5). Another 2011 survey generates
the same figures for Facebook use of Internet users at the age of 12 – 19 years (72%) (JIM 2011, p. 48).
39 The fact has been empirically well-established that the major motivation for using OSNs is to cultivate relationships, which is confirmed by all
the recent studies concerning the matter. The aforementioned DIVSI-study, for example, identifies as major motivations: “stay in contact with
friends” (90%), followed by “chatting” (59%), “knowing what’s going on” (53%) and “being informed about upcoming events” (42%). The
motivation “finding new friends” ranks fifth (38%), while more specific activities, such as uploading and commenting on photos or videos, and
sharing links and the like are only pursued by about one fifth (or even less) of the interviewees (DIVSI 2012, p. 53). A similar picture emerges
from the BITKOM-study concerning OSN-usage: as far as “positive experiences” made on OSNs are concerned, cultivating friendships ranks
highest (88% of 14-29 year olds), followed by “being informed about or invited to events and meetings” (73% of 14-29 year olds; see BITKOM
2011, p. 9). Likewise, the 2011 JIM-study identifies “chatting” and “sending messages to others” as major activities on OSNs (JIM 2011, p. 49).
We can therefore conclude that OSNs are mainly used to cultivate pre-existing relationships by communicating synchronously (chat) or asyn-
chronously (sending messages, sharing information about real life events), with secondary activities (e.g. uploading photos) serving as rather
specific techniques assisting in the process of maintaining and organizing sociality.
40 Whereas the number of OSN-contacts (“friends”) an average user has is between 120 and 130, with young users usually having more, i.e. about
200 contacts (BITKOM 2011, p. 12; JIM 2011, p. 49) Facebook chief social scientist Cameron Marlow states that “an average man – one with
120 friends – generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status
messages, or wall. An average woman is slightly more sociable, responding to ten.” (Wang et al. 2011, p. 11).
41 Ellison et al. 2007.
42 boyd 2007.
43 Again, the numbers are telling: if, practically speaking, the whole youth population is online (98 %, see DIVSI 2012, p. 15), and if 94% of
those users are active on OSNs – most of them on Facebook (BITKOM 2011, pp. 4-5) – this leaves little choice for individual users if they want
to partake in the interplay of revealing and concealing between selves. We furthermore gained insights into the peer group pressure issue in
our own focus groups; ethnographic evidence is provided in Raynes-Goldie 2010.
They simultaneously enable and enhance the showing-off of
a self and facilitate pretending to be who one is through the
adoption of one mask rather than another, as the other play-
ers in the game of self-presentation only get to know this self
via the bit-streams of available data, that is, unless there is
also an opportunity for a physical encounter.
3.2.2 User groups and purposes
When it comes to the user groups using OSNs, their mo-
tives for doing so, and the forms of sociality established via
OSNs, it makes sense to start with an analytic distinction:
usage that is related to individual users’ life-world and us-
age that is observable in more formal, e.g. job-related, con-
texts. Since the former is the most prevalent, and also the
most widely discussed, this is where we begin.
Private usage
The first observation to be accounted for is that, while the
overwhelming majority of OSN users are young people,38
their major motivation is to maintain social relationships gen-
erated in the offline-world39 Using OSNs is therefore not so
much about extending, but about maintaining one’s social
network: even if many users increase the number of their vir-
tual relationships, the core network usually consists of only
seven to ten people40. Furthermore, using OSNs is associated
with accumulating three different types of social capital: (1)
“bonding social capital”, close relationships that offer all
types of support, including emotional; (2) “bridging social
capital”, the infamous “weak ties” who might provide useful
information and new perspectives; and (3) “maintained social
capital” that allows actors to keep in touch with social net-
works after physically disconnecting41 from them . Qualitative
research shows that actors make use of OSNs in order to posi-
tion themselves in their social networks. They practice “impres-
sion management”, thereby learning to act socially and to
negotiate the rules of sociality42. As users under the age of 25
report that they genuinely have no choice when it comes to
using OSNs, it is plausible to diagnose significant peer group
pressure to share the OSN experience: non-usage is associated
with the threat of being cut off from real world networks.43 In

29
44 boyd et al. 2007.
45 Mauss 1968.
46 Siri et al. 2012.
47 For two and a half hours per week, 1 in 4 employees is active on Facebook for personal purposes while being at work. The time spent non-
working amounts to 26,8 billion Euro – although we do not know if people who spend their time on Facebook now would otherwise simply be
smoking, drinking coffee, having a chat or the like. YouCom 2011, p. 2.
this sense, the processes occurring on OSNs constitute society
as much as any face-to-face interaction.
Some scholars hold that the success of OSNs indicates a shift
in the way online communities are organised: increasingly
around people, not interests44. As they are organised around
people, for OSNs to become attractive it is crucial that they
offer a range of multimedia applications (games, rankings
etc.) and communicative channels (chat, public post, private
mail). Also, it is a widely held and plausible social scientific
assumption that the exchange of gifts indeed constitutes
relationships, as it induces a mandatory kind of reciproc-
ity45. Consequently, features that allow for “sharing” content
(music, videos) can be considered particularly effective for
establishing and maintaining OSN relationships. Facebook,
for example, has a manifold of the mentioned features on of-
fer. In addition, it started out as a tool to organise geographi-
cally-bound real world communities (college populations). As
OSNs are most frequently used to organise offline relation-
ships, its success might be due – at least in the Facebook
case – to its capacity to bring offline social networks online,
using the techniques mentioned above.
Professional usage
When it comes to more formal uses, OSNs have become sim-
ilarly indispensable: having no account on a business plat-
form (such as Xing), in some areas, might create real disad-
vantages when applying for a job. The type of social capital
generated by using these platforms is mainly bridging and
maintained social capital. In case of closed OSNs that are
increasingly integrated into companies’ every-day work
practices, OSNs assist in organizing the offline-network and
the workflow by offering communication tools and features
allowing for sorting and displaying information. Another
business-related usage pattern concerns the creation of
customer ties on (thematically unspecified) OSNs. Here, the
purpose is to tie the customer to some brand, and to gain
personal information concerning the user’s likes and dis-
likes, and usage patterns in order to gain the possibility of
micro-targeting. A similar marketing purpose is to be found
in the context of political parties.46
The fact that there are many companies and parties doing
marketing on platforms such as Facebook illustrates that
life-world usage and formal usage, while being distinguish-
able analytically, empirically tend to merge more and more.
Users are targeted by companies when spending time with
their peers on OSNs; employees increasingly make personal
use of OSNs when at work.47 Thus, OSNs and their uses,
while playing an ever-increasing, integral role in constitut-
ing sociality, at the same time have the intrinsic capacity
to break down social barriers we used to take for granted.
3.3 Economic perspective
From an economic point of view, OSNs are intermediaries
connecting users and advertisers through their platform. We
focus on two parameters that need to be considered: the way
personal data is used for marketing and how the economic
efficiency of these various possibilities is measured
3.3.1 Marketing variants for personal data
The business model of any OSN is to offer free or subsidized
services in exchange for the collection of personal data.
These personal data are then marketed in three variants:
as direct advertising, as skimming consumer surplus, and
as inferences.

30
Internet Privacy
48 Future of Advertising 2011.
49 Buchmann 2012, pp. 286-293.
—— Direct advertising: OSNs are intermediaries connecting
consumers and advertisers. OSNs do not provide per-
sonal data to the advertisers. Nevertheless, economi-
cally they fulfill the need of many companies to “know
their customers” better than any other form of advertis-
ing. For dual-valued transactions OSNs play the role of
a mediator and provide a platform where advertisers
and customers meet. Different business models of OSNs
have their specific emphasis on personalized vs. untar-
geted advertising. However, personalized advertising is
the driving factor of the development from e-commerce
to social commerce.
—— Skimming consumer surplus is the tailoring of offerings
by the provider based upon an understanding of the
price a consumer is willing to pay for a given product.
Auctions and reverse pricing as well as consumer profil-
ing reduce consumer surplus.
—— Inferences are drawn from collected data about be-
haviour and usage patterns. The correlations with
other events constitute a new source of income result-
ing in added value for the provider. This is due to the
revelation of implicit preferences inferred from available
consumer data.
3.3.2 Measures of economic effectiveness
These sources of income are not mutually exclusive and de-
pend upon the analytic capabilities of the OSN. Analytics
are applied to increase effectiveness with regard to ad im-
pressions, brand awareness, and conversion rates. In terms
of accuracy and coverage OSNs are more attractive to ad-
vertisers than classical methods of information collection
and provision like market research, print, and other offline
media. Effectiveness is usually measured in cost-per-click
(CPC), cost-per-action (CPA), and cost-per-order (CPO). Only
clicked ad impressions (CPC), downloaded files (CPA), and
sold products (CPO), count as advertising success for which
advertisers have to pay. In contrast to reachability-oriented
revenue models such as thousand-ad-impressions (TPI),
where prizes are calculated according to the amount of
money required to attract the attention of thousand visi-
tors, performance-oriented models are more effective for
targeting. A recent study by Microsoft, United Internet, and
Yahoo shows that performance-oriented online advertise-
ment outperforms reachability-oriented TV ads.48
In summary, OSNs connect consumers and advertisers (two
values). In line with value 1 data is collected and aggregat-
ed. Based upon this data, business analytics generate value
2. User preferences are inferred from profiles, contacts, click-
ing behaviour, etc., and used for direct targeting. Associ-
ated pricing models enable the three variants: CPC; CPA;
and CPO, according to which personal data are marketed.
3.4 Legal perspective
From a legal perspective it is not possible to describe online
social networks by way of one law which regulates OSNs or
establishes some kind of framework for them. Nonetheless,
OSNs are not a legal vacuum where everyone can do as
they please without consequences. There exist illegal OSN
practices which are governed on a national or local level.
The legal evaluation of OSNs is influenced by fundamen-
tal rights as well as other regulations. Fundamental rights
include the protection of personal data in Art. 8 CFREU
(Charter of Fundamental Rights of the European Union),
the right to privacy in Art. 8 ECHR (European Convention
on Human Rights) and various basic rights provided by the
German Constitution (“Grundgesetz”), among them the
right to informational self-determination and other person-
ality rights (Art. 2.1, 1.1 GG).49 But there is a wide variety
of other regulations as well. The following chapter will pro-
vide an overview of relevant regulations applicable when

31
50 EU Directive 95/46/EC L 281, p. 31-50.
51 EU Directive 2002/58/EC L 201, p. 37-47.
52 Spindler/Schuster 2011.
53 Spindler/Schuster 2011.
dealingwith OSNs, starting with the data protection law
as the most significant one, and following with intellectual
property, criminal, and copyright law, equality of treatment,
and regulations concerning the protection of minors.
3.4.1 Data Protection Law
Data Protection Directive
Data protection law in Europe is mainly specified by the
Data Protection Directive 95/46/EC (DPD)50 and the Direc-
tive on Privacy and Electronic Communications 2002/58/
EC (ECD).51However, the Directives generally only bind the
national legislator and need to be implemented into na-
tional law. The following section will discuss the principles
and requirements of the European directives and particu-
larities of German regulations.
When processing personal data of their users, OSNs are
considered “controllers” as defined in Art. 2 lit. d) DPD and
thus responsible for the lawful processing of that personal
information. Thus they must comply with the provisions and
regulations of the national laws which are based on the
European Directives.
According to the principle of purpose (Art. 6.1 lit. b) DPD)
personal data can only be processed for the purpose it was
originally collected. The principle of necessity (Art. 6.1 lit. c)
and e) DPD) requires the collection, processing, and usage of
personal data to be limited to the purpose for which it was
collected. Personal data may be processed if the data subject
gives her consent, or if it is necessary for the performance of
a contract or legal obligation, or for the realisation of another
legitimate interest pursued by the controller (Art. 7 DPD).
Data subjects have the right to information whether the
data was obtained directly from the data subject or not
(Art. 10, 11 DPD). In either case, the data subject has a
right of access to the data which includes the confirmation
whether or not data has been collected, and the rectifica-
tion, erasure or blockage of data if it does not comply with
the Directive and notification to third parties (Art. 12 DPD).
The above-mentioned principles are implemented into
German law, namely into the Federal Data Protection Act
(Bundesdatenschutzgesetz, BDSG) and the Telemedia Act
(Telemediengesetz, TMG). Two fundamental principles of
German data protection law do not have any European
equivalent, however. Those are the principle of direct gath-
ering and the principle of data avoidance and minimisa-
tion. The first principle requires the personal data to be
gathered from the data subject herself (§ 4.2.1 BDSG), so
that the data subject is always aware of the personal data
that is collected from her. The principle of data avoidance
and minimisation (§ 3a.1 BDSG) requires the collection,
processing and usage of personal data to be as low as pos-
sible. It also addresses technical considerations, because it
requires the data processing systems to collect as little per-
sonal data as possible.
Categories of data
European legislation does not distinguish between differ-
ent categories of data. However, the German law distin-
guishes fundamentally between account and usage data.
Each category then follows its own processing rules. Since
OSNs are telemedia service providers as laid down in § 2.1
No. 1 TMG the data categories fall under the Telemedia Act
(Telemediengesetz – TMG) Following §§ 11 et seqq. TMG,
account data (e.g. all registration data such as name or ad-
dress) may be processed as far as this is necessary for the
performance of the contract.52 Usage data (e.g. user name,
IP address, time and volume of use, cookies, identification
or transaction numbers) may be processed as far as neces-
sary for allocation or billing of the service.53

32
Internet Privacy
54 Simitis 2011.
55 Nolte 2011, p. 236, p. 239; Moos 2011; Moos 2012, p. 151; Hoeren 2011; Jotzo 2009, p. 232.
56 Draft for a Data Protection Regulation 2012.
57 See Europe versus Facebook 2012.
58 Jandt/Roßnagel 2011, pp.160 -162.
All user-generated content cannot be categorized as ac-
count or usage data because they are not necessary for
the performance of the contract. User-generated content is
known is “content data”, e.g. posts and comments on per-
sonal profiles, status updates, uploaded pictures, or videos.
The processing of content data falls under the general rules
of §§ 28 et seqq. BDSG. Following § 29 BDSG54, content
data may be processed for the purpose of advertising, in
particular if there is no reason to believe that the data sub-
ject has a legitimate interest in ruling out the possibility of
collection, recording, or alteration (No. 1) or if the data can
be acquired from generally accessible sources (No. 2).
Further legal problems
The major problems that arise when dealing with OSNs from
a legal perspective are: to what extent EU and the respective
national data protection law is applicable to OSN operators,
how to better enforce data protection law, and the exclusion
of data collection for personal and family purposes from data
protection law. They will be addressed in the next sections.
According to Art. 4 DPD and subsequently § 1.5 BDSG Ger-
man data protection law applies if data is processed within
Germany, regardless of the fact that the operator may be
registered outside the EU (e.g., the major OSNs Facebook
and Google+). However, it is argued under which condi-
tions and circumstances data processing can be considered
to have taken place in a specific country – especially when
the server storing all data is physically located outside that
country. Therefore the scholarly dispute about in which cas-
es German data protection law is applicable for OSNs from
outside the EU is still unresolved.55
Since OSNs process personal data transnationally, the dif-
ferent national laws make it hard for providers and users
to know which data protection regulations need to be
observed in which specific context. Even though legal unifi-
cation progresses in limited dimensions56, a worldwide data
protection law is not in sight. Therefore, other standards
of data protection need to be found. Even if EU law is ap-
plicable in a certain case, it remains difficult for users to
protect and enforce their rights against network operators,
especially if the company is situated outside Germany or
the EU. The right to delete one’s data cannot actually be
enforced for most users on OSNs. Even if users were easily
able to find out under which jurisdiction their personal data
was being processed, when an OSN provider does not com-
ply with their wish for deletion, or if the users want to verify
deletion, etc., they will often have to enforce their rights in
foreign jurisdictions. Even if some few people are willing to
go to such lengths57 many people would be unable to do so
without professional legal counsel.
OSNs are often used by private persons for widely person-
al reasons. Therefore, vast amounts of personal data are
uploaded by OSN users every day. It needs to be discussed
who bears the responsibility for the lawful processing of
that personal data. This problem arises because accord-
ing to Art. 3.2 DPD data processing does not fall under
data protection law if it is processed mainly for personal
or family reasons. In order to establish effective protection
of personal data under data protection law, as much data
as possible should be defined under the DPD and respec-
tive national law. For lack of an explicit legal regulation,
it must be carefully evaluated if the data processing is
for personal usage or not. One way to prove that usage
goes beyond personal or family reasons can be the pur-
pose of processing, e.g. to establish professional or com-
mercial contacts or if the user pursues political or chari-
table motives (e.g. Facebook’s Fanpages).58 Another clear
indication against personal usage is if the data is publicly
accessible, e.g. via search engines or if the information is

33
59 Jandt/Roßnagel 2011, pp. 160 -165.
60 Jandt/Roßnagel 2011, pp. 160 -164; Spindler 2012, F 81.
61 There is no European legislation concerning criminal law because the EU does not have legislative power in that area of law.
62 For a detailed overview see Kartal-Aydemir/Krieg 2012, pp. 647-652.
65 Other countries have similar anti-discrimination laws, some of them banning the disclosure of personal information in an application.
not restricted to closed OSN groups.59 For third parties’
personal data that is uploaded by a user, both the OSN
provider and the user share responsibility for the lawful
processing of that data. Basically, the user is responsible
for her generated content. If the third party demands
protection, e.g. by deleting her data, the provider has to
weigh the user’s interests in presenting her personality
and social environment against the third party’s interest
in informational self-determination.60
3.4.2 Existing regulations independent of ICT
Apart from the regulations concerning data protection and
data processing within social networks there are also regu-
lations which are independent of specific communication
technologies but are nonetheless applicable in an OSN con-
text. They will be discussed in the following section. These
regulations are intended to protect the individual’s honor
and dignity or to protect privacy by either reducing possi-
bilities of using public information or distributing it without
consent. In some areas of law there is a wide variety of Euro
pean legislation, whereas other areas are regulated on a
solely national level. International and European legislation
will be discussed as necessary.
German criminal law provides regulations in §§ 185 et
seqq. StGB (Strafgesetzbuch – German Criminal Code)61
which prohibit defamatory or false statements about a per-
son. That includes statements regarding the individual re-
ferred to and statements about third parties. This applies to
the OSN context as well, hence defamatory and false state-
ments on one’s own or any other profile about a person
(“cyber-bullying”) are prohibited by law, can be prosecuted,
depending on complaint, and will be subject to penalties.
Furthermore, illegally impairing someone’s personality
rights or right to informational self-determinationgives the
affected person possible claim for injunctive relief against
the service provider or the specific user (§§ 1004.1, 823
BGB).62 Defamatory statements on OSN profiles can impair
someone’s personality rights, and the right to informational
self-determination can be compromised by using someone
else’s personal data without authorization or permission,
e.g. creating a fake profile with someone else’s name, pic-
ture, or other personal information without their consent.
A lot of personal information about a person can be found
online, often because it was made public on an OSN. In-
formation as sensitive as religious or sexual orientation is
available, not to mention profile pictures which can give
information about gender and race. Depending on the
individual privacy settings, that information may even be
accessed by third parties. When an applicant applies for
a job, the decision-maker (e.g. human resources) might
use that kind of information to find out more about the
person than is written on the resumé. A range of Euro-
pean Directives address the equal treatment of men and
women, including the Employment Equality Framework Di-
rective 2000/78/EC63 and the Equal Treatment Directives
2006/54/EC64. These directives are implemented into the
German General Equal Treatment Act (Allgemeines Gleich-
behandlungsgesetz, AGG), which prohibits employers from
denying candidates (or terminating them) because of cer-
tain characteristics or features. These include race, gender,
religion, disability, age, and sexual orientation (§ 1 AGG).65
Hence, an employer is not allowed to use that information
to deny a candidate a job position or to terminate the con-
tract. He will be liable for any damages in case of violation

34
Internet Privacy
67 The German Copyright Act guarantees and enforces rights of creative works in literature, science and art (§ 1 UrhG (Urheberrechtsgesetz,
Copyright Act)) similar to the Multimedia Directive. The originator of a work has the exclusive right to distribute, reproduce his or her piece of
work or make it publicly accessible (§§ 15 et seqq. UrhG).
68 Sievers 2012, p. 229.
69 Sievers 2012, p. 229, p. 231.
70 Jandt/Roßnagel 2011, p. 637, p. 641.
(§ 15 AGG). So theoretically, even if a user provides informa-
tion on her profile she should not need to worry that it has
negative influence on her work life. Of course, in real life
that is hard to imagine and even harder to verify.
The right to personal image is a basic right and protects
against secret or forced photography or recordings of any
kind, and their distribution. German law provides a protec-
tion of personal images in §§ 22 et seqq. Kunsturheber-
rechtsgesetz (KUG, Copyright Act for Works of Art). To dis-
tribute it to the public the person portrayed needs to give
her consent (§ 22 KUG). The consent is dispensable in only
a very few cases, e.g., with regard to pictures portraying
an aspect of contemporary history or when the picture was
taken at public events the person attended (§ 23 KUG).
On OSNs, pictures of people are uploaded either on one’s
own profile or another user’s profile millions of times, often
without regard for the user’s consent. The portrayed person
has a right to be asked beforehand or to have the picture
removed.
Intellectual property law is also applicable to OSNs. The
Multimedia Directive 2001/29/EC66 guarantees and en-
forces reproduction and distribution rights for creative
works of any kind, including computer programs, perfor-
mances, broadcasts, films, and music (Art. 1-4 Multimedia
Directive). The directive is implemented into the German
Copyright Act.67 Within a social network there are two main
ways of sharing pieces of work such as texts, photos, videos,
or songs.68 One is uploading a copyright work, the other
one is social sharing or embedding content in a user profile.
The legal evaluation is not yet consistent. It can be pre-
sumed, however, that at least uploading copyrighted works
is a breach of the Copyright Act, unless the originator con-
sented, e.g. by implementing a share-function (e.g. “Like”- or
“+1”-button) himself.69
Regulations concerning the protection of children and ado-
lescents can neither be found in European law acts nor in
specific national data protection acts, but rather in the In-
terstate Treaty on the Protection of Minors (Jugendmedien-
schutz-Staatsvertrag – JMStV). Its goal is to protect minors
and adolescents from content in electronic information and
communication medias which impairs or harms their deve
lopment and education or violates human dignity or other
legal goods protected under the German Criminal Code
(§ 1 JMStV). Specific data protection laws are not included
in the goals of that treaty.70
Furthermore, minors are restricted by law when it comes
to consenting to a contract. The German Civil Code pro-
vides regulations that a minor under the age of 7 cannot
consent to a contract at all (§ 104.1 Bürgerliches Gesetz-
buch – BGB), and between the ages of 7 and 17 only when
the contract has no legal (not economical) disadvantages
(§ 107 BGB). The consent to a contract with the OSN pro-
vider usually includes accepting their terms and conditions
which regularly involve regulations at the expense of the
consumer (which would be the minor in this case). That
is accepted as a legal disadvantage.71 Also, the contract
would allow the processing of personal data by the OSN
provider which has negative effects on the minor’s right
to informational self-determination.72 Therefore, a contract
with a minor would not be binding without the parent’s
consent, and the processing of the minor’s personal data
would be unlawful.

35
73 Buchmann 2012.
3.4.3 Conclusion
There is a wide variety of different legal regulations protect-
ing all kinds of legal goods. There is not a single law which
is applicable to OSNs, but all kinds of different laws which,
put together, provide a fair, though imperfect basis for the
legal evaluation of OSNs.
3.5 Summary: An Interdisciplinary view of
OSNs
We conclude by summarizing and integrating the viewpoints
of the different disciplines in order to provide an interdisci-
plinary view of OSNs which will serve as a basis for the rest
of this document. This summary will stress the most impor-
tant facts from the viewpoints of the different disciplines.
Firstly and most importantly, users leverage OSNs for social
interactions by revealing and concealing themselves in an
interplay with other selves. Paradoxically, OSNs bring this
interplay to a broader, digital stage while at the same time
limiting the closeness of the encounter. OSNs are mainly
used to maintain social relationships generated in the
offline-world and hence they are increasingly organised
around people rather than interests. For some user groups
(e.g. youth), using OSNs is mandatory to keep up with their
social networks; thus OSNs assist in generating sociality in a
very serious sense. The integration of a broad range of com-
munication tools and multimedia applications make OSNs
even more attractive for users, mostly because they provide
means to share information as well digital data items; as
sharing is to be understood as a key mechanism for gen-
erating and maintaining sociality the features that make
sharing possible help to strengthen social bonds via OSNs.
Hence, the usage of OSNs boils down to sharing information
between self-determining selves; and all this information is
mediated through OSN operators which in turn usually offer
the corresponding services for free. To be able to offer these
services for free while at the same time generating some
revenue, OSN operators market the information provided by
users. To this end, OSN operators do not only act as inter-
mediary between OSN users, but also as an intermediary
between customers (which usually correspond to OSN users)
and advertisers (usually companies). By means of smart data
collection and data usage (e.g. data inferences), advertising
in OSNs is more effective than traditional types of market-
ing. Another aspect of OSNs is that they are telemedia ser-
vices and thus their providers need to comply with the Ger-
man data protection specifications in §§ 11 ff. TMG and the
BDSG if they are seated in Germany or if they are seated out-
side the EU but process personal data in Germany. Because
of the internationality of OSNs it is especially challenging
to enforce data protection regulations with OSNs. Also, it is
not easy for users to find out under which jurisdiction their
personal information is being processed.
3.6 The Benefits of Online Social Networks
In this chapter, we discuss how online social networks (as
characterized in Chapter 3) might contribute to realizing the
core values (as defined in Chapter 2). We outline characteris-
tics which should be retained and fostered when proposing
options for modifying sociotechnical practices of OSN usage.
We begin by specifying OSNs’ capacity to help actors in ac-
complishing self-determination (4.1). Subsequently, we illus-
trate OSNs’ potential to foster democratic participation (4.2),
followed by a discussion of how economic well-being stands
to benefit from OSN features (4.3). In the concluding section,
we will present a short summary (4.4).
Before elaborating on these issues, we add one more “techni-
cal” remark. Throughout the chapter we draw from our own
research73 as well as from relevant research literature. The
latter includes quantitative as well as qualitative research.
The more abstract and general assertions we present are
derived from the body of literature referring to research on

36
Internet Privacy
74 Wang et al. 2011.
75 While Benkel notes that there are really novel ways of constructing one’s personality, his essay on “visualization strategies” on Facebook is
characterized by a remarkable ambivalence concerning the status of OSN social processes. He notes that visualization of Facebook is not about
showing one’s empirical personal character (“wie man ist”), but about presenting someone the user would like to be (“wie man sein kann
und will”). Referring to self-determination as a constant, never-ending process of creating a self, from our point of view Benkel’s distinction is
misleading. OSNs provide for novel ways of creating a self, it is however, unfruitful to specify OSNs features against the background of some
illusory, pure and unmediated human social reality, for the social is generally impure, mediated, in short: socio-technical. Benkel 2012.
OSNs conducted in Western environments (Germany and
the US). We also draw on an anthropological study of Face-
book usage accomplished in a non-Western setting, namely
in Trinidad. Trinidad is a Caribbean island located a couple
of kilometres off the Venezuelan shore. The reasons for tak-
ing this research into account are threefold: first, in this lit-
erature we find in-depth (“thick”) ethnographic descriptions
of the actual practices that people develop on OSNs; those
descriptions allow us to illustrate some of the more abstract
arguments that we put forward. Secondly, the fact that
those examples come from research within a non-Western
setting allows us to conclude that the potential benefits of
OSNs specified by us are cross-culturally valid and therefore
genuinely linked with the horizon of possible uses of OSNs
- not only to a specific sociocultural setting (such as “the
West”, e.g. Germany). Thirdly, as we deal with the potential
of OSNs in this section, turning the lens to a non-Western
setting might make potential benefits visible that are not
realized by users in a German or US context, but that are
nevertheless worth preserving. We would ultimately like to
stress that the case of Trinidad only serves as a proxy here.
The study we draw upon is simply the best and most up-
to-date anthropological research on OSN usage in a non-
Western setting that we could access. It is well-suited for
enriching our account of OSN’s capacities for realizing the
core values as they were specified in Chapter 2.
3.6.1 The Benefits of OSNs for Free
Self-Determination
Opportunities for interaction
While in several respects interaction – the interplay of
the self with other selves – lays the foundation for free
self-determination, OSNs multiply the opportunities for such
interactions. The average number of “virtual friendships” on
Facebook, for example, is 13074. Of course, these “friend-
ships” are not to be understood in the conventional sense
of the word as other selves with whom an actor has a close
relationship; rather, they are potential interaction channels
that can be actualised easily, and that allow for interact-
ing with an extended circle of acquaintances. In particular,
these channels might lower the threshold for communica-
tion considerably, as they remove physical boundaries, ex-
tend the scope of communications geographically in an
almost unlimited way, and heighten the probability of com-
municating with people with whom one has only the weak-
est of ties. There is no need to address someone directly, as
the audience to be addressed is composed of several recipi-
ents and therefore rather diffuse. In this sense, posting a
message can be easier than sending an email. Last but not
least, there is a range of different channels (private mail,
post, chat), allowing the user to choose the actual mode
of communication (synchronous, asynchronous, one-to-one,
one-to-many). Thus, OSNs multiply the opportunities for in-
terplay with other selves in a quantitative way.
Identity formation
OSNs also modify the quality of the modes of self-determi-
nation. Whereas the interplay with other selves enables an
actor to develop his or her (multiple) identities, there is a
manifold of existential options originating from the OSN
world, which can be integrated into the process of build-
ing one’s self. It is important to note that these options
are different from those existing in the offline-world.75 For
example, on OSNs an actor has a manifold of features at
his/her disposal for expressing likes and dislikes, and for
self-definition by sharing a range of media, such as pictures,

37
76 boyd 2007.
77 Miller 2012.
78 Goffman 1973.
79 Miller 2012, pp. 88–103.
80 boyd 2007, p. 19.
movies, music and so on. As boyd has shown, young users
draw most frequently on these resources for defining their
personality.76
Social inclusion
With OSNs comes an increased pool of resources that con-
tain features which are attractive for actors who dwell at
the edge of the social periphery. Anthropologist Daniel
Millerreports how a shy and rather marginalized Trinidad-
ian makes use of Facebook’s online game “Farmville” for
establishing a self in relation to his group of colleagues.77
Playing the game incites communication between the play-
er and his colleagues in the offline world as well, for via
the game the players share a common interest. In this way,
OSNs have the potential to include the excluded. This as-
pect relates to the opportunities for self-expression created
by OSNs, and thus for sharing one’s worldview, for express-
ing political, religious, sexual preferences, and so on. An
actor might share his or her convictions with like-minded ac-
tors, gaining support, thus strengthening one’s worldview.
Impression management
Another integral element of self-determination is the tech-
nique of “impression management.” The latter concept was
developed by Erving Goffman78 and refers to the everyday
activity of drawing a picture of one’s self vis-à-vis the so-
cial network one is, or would like to be, part of. Playing
a role in the social network pre-supposes learning how to
play while learning to play a role is in turn tied to learn-
ing what information to give away and what information
to hide – the play of concealment and disclosure. Actors
can use OSNs for impression management. Given that con-
cealment/disclosure is one of the key social skills needed
to develop one’s personality, OSNs serve as a playground,
a social space for learning this kind of skill. On OSNs it is
easier to wear and test various selves, for the masks one
might possibly wear are less defined by physical, e.g., bodily
or psychological restrictions.
Overcoming real-life boundaries
In this context, we may once again refer to the anthropo-
logical example of a shy guy playing “Farmville” that was
cited above; another case Miller presents is a sociable for-
mer human rights attorney who, due to a disease and the
handicaps that come with it, has few chances to socialize in
the offline world. However, via Facebook he maintains ex-
isting relationships and even creates new ones with people
living abroad.79 The example demonstrates that there is a
certain freedom within OSNs from some of the offline world
restrictions. In this respect, boyd too, when presenting eth-
nographic research accomplished in a US context, high-
lights the fact that the opportunities for youth in everyday
life to indulge in the task of self-determination are severely
restricted by all kinds of authorities (she mentions parents,
teachers, and government officials;80 we might add col-
leagues, bosses, police etc.). OSNs provide a space that, to
a certain degree, can be free from the confines established
by those authorities.
Entrepreneurial opportunities
The last thing we would like to account for in respect to
the core value of self-determination turns the lens from the
users to the providers of OSNs. Quite a few of the early
OSNs owe their existence to more or less visionary ideas
developed by Web 2.0 entrepreneurs. Establishing an OSN
platform requires technical skills as well as the capacity to
translate the technical network into a sustainable business
model. In Germany, Art. 12.1 GG grants actors the right to
choose a profession and establish an enterprise. Thus, if be-
ing an OSN entrepreneur is part of one’s self-definition, the
opportunity to establish an OSN and gain money from it is
firmly tied to the core value of self-determination. For this

38
Internet Privacy
81 boyd 2007, p. 8.
82 boyd 2007, pp. 8-9.
83 boyd 2007, p. 8.
84 boyd 2007, p 18.
85 Ellison et al. 2007, pp. 1143–1168.
reason, the socio-technical, socio-legal, and socio-economic
environments should preserve opportunities for entrepre-
neurs to create and maintain OSNs.
3.6.2 The Benefits of OSNs for Democratic
Participation
Establishment of networked publics
As was stated in chapter 2, public self-expression and the
opportunity to participate in social occurrences is a precon-
dition for democratic participation. As OSNs can be used to
participate in social networks, that is, to partake and also
benefit from those networks, they have the capacity to con-
tribute to democratic participation.
OSNs might be understood as “networked publics”, or as
“one type of mediated public. The network mediates the
interactions between members of the public.”81Establishing
audiences and sub-audiences in OSNs creates networked
publics. While having one’s say and paying attention to
what somebody says in these publics fosters democratic
participation, the networked publics of OSNs are different
from those of the physical world insofar as OSN publics are
characterized by persistence (the information fed into an
OSN does not disappear after it is expressed), replicabil-
ity (one can copy information as many times as one likes),
invisible audiences (the audience is invisible insofar as it
is not necessarily present at the event, i.e. because of the
persistence of the information, there may be a future audi-
ence, unknown at present, to be taken into account) and
searchability (it is detectable using search engines).82
Audience selection
At first glance, the number of ways to choose one’s audi-
ence is significantly increased in OSN publics. As it becomes
possibleto easily address numerous actors, using OSNs
augments participation considerably. OSNs overcome some
of the limits of physical public space. In this sense, in “un-
mediated environments, the boundaries and audiences of a
given public are structurally defined“;83 in OSNs, however, it
is generally possible to shape the structure of the public to
be addressed by dividing one’s network into sub-groups. In
principle, this also increases the individual’s capacity to be
freed from structural limitations and overly restrictive social
rules, that is, to communicate without being observed by so-
cial authorities of various kinds (here, again, referring to par-
ents, teachers, colleagues, employers, policemen etc.84). The
perfection of OSNs then, is that the public aspect of OSNs is
both free from physical and social structural limitations, and
adds granularity to the individual choice of the audience to
be addressed when expressing one’s view. Hence, OSNs can
be means for fostering democratic participation.
Accumulation of social capital
OSNs have the potential to foster democratic participation
in yet another way. In one sense, democratic participation
is about partaking and benefiting from social networks (or
from “society”, in more traditional language). This is why
we must note OSNs’ capacity to generate bonding, bridg-
ing, and maintained social capital (see Chapter 3). Social
scientific research has shown quite plainly that using OSNs,
especially by supporting the building and management of
weak ties, increases subjective (or psychological) well-being
(Ellison/Steinfeld/Lampe 2007)85. In this sense, OSN users
do indeed benefit individually from interactions and mem-
berships in OSNs. Thus, as OSNs bring about opportunities
to take part in and also to benefit from social formations, we
can state that they foster democratic participation. Of course,
the term “democratic” might be understood in a more strict
sense, thus introducing further conditions to be fulfilled
by OSN interactions in order to be consistently defined as

39
86 boyd 2007, p. 21.
87 Mauss 1968.
88 Miller 2012, pp. 98-99.
89 Meyer 2005.
90 Schreiber 2009.
91 Dreier 2006.
92 Kloepfer 2005.
93 Jarass 2007.
fostering “democratic participation.” As we have seen above,
in a broad sense “democratic” refers to actors’ opportunities
to negotiate and have knowledge of the rules of the social
game to be played. In fact, on OSNs actors can learn to ap-
ply these rules as well as partake in their negotiation: Online
social networks constitute social arenas for developing skills
in establishing, applying and negotiating norms that are
valid in their peer group.86 Moreover, as was noted in chapter
3, influential classic social theory holds that gift economies
serve the function of establishing social relationships (Mauss
1968)87. Sticking to this presumption, we may understand
the multiple options to share content in OSNs (videos, mu-
sic, and pictures) as a formidable way for establishing and
strengthening social bonds. For example, Miller reports how
the Trinidadian attorney mentioned above decisively deep-
ens his relationships to London-based expats by exchanging
classic Trinidadian music MP3s and the like.88 So, having vari-
ous options for sharing allows members to partake and to
benefit from social networks; in this sense, providing features
for sharing content is yet another way OSNs may contribute
to democratic participation.
Formation and expression of political will
While democratic participation is about politics, the latter
might also be understood in the more narrow sense of form-
ing the explicit political will of the polity: the sovereignty of
the people culminating in the opportunity of each citizen
to freely choose his or her representatives (in representa-
tive democracies) during the course of elections, especially
parliamentary elections.89 Participation in elections is, of
course, not directly influenced by political information re-
vealed in OSNs. Users might reveal whom they are planning
to vote for or whom they have voted for in the past. Still,
since election content is kept secret, nobody will be able to
determine the validity of such a statement. Thus, even if us-
ers are discredited for the revealed election behaviour, this
will not likely coerce them into making specific decisions
when voting in future elections.90
As was established above, free choice and free decision mak-
ing in elections presupposes, that each citizen has the right
to form an opinion on an issue. Therefore, another very impor-
tant sphere of democratic participation, which subsequently
culminates in elections,91 is the free public formation of
opinion.92 The right to partake or not in this social exchange
actively or passively is protected by the Freedom of Opinion
and the Freedom of Information clauses in Art. 5.1 GG and
the Freedom of Demonstration clause in Art. 8.1 GG. Indeed,
to form an opinion, citizens must have the means to gain
information and to exchange opinions in political discourse.
Freedom to express political opinion and to gain information,
which are viewed as highly important for the democratic pro-
cess,93 are supported by OSNs, for OSNs have a manifold of
features on offer that allow for political discourse to flourish.
As OSNs help to establish publics, they support public dis-
course and enable each citizen to learn about the variety of
opinions concerning an issue. More specifically, they make it
possible for anybody to have one’s say as well as to pay atten-
tion to what somebody says. In this sense, OSNs have the po-
tential to guarantee freedom of speech and to stage dispute
and contestation through public discourse. Citizens gain the
opportunity to express political views and party affiliations
and to influence numerous people. It is thus possible to be
informed about other people’s political views and affiliations
to parties or enterprises and consequently easier to evaluate,
if one in fact wants to follow a particular person’s political

40
Internet Privacy
94 In the case of Stuttgart 21, both supporters as well as adversaries created Facebook accounts in order to gain support. (FÜR Stuttgart 21 2012);
(KEIN Stuttgart 21 2012).
95 For example, there is a blog of Northern Frankfurt residents who are adversaries of the Rhein-Main Airport extensions (Fluglärm Mainz 2012)
while residents of Mainz have opted for a Facebook account (Frankfurt Nord 2012).
96 While there is controversy concerning the weight of OSNs and other social media, there is only little doubt that these technologies did play
some role in the Arabian upheavals. For a perspective highlighting their role see Hirschkind 2011. A more cautious view is presented in
Deutschland Funk 2011.
97 Jarras 2007.
98 Deloitte 2012.
lead or even vote for that person in an election. The bottom
line is that the opportunities for expressing one’s opinion and
gaining information improve. In this way, democratic partici-
pation is improved as well, since the decision process is en-
riched with relevant information.
The recent past has shown that it is not only some represent-
ative space, such as the parliament, or some distinguished
public sphere where political issues are articulated. In the
case of the controversy surrounding the re-construction of
Stuttgart’s main station (Stuttgart 21)94, the extension of
Frankfurt’s Rhein-Main Airport95, and the upheaval in several
Arabian countries (termed “Arabellion”)96, OSNs have demon-
strated their potential to serve the purpose of self-organizing
people around issues, that is, of organizing rallies, protests
and even supporting regime change from a grassroots level.
Rallies and demonstrations can be understood as public pro-
cess of opinion formation. The right to demonstrate without
interference by governmental or other authorities in public
areas is laid down in Art. 8.1 GG. Granting this right is viewed
as especially important for the democratic process.97 As OSNs
can be quite effective avenues for organizing such events,
including the flow of people and information required for this
kind of self-organisation, the integrating effect of demonstra-
tions can be improved by OSNs.
3.6.3 The Benefits of OSNs for Economic
Well-Being
Employment and generation of profits and tax revenue
Triggered by increased connectivity and reduction of search
and distribution costs, the Internet economy changes the
terms of trade. As consequence and extension of e-commerce,
OSNs involve all stakeholders in the process of value creation.
While e-commerce offers products in a client-server scenario,
the key success factor of OSNs is cooperation with regard to
economic impact. According to a recent study, Facebook con-
tributes significantly to economic welfare in Europe. An eco-
nomic impact of €15.3 billion and the support of 232,000
jobs across 27 European countries and Switzerland were es-
timated for the year 2011.98 Welfare distribution is possible
from increased employment wages, taxes paid, and profits
generated by both Facebook itself (direct effects) and the
companies using Facebook (indirect and induced effects). Di-
rect effects are owed to the fact that OSNs are business mod-
els themselves. They generate profits, pay taxes, and employ
people. Indirect effects come about when clients of OSNs use
the service infrastructure for the more efficient promotion of
their own products and services. Some of them contribute
to the growth of app communities, e.g. providers of online
games and other economically relevant applications. In this
role OSNs are platform providers for supply-chain industries.
The indirect effects of OSNs originate from third parties
building their business models on the most adequate OSN
platform. Induced effects reinforce direct and indirect effects
of OSNs and their suppliers, e.g. the more companies par-
ticipate on the platform the more attractive is the OSN and
its third-party applications (network effects). For some busi-
nesses, OSNs also provide an infrastructure to offer their own
services, e.g. shopping apps. Indirect effects within the in-
duced effects stimulate sales of infrastructure providers and
hardware suppliers, e.g., smartphones and broadband con-
nections. In addition to the benefits gained by individual us-
ers, companies generate new sales by advertising their prod-
ucts and services through the social network. OSNs provide

41
99 Müller et al. 2003, p. 302-304.
100 O’Reilly 2005.
101 For example, networked publics can be organised around a common political goal, that all the public’s participants pursue (resistance against
the Rhein-Main Airport’s extension or the like); or they can be organised around people themselves, as in the case of managing peer groups
via OSNs. See also boyd et al. 2007.
102 Miller 2012, pp. 88-103.
platforms to promote and advertise products, services and to
increase brand awareness. In an economic transaction they
are intermediaries.
As intermediaries, OSNs decrease the cost of performing eco-
nomic transactions. Cost reductions are related to three ef-
fects that have been studied in the context of e-commerce.99
For e-commerce - and even more for OSNs - specialization
enforces the concentration on core competencies. Specializa-
tion is a characteristic of any economic development since
the advent of the industrial revolution, and is even more cru-
cial for e-commerce. Secondly, specialization increases costs
of coordination. However, as intermediaries between market
participants, OSNs reduce coordination costs. Thirdly, cost
reduction in coordination requires sophisticated cooperation
technologies. In recent times, “wisdom of the crowds” has
become a major driver for the reduction of transaction costs.
O’Reilly’s seven principles describe the intelligent Web, based
upon cooperation through collective intelligence.100
3.6.4 Summary: The Benefits of Online Social
Networks
We conclude that there are various benefits OSNs have to
offer when it comes to strengthening the core values. In
some cases, the benefits brought about by OSNs’ features
concern even more than one core value. For example, while
OSNs’ networked publics can be organised around people or
around issues,101 organizing people around issues may cre-
ate close relationships,102 thus simultaneously supporting
self-determination and democratic participation. Similarly,
creating an environment that allows entrepreneurs to es-
tablish an OSN business might contribute to economic well-
being as well as to self-determination. For a variety of rea-
sons, then, the features safeguarding the benefits of OSNs
are worth being maintained and fostered. Simultaneously,
some of these features may have considerable drawbacks,
which will be explored in Chapter 5.

43
Characterization of E-Commerce
4 Characterization of E-Commerce
103 Müller et al. 2003.
104 Laudon/Traver 2007.
105 Brynjolfsson 2009.
4.1 E-Commerce from an Economic and
Technical Perspective
Electronic commerce (e-commerce) is identical to tradition-
al commerce, except the market is virtual and operated
by technical information systems, i.e. e-commerce is also
called virtual market. In these markets, sellers and buyers
meet under pre-specified conditions. These conditions are
the topic of an innovative economic research area called
“market design”, and this defines and limits the flexibility
of the relative position of market participants most often
by using price as a parameter.Since e-commerce accounts
for almost 30% of German trade, trust in the infrastruc-
ture and in the relationship of sellers to buyers will decide
the future contribution of e-commerce to economic well-
being of an advanced society.E-commerce here is used in
an inclusive sense, handling the push of technology as
well as the market pull to actually generate and maintain
electronic markets.
Due to information technology (IT), electronic markets need
to be designed and pre-specified with an engineering mind-
set. Market design has to take into account both the supply
side as well as the demand side. While suppliers prefer a
free unregulated market, consumers desire protection. Thus
technology and market characteristics may influence the
supplier-consumer relationship with regard to awareness,
control and trustworthiness, especially on the consumers’
side. These information systems represent an Internet-based
sales channel enabling buyers to find sellers matching their
needs. E-commerce usually refers to all kinds of commercial
transactions and business processes (e.g. online advertise-
ment, online banking, etc.)103. E-commerce has experienced
rapid growth in the last 16 years. This evolution is an agree-
ment amongst the participants, who freely select their most
convenient and profitable forms of economic interaction in
a market. E-commerce has experienced distinct technical
stages where the transition from one stage to the other can
be traced back to a struggle between buyer and seller.
Advanced technology leads to reduced search costs for the
buyers, while sellers use technology to retain these buyers
by increasing their switching costs. Switching costs emerge
for the customer when changing their preferred provider.
The costs can occur in several forms, for example, creating a
new account, getting acquainted with another online shop,
reading terms and conditions, losing access to additional
services like social shopping and useful recommendations
or by losing convenience coming from stored personal data.
Trust in one seller also creates switching costs, if the level of
trust in other sellers is lower. The amount of switching costs
depends primarily on the design of markets and secondarily
on technology. If, for example, the portability and transpar-
ency of user data and profiles would be a characteristic of
a given electronic market, this could reduce switching costs
for all sellers and may take away a competitive element. A
reduction of search costs is in the interest of buyers when
they try to obtain information about prices and products.104
At the same time search cost reduction reduces profits of
some sellers, if the buyer has an option to switch. In con-
sequence sellers aim for higher switching costs. Within the
present stage of technical development of e-commerce –
which may be called cooperative e-commerce – the seller
collects personal data to provide the best supply for the
demand and to bind the customer with services beyond
the narrow scope of his purchase. Knowing the customer
is a means to increase switching costs. In the history of
e-commerce, technology has been in favour of buyers since
in the majority of cases search costs were reduced105 and
markets became more transparent by advances of technol-
ogy. This contributed to an uncertainty of sellers. Sellers
were forced to invest in technology to upkeep switching
costs and to maintain a stable customer base. Here how-
ever, two cases must be distinguished. In a market where

44
Internet Privacy
106 Lin 2008, pp. 60-65.
107 Schafer et al. 2001, pp. 115-153.
108 Roth 2008, pp. 285-310.
109 Statista GmbH 2012.
commodity products are traded, improved technology leads
to increased market transparency, thus increasing control of
buyers. In more sophisticated markets, however, with heter-
ogeneous product offerings and advanced consumer tastes,
sellers are forced to improve awareness of their specific of-
ferings to increase control and trustworthiness106. This chal-
lenge to adapt to technical progress with uncertain return
of investments has increased the desire to “know the cus-
tomer” much better, and has required collecting personal
data to adapt to market changes. The collection of personal
data has the objective of learning what buyers need and to
match market supply to the demand of customers at lower
cost107. Thus e-commerce, in its forthcoming developmental
stage, may be characterized as data-centric.
4.1.1 E-Commerce Stakeholders
E-commerce has the same stakeholders as does any well-
known traditional commerce with the exception of the sup-
pliers of technology and the operators of electronic mar-
kets. They are known as “support services”, and generally
include all types of Web 2.0 services. The economic Nobel
Prize laureate A. Roth has studied relationships of E-markets
in order to specify rules for markets, and at the same time to
continue to allow free establishment of prices based upon
supply and demand.108
Customers
Contrary to regular markets, preferences of customers can
be collected at any transaction or even from basic inter-
action with the e-commerce platform. Customers’ desired
convenience level, price threshold, and the degree of choice
available are the three properties affecting customer be-
haviour. In Germany, the number of online shoppers in-
creased from 25 Million in 2005 to 34.1 Million in 2010109.
Customers usually begin a search for products by using a
“regular” search engine (58%), followed by visits to sellers’
websites (24%) and, more recently, by using social media
to either identify a common entrance point for online sales
(18%) or contribute directly to product design. This makes
the support services an ideal intermediary between custom-
ers and sellers, where the customer usually gets free ser-
vices and supplies personal data to the support service. This
may cause an information deficit for the supplier.
Businesses
From the late 1990s to the present, the dominant strategy
is to increase market share, which takes priority over profit.
In 2008, Amazon announced its first profit. To improve
customer relations, the following three factors have been
used either alone or in combination: (1) increased techni-
cal functionality, (2) increased complexity of product offer-
ings, and, (3) market properties such as size and variety.
Amazon is an example of the mixed strategy, applying all
three of the above factors to define the relationship with
their potential customers. Amazon offers far more than
books, and has extended their portfolio to include all items
within a stationary, specialized department store. The idea
is to improve knowledge about buyers’ behaviour in several
product domains and thus decrease search costs beyond
a single product. The increased complexity is possible due
to increased market size and cross domain personal data.
By introducing the e-book reader Kindle, Amazon increased
switching costs on customers’ side in the growing e-book
market, while due to Amazon’s size and data pool has the
means to reach beyond Kindle customers to sell additional
offered products. Online auction services like Ebay focus on
functional extensions to improve customer-to-customer rela-
tions. Social commerce companies like spreadshirt focus on
customer to business to directly involve the customer in the
value chain by giving them the opportunity to customize
products and help to shape the market properties accord-
ing to individual wishes. In Germany, the ignorance of the

45
110 Scheer et al. 2003.
relationship of these three factors to influence search as
well as switching costs led to market exits, e.g. by Quelle,
while Otto-Versand prospered. From 2005 to 2011, e-com-
merce turnovers in Germany increased by 80% up to €26.1
billion. In opposition to this development, offline retail
turnovers decreased by 0.8% down to €395.9 billion. Busi-
nesses are relying more heavily upon support services to
maintain a steady level of switching costs.
Administration
In general, public organisations offer services under the
name “e-government”. The objective is to increase the
service rate at lower cost. The technical bases to achieve
the goals of businesses and administrations are identical.
Public organisations, however, often cannot give custom-
ers a choice of how to perform regulated procedures, but
they are under more pressure to maintain a high level of
awareness, transparency and trustworthiness. One exam-
ple of Customer – to – Administration (C2A) e-commerce
is ELSTER which allows German tax payers to submit ap-
plications for online tax return. The new electronic ID card
(Elektronischer Personalausweis nPA) enables users to get
access to several e-government services, e.g. digital signa-
ture services110.
Support services
Growing complexity of many e-markets, the global reach of
e-commerce, and the distribution of value chains of suppli-
ers have caused an information overflow. Information over-
flow increases simultaneously with search costs and switch-
ing costs. Support services are a prerequisite to aid buyers
in handling information overflow. Today, the business mod-
el of specialised support services acting as intermediaries
between buyers and sellers is called “cooperative” and lays
the groundwork for future, even more advanced data cen-
tric e-commerce.
E-commerce is the operational part of e-markets depend-
ing upon classifications reflecting the legal, social and
ethical rules understood and accepted by buyers, but it is
not limited to exactly one object to be traded. Support ser-
vices of the intended transaction influence search as well
as switching costs. For example, most airline services offer
travel insurance, car rentals, and hotel packages in addition
to plane tickets. E-market design and the acceptance of its
rules depend upon cultural settings. Support services are
relatively free with regard to the methods they use for clas-
sification. The way in which inferences are generated is not
usually transparent.
4.1.2 E-Commerce: Co-Evolution of Technology
and Markets
Since its modest beginnings around 15 years ago,
e-commerce has undergone a dramatic increase in the
number of technical and economic changes. Organisa-
tions which operate information systems for electronic
trade have turned out to be both intermediaries as well
as sellers. For instance, Amazon provides a technical and
administrative infrastructure and adopts a role as an inde-
pendent third party to offer support services. Google and
Facebook act as intermediaries only, without taking the
role of a seller. Generally, any e-commerce company can
act as an intermediary, a market participant, an independ-
ent third party, or a consortium of firms or buyers. Usu-
ally, e-commerce actors require substantial investments
in systems development, but, once in place, they handle
larger volumes of market transactions at lower cost than
any other form of market organisation. Buyers’ decisions
to choose one seller over another depend not only on the
actual product bought, but also on additional services.
Examples are social shopping platforms, tools that ensure
convenient shopping like one-click ordering, recommenda-
tion systems, and customized products and services that
are of interest to buyers though not necessarily product-re-
lated. Electronic devices and the usage of specific services
in the e-market have become a positive social indication

46
Internet Privacy
111 Mellahi/Johnson 2000, pp. 445-452.
112 Farrell/Klemperer 2007, pp. 1967-2072.
113 Böhme et al. 2007.
114 Kaiser/Reichenbach 2002, pp. 25-30.
116 Sackmann/Strüker 2005.
of the lifestyle of important populations of consumers,
which, in addition, has forced sellers to become forerun-
ners in both technology and product ideas111.
Firms in e-markets face substantial technical and organi-
zational costs if buyers decide to switch to an alternative
seller or if their innovation is not embraced. In this case all
investments are lost. This investment is not only technolo-
gy-dependent, but is also influenced by regulations, ethical
and social standards, and by law. It has been proven that
the forerunner in applying technical progress has usually
been rewarded, but often faces problems when they must
adapt to regulations not common in the local market of
the seller. Often it is assumed that investments in hardware
and software, user training, behavioural changes as well as
reduction of non-technical barriers, e.g. investments in trust
and privacy, are the elements required to retain custom-
ers. The fact is that the higher the switching costs are, the
fiercer is competition for the uncommitted buyers112 and the
more the customers decide upon product specifications. Ex-
amples for such product specifications may include privacy,
fair trade, or environmental friendliness in addition to qual-
ity and price. The result is to build complex new markets
around already existing e-markets considered reputable
and trustworthy by their customer base113. In complex mar-
kets trust and privacy are in high demand, whereas markets
for commodity products tend to ignore violations of trust
and privacy114. Accordingly, ensuring customers’ privacy is
an important product specification for advanced products
which usually goes hand in hand with higher prices115, since
investment in awareness, control and trustworthiness some-
times exceeds the operational cost of the platform offered.
Beyond the capability to raise capital and participate in the
technical race, it can also be shown that a “good” migration
strategy from old to new technologies influences the pro-
gress of a specific business. Businesses must offer older
services along with new services to keep the old customer
base while attracting new customers at the same time116.
The majority of e-commerce sellers during the Internet hype
in the late 1990s were not able to keep pace with technical
standards. This led to a loss of customers due to the impos-
sibility of participating in economies of scale. Competitors
who could not maintain this speed of innovation vanished
from the market. Today, e-commerce shows a trend toward
(temporary) monopolies117, as many of the support service
operators are arguably a natural monopoly without the
negative impact of monopolies and market performance.
If this argument is not convincing, support services may
be considered part of a national infrastructure. Regardless,
e-commerce reveals the following benefits compared to clas-
sical commerce:
—— E-commerce reduces customers’ search costs for prices
and products faster than any other form of market.
—— The benefits for sellers and buyers increase the larger
and more complex the electronic market becomes.
—— The development of e-markets requires high expendi-
ture for establishment and maintenance. These costs
are composed of functional expenses, but also of char-
acteristics of market design, especially with regard to
trustworthiness.
—— The superiority of market-oriented coordination mecha-
nisms over hierarchical management is the source for
socio-technical, business, and social innovations.
So far the close relationship of technology and economic
rules expressed by the struggle of search costs and switch-
ing costs led to a unique co-evolution, which triggered and

47
118 Bakos 1997, pp. 1676-1692.
119 Buchmann 2012.
120 McAfee/Brynjolfsson 2008.
is characterized by a “market pull” and “technology push”.
Markets of the first phase of e-commerce were designed as
a mirror of classical commerce. This form of e-commerce
lasted from 1995 till about 2005. It simply imitated the
relationship of clients with a physical shop, but it reduced
cost and extended product selection. In the second phase,
cooperative services involved the buyers in e-commerce by
requesting that they share their experiences and opinions
about products and services, e.g. via online social networks.
Wisdom of the crowds as a factor for progress emerged
from user involvement and led to a large collection of data
about buyers’ behaviours. For instance, crowd sourcing has
made Wikipedia superior in speed of updates and quality of
information reliability compared to printed encyclopaedias.
Customer interaction generated a metric to judge cost ver-
sus benefit of each transaction phase in regards to econo
mic value. This knowledge triggered new business models,
but also required advanced technology. This transformation
to cooperative e-commerce began with the appearance and
acceptance of Facebook and other Web 2.0 applications
including search engines and recommender systems in
2006. Enabling customers to customize or design products
melded the roles of market participants and the concept of
a prosumer appeared.
Technology has usually favoured buyers by lowering search
costs thereby reducing sellers’ profits118. With increased
complexity the vast amount of information and data avail-
able became counterproductive to e-commerce growth
and called for another technical push. The result is the ap-
pearance of support services. The most obvious change in
markets is the entrance of third parties. The other is the
deconstruction of the value chain into its individual phases
by direct user involvement. The most likely but unintended
result is the build-up of “Big Data”119. It is claimed that “Big
Data” and its analysis will help to predict buyers’ behaviour,
and holds the potential to influence buyers’ behaviour with
regard to their perception of search and switching costs120,
which may change the terms and conditions of today’s
e-commerce market participants.
Today’s reality is the fast growth of support services devel-
oping methods to classify the information and to collect
personal data in exchange for free services to handle in-
formation overflow. Decontextualization, persistence, and
re-identification become threats to a trust infrastructure,
beyond the scope of existing regulation.
4.1.3 Classical E-Commerce: Market and
Technical Transaction Support
Client-server interaction is the technical term for the first
phase of e-commerce. The enduring contribution made by
classical e-commerce is the structuring of e-markets ac-
cording to transaction phases. Transactions are the means
to model interactions among users, and technology is the
method which supports both buyers and sellers. In classi-
cal e-commerce a transaction represented value genera-
tion was owned by a single supplier and characterised by
the interaction with the buyer. If the buyer was aware of
the reputation of the seller the balance of market influ-
ence was maintained. As a result, the concept of data
minimisation was conceived to guide the aforementioned
interrelationship and ultimately became an instrument to
ensure privacy.
E-commerce transactions of today are the result of past expe-
riences, common practices, and the adaption of the concept
of a transaction as the smallest unit of e-commerce121. Trans-
actions can be divided into five phases. The first three phases
consist of (1) establishing a relationship (2) bargainingthe

48
Internet Privacy
122 Better Business Bureau 2013.
123 FTC v. Toysmart.com, LLC 2000.
124 Kontogiannis et al. 2008.
terms of exchange (3) performing the exchange of the prod-
uct of interest. Phases 4 and 5 deal with control and conflict
resolution after delivery has taken place and one or more
parties claim a violation of obligations.
1. Initiation phase: The goal is to increase buyers’ aware-
ness and to establish trust. Sellers try to attract custom-
ers by applying the most appropriate technology to
reduce search costs. Users often start their search with
conventional search engines or with search engines and
catalogues of particular shopping platforms.
2. Negotiation phase: In today’s B2C and C2C e-commerce,
terms such as price, quality, and delivery time of prod-
ucts are subject to negotiation. Signalling the policies
of negotiation, and allowing the buyer to screen con-
tributes to a sustainable trust infrastructure.
3. Delivery phase: Delivery includes fulfilment of obliga-
tions. Numerous technical web-based solutions have
been developed to distribute digital goods to end users:
applications, music, games, and movies are distributed
via platforms such as Google Play Store, Apple iTunes,
Valve’s Steam and Amazon Instant Video.
4. Control phase: The German word “Kontrolle” is different
from the broader meaning of “control” in English. The
semantics of the term “control” also connotes audit,
surveillance, and conformance checking once delivery
is accomplished. The most popular control technol-
ogy is a public-key infrastructure (PKI). A PKI is a set
of hardware, software, people, policies, and procedures
needed to create, manage, distribute, use, store, and
revoke digital certificates.
5. Conflict Resolution phase: Traditionally, resolution
is done by self-organisation or legal institutions.
Unfortunately,the territorial principle of legal institu-
tions, as well as the extensive time required, demand-
ed other technology and organization be created. At
present 36% of all complaints are solved by an inter-
mediary specializing in Alternative Conflict Resolution
(ACR). One of the most successful companies is Better
Business Bureau122 where more than 1 million com-
plaints are resolved without legal intervention. With
regard to security and privacy, ACR has had an influ-
ence on US business practices. Ten years ago, in the
case of www.toysmart.com, the US Federal Trade com-
mission decided that seals and profiles must remain
protected in case of a conflict123.
4.1.4 Cooperative E-Commerce: Technology to
Coordinate Markets
Cooperative e-commerce involves customers in value
generation and receives its justification from segmented
transactions and information overflow as well as the in-
volvement of crowds. As shown in Figure 1, the service to
coordinate both customer interactions as well as the com-
position of distributed transactions has been taken over
by third parties called support services. These are not only
OSNs, but all the services described by the popular term
“Service-Oriented Computing”.124 Collaborative web appli-
cations began to integrate additional services into their
offerings to retain buyers and to increase their switch-
ing costs. This was accomplished by considering buyers’
demand and preferences beyond the purchase of the de-
sired product, e.g. payment services add functionality to
online shops beyond product acquisition. Web platforms
emerged and allowed consumers to actively participate in
the generation of content. The result and consequence of
increased buyers’ involvement is the generation and col-
lection of user data.

49
126 Brynjolfsson et al. 2011.
127 Buchmann 2012, pp. 143 - 188.
4.1.5 Data Centric E-Commerce: Technology
for Data
The exploitation of Big Data will be the dominant charac-
teristic of the upcoming evolutionary step in e-commerce.
Mostly, Big Data is considered a result of the present coop-
erative e-commerce and a threat to privacy on the buyer’s
side, and as a source for new business models on the seller’s
side. This difference of perception is due to increased pro-
ductivity of sellers125. Apple has become the most valuable
IT company, since in addition to the popularity of its prod-
ucts, the data available regarding customers’ behaviour
dominates location-based business and services. It is a justi-
fiable assumption that availability of data increases switch-
ing costs and retains customers126, which may have nega-
tive effects on the productivity levels127, if they become too
high. For instance, in physical book stores sellers know what
customers bought and what they did not. Once bookselling
had moved online and the use of mobile devices had turned
into common practice, store managers knew how customers
navigated through the store, how they were influenced by
promotions, reviews, and what others did. Predicting which
book will be read next or what customers can be influenced
to buy no longer belongs in a work of science fiction. Stor-
ing and analysing customers’ reactions to recommenda-
tions enable all sorts of personalization strategies, and may
open application of sales methods leading to sales not in
the interest of buyers. In 2005, companies were collecting
data, but made little use of it since they lacked the techni-
cal means and the analytical knowledge to do so. Around
50% of German companies gathered information about
purchase and payment histories and used information for
personalization and individualization efforts during contact
to customers. Only 11% collected data automatically and
more than 90% gathered data without the help of service
providers, but also confessed to having no strategy of how
to exploit data128. Today, technology for data collection
is available both in terms of the architecture of support
services as well as in terms of the hardware and software
needed. Data-centric e-commerce came about because of
three technical advances:
—— Volume: As of 2012 about 2.5 Exabytes are generated
every day, and this figure doubles approximately every
three and a half years129.
—— Velocity: For many services in e-commerce speed is more
important than volume. For instance, access to mobile
phone location data combined with shopping records
may give a better prediction about sales in a shopping
centre. Algorithms will, for example, track types of cli-
ents from cars parked on a parking lot at a particular
moment in time, and make inferences from this knowl-
edge about expected sales.
—— Variety: Big Data draws patterns from all sorts of struc-
tured and unstructured formats including textual mes-
sages, audit data or images. Data is received from sen-
sors or GPS signals, from cell phones, or gas stations
when a digitized form of payment is used. Many essen-
tial forms of data collection are new, e.g. Facebook is
just eight years old, Twitter six. Enormous streams of
data are tied to people, activities, and locations, and
finally to product and services sales.
While in classical and cooperative e-commerce, complexity
transformed security and privacy to non-technical barriers in
the competition for uncommitted buyers, in the data-centric
stage of e-commerce, willingness of buyers and contributors
to participate and leave personal data is the deciding factor
between sellers’ ability to succeed and society’s ability to gen-
erate increased productivity. On one hand trust can reduce
search costs (e.g. because a buyer does not need to compare
an offer with several others), on the other hand it increases

50
Internet Privacy
130 Leimeister et al. 2009, pp. 197-224.
131 Steam 2013.
132 Ibach/Horbank 2005, pp. 134-147.
133 Müller et al. 2011, pp. 129-131.
134 Weinhardt et al. 2009, pp. 391-399.
135 Augusto 2007, pp. 213-234.
136 Miller 2012.
switching costs and decreases capabilities to change sellers.
The means to balance trust and privacy is not secrecy, as pro-
posed by PET (privacy enhancing technology) but by trans-
parency and the TET (transparency enhancing technology).
Monitoring and Dashboards are the instruments and tech-
nologies of data-centric businesses to increase transparency,
and act as both a signalling and a screening tool.
Crowdsourcing
The concept of crowdsourcing130 allowed for the emergence
of new kinds of collaborative products, services and infor-
mation retrieval channels, such as open source software,
online encyclopaedias (e.g. Wikipedia), digital cartography
(e.g. OpenStreetMap), restaurant quality ratings, or loca-
tion-based services, or statistics about hardware and soft-
ware usage131. At first glance, the benefit is to the supplier
who outsources costs. However, closer examination reveals
that the consequences for the relationship and market bal-
ance can only be judged when one side becomes depend-
ent upon the other.
OSNs and mobile apps as CRM
Online social networks and businesses’ own mobile ap-
plications132 (e.g. Amazon’s Windowshop, Mercedes-Benz
Service app) open new ways of marketing, advertising
and communicating with and amongst customers. They
play an increasing role in terms of customer relationship
management, as they allow for personalized and context-
dependent offerings. In terms of OSNs, the advantage
for sellers is that users trust their friends and like-minded
contacts. Products being advertised through friends are
likely more relevant for buyers’ decisions than advertising
without personal context.
Aggregation and optimisation
In data-centric e-commerce, the development costs and
the design of e-markets depend firstly upon the chance
to incur switching costs and secondly on the technology
to allow this at the lowest cost possible. Cloud comput-
ing comprises the aggregation of all kinds of services at
extremely low cost. Nowadays services can be delivered to
end users by means of cloud computing133services, mobile
and desktop apps, or a combination thereof. Marketing
terms such as PaaS and SaaS (Platform/Software-as-a-
Service134) promise easy access for any number of users
at the same time. All of these services depend upon the
availability of cloud computing.
Cloud computing and its additional service offerings have
formed specific contexts. Ambient and pervasive comput-
ing extends this rather simple understanding of context to
individually preferred contexts. Here, context is an individ-
ually predefined subsection of the real world. In ambient
and pervasive computing appliances135, sensors, software,
and embedded systems are windows to the real world
providing real time data at any time. Automobiles, for ex-
ample, are equipped with sensors, making it possible to
report problems and failures immediately or even before
components actually break. Printers can detect when they
run out of toner, manufacturing lines report that they are
running out of certain resources, and estimate production
times depending on contextual information such as work-
load, order logs, or traffic conditions. Mobile devices can
be used for immediate payment in conventional stores
such as Starbucks136. Combining this technology with
other technologies such as RFID may eventually eliminate
the need for cashiers.

51
137 Sterritt 2005, pp. 79-88.
141 EU Directive 98/34/EC: “ ‘service’, any Information Society service, that is to say, any service normally provided for remuneration, at a distance,
by electronic means and at the individual request of a recipient of services.”
Future autonomous computing137 appliances will take these
developments even further. Web services for personalizing
and ordering products (e.g. car customization) will be con-
nected to the corresponding manufacturing lines and will
be able to instantly calculate delivery times and prices –
depending on current manufacturing lines’ contextual
information. The manufacturing process would then, for
example, be automatically begun just after the consumer
submits the order online. Business intelligence will optimise
the workload of manufacturing lines and initiate the de-
livery process to the customer as soon as production has
finished. Instant payment services allow for continuously
charging customers, therefore abandoning both pre-pay-
ment and post-payment in favour of in-time-payment. Fu-
ture dashboards will not only be web-based but also acces-
sible by mobile devices as well as embedded systems.
One of the great barriers for European and international
e-commerce is still its legislative weakness, effectively
hindering consumers’ trust in cross-border shopping. This
includes the handling and usage of data collected by the
support service. No customer is capable of judging the pos-
sible legal or other consequences of her future behaviour.
4.2 E-Commerce from the Legal Perspective
While the co-evolution of technology and markets leads to to-
day’s different co-existing forms of e-commerce, societal inter
relationships increase and call for the public stakeholders to
regulate differing interests. Due to the trend towards data-
centric business, data protection regulation is one option to
balance markets. The objective from a legal point of view is
to contribute to the undisrupted development between the
technological push, the market pull and the public interest.
Since data protection laws and principles exist, the pressing
question is, whether the regulation has kept pace with tech-
nological and economic development, and what options for
an extension of the co-evolution involving regulation should
be imagined. With regard to e-commerce, legal regulation
has two objectives: (1) Maintaining user privacy to the high-
est degree possible, while not hindering conclusion of bind-
ing contracts and correct execution of these contracts. All
stakeholders must be considered equally when setting out
principles for private data management. (2) General provi-
sions like contract law, protection of minors, consumer rights,
penal law, copyright law and competition law must of course
be observed in e-commerce, as anywhere else.
On the EU-level, provisions of web shops and communi-
cation in e-commerce are regulated by the “E-Commerce-
Directive” (ECD)138, the “Data Protection Directive” (DPD)139
and the “Directive on privacy and electronic communica-
tion”, (DpeC)140 implemented in Germany by the Teleme-
diengesetz (TMG), Telekommunikationsgesetz (TKG) and
the Bundesdatenschutzgesetz (BDSG). The “E-Commerce-
Directive” contains requirements for “information society
services”141 concerning transparency in e-marketing and
e-communication and for the liability of service providers.
The “E-Commerce-Directive” has been implemented in Ger-
many by the TMG. Information Society Services are treated
as telemedia services. Telemedia services are all electronic
information and communication services, which are not
telecommunication or broadcasting services, e.g. search
engines, social networks, online games, blogs and online
newspapers. Many “e-commerce” services fall under this
category, e.g. webshops, auction platforms, or app-stores.
The E-Commerce-Directive guarantees the general freedom
to provide information services between EU-Member States

52
Internet Privacy
142 Gola/Klug 2003, p. 4.
143 Gola/Klug 2003, p. 48.
and provides the basis for such services to be set up in other
countries without prior authorization. The directive also es-
tablishes which data a service provider needs to provide
about the organisation and about the service. Furthermore,
unsolicited commercial communication needs to be iden-
tifiable as such. Fundamental privacy principles are valid
for all “e-commerce”-services, regardless of whether they fall
under the DPD/TMG as “Telemedia Services” (e.g. auction
platforms, online shops, and teleshopping) or under the
Dpec/TKG as “Telecommunication Services” (for example
contracts concluded by mail). These principles are the con-
cepts behind all data protection regulations throughout Eu-
rope. Moreover, these principles are the standard for judge-
ment of whether an existing legal regulation encourages
privacy with respect to technology and economy or needs
to be adapted and reformed.
A lawful processing of personal information requires either
a permit by legal provision for the specific processing or the
informed consent of the data subject. According to the princi-
ple of purpose, personal data may only be processed for pre-
viously defined purposes.142 The principle of necessity states
that whenever personal data is processed only the data may
be processed which is necessary and only as far as necessary
to achieve a specific purpose.143 For example §§ 14 and 15
TMG and §§ 28 ff. BDSG clearly state for which purposes the
aggregation of users’ data is allowed. This limits service pro-
viders to fulfilling contractual duties, deviating only if justi-
fied interests outweigh those of the users or if the data is gen-
erally accessible from public sources. Purpose and necessity
must be transparent to the user upon request for consent as
well as in the case of provision-based processing. No general
data retention by service providers shall be conducted unless
the legal provisions expressly provide otherwise or if the user
gives his or her informed consent. Furthermore, personal data
is supposed to be collected directly from the data subject,
not from third parties (the principle is not contained in EU
law, but for example in § 4.2.1 BDSG). Exceptions require
a provision permitting or requiring that data be collected
without the data subject’s participation. Direct collection is
supposed to support the principle of transparency and ensure
the right to informational self-determination by enabling the
user to exercise rights to information, correction, and dele-
tion of personal data. The principle of data minimisation (not
contained in EU law, but in § 3a BDSG) demands that data
collection should be kept to a minimum with regard to con-
ducted business and data processing systems should be built
in a data minimizing manner.
The ECD establishes that national law needs to provide pro-
visions on electronic contracting, so that e-commerce trans
actions will not be hindered by legal form regulations, such
as “written form”. Some contracts, such as contracts concern-
ing financial credits from suppliers to consumers, need to
be in written form (signed by hand). The German Civil Code
(Bürgerliches Gesetzbuch) contains a special form provision,
custom-made for classical e-commerce which can replace the
written form. Since written form may actually hinder e-com-
merce, provision of this electronic form supports e-commerce.
Here, a qualified electronic signature, as defined in the Sig-
naturgesetz, is required. Electronic signatures may be applied
as a mechanism to simultaneously implement both privacy-
friendliness and e-commerce-friendliness. A digital or elec-
tronic signature has a high degree of reliability, and reduces
cost on the sellers’ side when it comes to authentication of
buyers. In addition, digital signatures promote privacy for the
customer by allowing aliases. This allows the establishment
of a pseudonym, which can be linked to users’ proper names
in the case of legal disputes, but otherwise protects the pri-
vacy preferences of users.
Since data collection and usage processing in data-centric
e-commerce is automated, manual monitoring for legal
compliance is virtually impossible for all stakeholders;
the user, businesses, and authorities as well. In addition,
monitoring of global providers by national authorities may

53
144 Granovetter 1985, pp. 481-510.
145 Callon 1998.
146 Callon 1998, p. 18.
147 An example from e-commerce would be buyer ‘A’ who buys book ‘X’ on amazon.com, because X was recommended to A by Amazon on the basis
of other consumers’ purchasing behaviour: “people who bought book Y were also interested in book X”. So, A decides to also buy X. In this case,
what has happened is that the sociotechnical network of Amazon and its consumers has contributed to generate a market frame consisting of
A (buyer), Amazon (seller), and X (product). In the economic transaction, it is only those three entities that interact to perform a price discovery
process and to conclude a contract stating that property rights are exchanged. None of the consumers who contributed to establishing this
market frame (by enabling Amazon to make a recommendation to A) is paid for its contribution; yet, without these contributions, the market
frame could not emerge.
prevent opportunities and may be legally cumbersome.
Thus, the concepts of data protection by design become
very important, data minimisation being one example, but
also means for users to have their privacy preferences en-
forced automatically.
E-commerce providers attempt to gain general consent from
their users to agree to their privacy policies, which users
are required to accept in order to use the service at all.
These practices are often unable to produce legally-binding
consent, because the policies are not specific in detail or
they are too extensive to be expected to be read by users.
Nevertheless, this approach is widely used and thus the (of-
ten unlawful) reality in e-commerce. This type of “consent”
in the present form is not able to enable informational
self-determination. Technological mechanisms which were
tailor-made for classical e-commerce, like Electronic Signa-
tures or PKI (Public Key Infrastructures), will not suffice,
since they do not react to the automated and implicit pro-
cessing of personal data by default. Thus, one conclusion is
that even if adequate principles for privacy in data-centric
e-commerce are indicated and contained in current legisla-
tion, they are not consequently carried out.
4.3 E-Commerce from a Sociological and
Ethical Perspective
E-commerce, like any other form of intrusive and adapted
socio-technical network, has a significant impact on so-
cieties. E-commerce enables transformations of social
interactions and ethical principles which do not affect all
stakeholders equally. In sociological terms, this section dis-
cusses potential effects of cooperative and data-centric e-
commerce on society. This will be done by focusing on the
buyer’s side, since here the changes usually are experienced
in a more or less passive fashion.
E-commerce takes place in an e-market, and from the point
of view of social theory, markets are embedded in the
structured social relations that constitute society.144 In this
sense, e-commerce may be called a reductive frame embed-
ded within the wider socio-technical networks of society:145
Reduction limits transactions to their economic purpose.
The other network relations are temporarily excluded and
not taken into account.146 For example, if a book lover is
served by a clerk in a bookstore who happens to be the
book lover’s neighbour, the latter relationship is suspended,
and the focus is on the relationship between buyer-product-
seller. With only the economic objective in mind, a price
and a contract is negotiated, with only buyer-product-seller
participating in the negotiation, although society at large
made such a meeting possible, and is most likely affected
by the transaction.147 E-commerce has an impact on society
as a whole which means that the socio-technical relations
overflow into the market frame of e-commerce. Overflow
makes the emergence of markets possible in the first place,
even if they are not part of market transactions as such.
4.3.1 Outside the Market Frame
The transformation of framed relations overflowing the mar-
ket frame between sellers, buyers, and products are outside

54
Internet Privacy
148 For the sake of brevity, we omit an extended discussion on the problematic of terms, such as “existential” and “purely functional.”
149 Hellmann 2005, p. 13.
150 Bourdieu 1982. Especially in affluent societies, participating in consumption is strongly related to social inclusion/exclusion, see Lamla 2011,
p. 96; see also Bauman 2009.
151 Mead 1934.
152 Miller 1998, p. 148.
153 Lamla 2012, p. 10.
154 Consumers increasingly expect offers to be submitted in a “personalized” way (Meißner 2008, p. 162).
the market frame, although effects may occur inside and
outside the market frame. For the domain of e-commerce it
is supposed to be a technology-supported form of consump-
tion. In social theory, consumption is more than the satis-
faction of existential or purely functional148 needs; instead,
classic consumption is attributed to a process of distinguish-
ing oneself from others in order to create a self and attain a
specific social position.149 Owning something is interpreted
as disposing of symbolic capital, signalling belonging to
particular social strata.150 Consumption, understood in this
way, attributes some kind of cultural significance to specific
products, i.e. sneakers signalling membership in a certain
sub-culture or cars symbolizing membership in a well-off
social circle. Furthermore, consumption is about the genera-
tion of a manifold of social relations, (e.g. when purchasing
things, trying on new outfits, talking about shopping with
peers, being advised by clerks etc.) within which interplay
between selves and others occurs and relations are estab-
lished that go beyond the basic purpose of purchasing. Via
consumption, selves strive to become desirable to fellow
human beings. For this purpose, consumers put themselves
in the position of those fellow beings, i.e. the “generalized
Other”151in order to gain insight as to how to appeal to oth-
ers. This generates relationships with those others.152
The process of creating a self becomes formalized and the
identity of a consumer is subsumed under a category. For
example, an e-commerce seller wants to portray a buyer as
a type of shopper with specific preferences, and represents
said buyer using bit strings within a known category of the
cyberworld that marks who that buyer is in a given market
frame. For example, cooperative e-commerce might serve
as an opportunity to find social appreciation via casting
oneself as price-conscious consumer.153 Taking this obser-
vation to its limits, cooperative e-commerce can mirror the
unstructured modern self, namely, when consumption is
not concerned with meeting existential or purely-functional
needs, but rather self-referential taking pleasure in pleas-
ure. Consumption associated with cooperative e-commerce
allows the establishment of social relations, but also serves
the simultaneous purpose of distinguishing oneself from
others, while networking with others to get cheap, quick
and easy access to rare products; to compare prices; to dis-
cuss product quality and advise each other or be personally
advised and addressed by suppliers154.
4.3.2 Within Market Frame
Whereas users/consumers, computers, servers, the Internet
etc. build the societal networks within which e-commerce
markets are embedded, the interplay and relations estab-
lished among all these entities also transform the market
from within. Transformation of framed relations between
buyers, sellers, and products are triggered by the unique
and new feature of e-commerce as compared to classical
commerce. Because an economic transaction deals with
digital “things”, it allows user participation. As a result, con-
sumers tend to be more tightly integrated into the produc-
tion and marketing process. Such integration might occur
with the knowledge of consumers; however, it also occurs
when consumers unwittingly provide data, e.g. receiving
cookies from DoubleClick when interacting with Amazon al-
lowing retailers and online advertisement firms to fuse mar-
ket research and marketing. The interrelationship of buyers
and sellers has exceeded the set market frame, which in

55
155 It is still open to question whether the escape of the overflowing relations from the economic transaction of the market frame brings about
negative externalities (the production of economic costs not appearing in the frame of the economic transaction), and thus causes damage
for societal economy as a whole by inducing information deficits on the consumers’ side (information asymmetry). If this proved true, the costs
produced by the information asymmetry would then have to be re-integrated into the economic transactional (or market) frame, in a similar
way as, say, the costs generated by fumes have been re-integrated into the market frame via emissions trading (see Chapter 7 ‘Constructing
Emissions Markets’ (MacKenzie 2009). Moreover, if the information asymmetry thesis is correct, Internet privacy can be considered an antidote
to the emergence of the asymmetry.
156 Anderson 2006.
157 Meißner 2008, p. 161.
158 Schelske 2008, pp. 186-188.
159 Callon 1986, pp. 196–233.
160 Buchmann 2012, pp. 15-62.
a long run demands a more equal distribution of benefits
between buyer/contributor and seller.155
The transformation enabled by cooperative e-commerce
also affects the products offered, as said products become
less pre-determined. This is due to:
(1) the opportunity for consumers to effectively influence
sellers;
(2) an increase in the quantity of suppliers and of products
participating in market.
This lays the groundwork for the emergence of niche mar-
kets, i.e. of markets offering products rarely asked for and
rarely sold.156 Appearances of niche markets are also shown
in “longtail” markets, in which falling demand of products
requires new involvement of consumers, e.g. by projecting
a specific self in the product. Longtail and niche markets
generate a hierarchy within the market frame, where profi
table sellers coexist with “small”, less influential shops. Si-
multaneously, the range of products offered becomes more
heterogeneous, where consumption has an opportunity
to escape from the commodity offerings157 and generate
a global or ubiquitous set of complex preferences158. The
global scope of cooperative e-commerce is governed by
dominating intermediaries, offering information and access
to certain preferred contacts of customers. From a social
theory point of view, such intermediaries can be understood
as “obligatory passage points” (OPP), i.e. as actors that man-
age to build a network in which they take a central position
allowing them to capitalize on the diverse interests of, and
to shape the behaviour of a manifold of actors.159 So far,
the e-commerce intermediaries have not taken advantage
of their OPP position by raising prices. This raises a question
that is of utmost importance for ethics, social theory and
economics alike, namely the question of guaranteeing fair
and diverse market relations.
4.4 The Benefits of E-Commerce
The term “benefit” suggests the existence of a provision list
showing the effects of e-commerce on society. This deter-
ministic view is far from reality. E-commerce is driven by
public interest, and the options available result from market
opportunities, which may have side effects requiring further
regulation. What might be beneficial to one member within
a group of stakeholders may be considered negative for an-
other160. Consider the indisputable increase of productivity
and cost reduction as well as product availability world-
wide: for some, a sign of increased freedom of choice and
participation while others may consider this an indication
of a wasteful exploitation of resources, including taking ad-
vantage of willing volunteers. In this chapter, the discussion
of the benefits of e-commerce happens in reference to a Eu-
ropean view of some core values: (1) free self-determination,
(2) democratic participation, and (3) economic well-being.
Nevertheless, the following view originates from the buy-
ers’ side. In order to address the supply side the changes
in market design are drastic. For example, suppliers wish

56
Internet Privacy
161 Meißner 2008, p. 158; Schelske 2008, p. 170.
162 Meißner 2008, p.186.
163 It has to be noted, though, that there exists a type of consumer who disapproves of the submission of such options. Consumers who follow
an internal “relevance hierarchy” tend to conceive of alternative offerings as a manipulative attack on their autonomy, severely restricting self-
determination. Lamla 2012, pp. 6-8.
that each user has economic ownership of his or her data,
which can be sold to data collectors and the user receives
a license fee, when the data is used. A second condition to
ease suppliers’ burden is to give up privacy completely, and
install an investigative institution to handle cases of unfair-
ness. The concept used here focuses on the demand side,
where a lack of market transparency generates information
deficits161 and in the long run endangers innovation e.g. by
potentially increasing inequality162.
4.4.1 The Benefits of E-Commerce for Free
Self-Determination
E-commerce and free self-determination have a relationship
with regard to the following four conditions:
1. Development of a self.
2. Free interaction with others. This encompasses the deci-
sions with whom to interact, what portions of the world
one incorporates into oneself, and how much informa-
tion one wants to allow others to have about oneself.
3. Free embedding in a society. There is no free interaction
without being embedded in a society. Society gives
space and rules to act.
4. Conviction that the picture about oneself is identical to
the pictures others have.
Development of e-commerce has three phases, whereas the
classical stage offered the choice to buy or not to buy. The
cooperative phase allowed the participation of buyers and
the current data-centric phase gathers information about
social relations. “Consumption” becomes the means of free
self-determination, in an effort to synchronise the image
one has of oneself with the image which is perceived by
others. Whereas the development of a self requires freedom
of choice, free interactions are improved by e-commerce.
Increasing the number of options for product selection
E-commerce promises to make items and services available
from all over the world, thus massively expanding the range
of commercial options one can choose from. Another posi-
tive aspect is the abundance of options provided by the stor-
age of customers’ search and order histories on e-commerce
platforms. Purchasing books on amazon.com is a case in
point, for the storage and smart correlation of information
concerning goods purchased in the past to suggest consum-
ers similar products to be purchased in the future. This cor-
relation increases the number of viable options that a self
might consider163 – options that one would otherwise have
to self-generate by investing considerable effort and time
into researching those alternatives.
Improving convenience, ease, and comfort of shopping
Another benefit of e-commerce is that it brings about the
possibility to search for, evaluate, select, and purchase goods
and services from home. The ability to determine the time
and date of the purchase provides more options for time man-
agement, e.g. taking care of the shopping on Friday evening
allows families to spend more time together on Saturday.
More options for self-expression
E-commerce provides new opportunities for self-expression,
in a semiotic as well as in a material way. As far as the
former is concerned, consumers may not only buy goods
but may also deliver an assessment of the product’s and
supplier’s performance afterwards, thereby expressing their

57
164 Bauman 2009.
165 Kronauer 2010, p. 147.
166 Hellmann 2005, p. 13.
experience. Moreover, those statements can be viewed by
others and thus become helpful information for making
future purchase decisions. As far as the material way of self-
expression is concerned, some suppliers have interactive
tools available to self-design products, especially fashion
products, such as T-shirts, sneakers etc.
Prosumers: Consumers becoming suppliers
Finally, e-commerce not only provides a multiplicity of op-
portunities for entrepreneurs to develop innovative busi-
ness models. The opportunity to develop new business
models contributes to self-determination. Consequently,
e-commerce also improves self-expression by reducing
the obstacles users face to run a business and become
entrepreneurs.
4.4.2 The Benefits of E-Commerce for
Democratic Participation
The interrelationship of democratic participation and
e-commerce is to be seen in e-commerce’s contribution to
productivity, which as a consequence increases material
wealth, which is a prerequisite of democratic participation:
1. Democratic participation is only possible if actors have
the opportunity to engage in social interactions, and
to materially benefit from these interactions. While so-
cial exclusion is a multi-dimensional aberration, often it
goes hand in hand with economic exclusion.164
2. Knowledge of the rules of democratic participation is
essential in order to exercise and to transform the rules.
This includes active and passive rights, e.g. to vote and
to be electable, and the freedom of selection to choose
one’s representative.
3. Democratic participation requires several types of
freedom: freedom of speech and thought, as well as
freedom of information, the right to assemble, i.e. the
formation of organisations, communities and social
relations.
Access to material wealth
Engaging in and benefitting from social interplay consti-
tuting the common good depends on access to material
products and services. Kronauer clarifies that participation
has a material, political-institutional, and cultural dimen-
sion165, and it is easy to see that every citizen needs to have
at least some access to the material goods produced within
society to gain the freedom which democratic participation
requires. Additionally, political-institutional participation to
a certain degree presupposes access to the material wealth
of a society, because possession also functions as a key to
social networks166.
Lowering costs: Access to public and other services
E-commerce promises to increase opportunities for less af-
fluent people to purchase as yet unreachable goods. By rais-
ing their standard of living, the opportunity to get involved
democratically may generally prosper, but also in regard to
the definition of e-markets. Firstly, there is a wider range
of products to be found online, and secondly, it is possible
to compare prices of various suppliers. As there are more
choices, one can decide on a product with better features
at a more competitive price. The resulting lower costs im-
prove access to goods and thus participation. Thirdly, peo-
ple might benefit from e-commerce as the latter facilitates
the delivery of public and other services. For example, some
information is sent out electronically instead of on paper,
e.g., bills and invoices but also newspapers, which decreas-
es costs and thus makes some services available for people
otherwise excluded from the service.

58
Internet Privacy
Facilitating access to market information
More accurate information about products, which in turn al-
lows consumers to make informed decisions, increases judg-
ment capabilities and expands knowledge about the rules
of how an economy or a democracy works. If it is true that
more information leads to greater confidence when mak-
ing a purchasing decision, e-commerce indeed strengthens
consumer protection. This is, however, not the only way
e-commerce might aid the problem of the information
asymmetry, in addition, political decisions and their global
interrelationships may be better understood, due to greater
access to information. Consumers who cannot network in
person can now build communities whose members mutu-
ally inform each other. In this sense, social commerce might
increase the role played by the consumer and democratize
access to market information.
Democratizing access to educational and
informational goods and services
In the ideal version of democracy, each citizen has the op-
portunity to take part in the political formation of will and
in decision-making actively or passively. In order to achieve
a perfectly democratic procedure of will-formation, citizens
must have access to information and must be able to re-
ceive various opinions staged through public discourse.
E-commerce could possibly function as an antidote to com-
mercialization pressures by making instruction media less
expensive, and by uncoupling teaching and learning from
a fixed locational setting. Thus, as e-commerce has the po-
tential to contribute to lowering media costs and making
media more widely available in electronic form, it might
contribute to democratizing access to information and
knowledge, and thus improve democratic participation (al-
beit indirectly).
Community building
Having access to a commercially motivated infrastructure
allows people to also use these infrastructures for non-
commercial purposes, e.g. for community buildings or
democraticactivities. Various online media e.g. Blogs, Chat
rooms, Wikis, are becoming knowledge-sharing resources,
which allow people to discuss their opinions and access in-
formation. Many of these communities are based around
a single topic, often highly cooperative and sometimes
establish their own unique culture giving them impact if
an interrelationship to the outside world exists. Community
building may democratize participation.
4.4.3 The Benefits of E-Commerce for
Economic Well-Being
Well-being in a German context describes the effort and
potential to strive for a “fair” and “equal” distribution of
wealth produced by the society as a whole. This is differ-
ent from other societies, since concepts such as “fair” and
“equal” are determined in a profoundly normative way.
Some recent definitions include life satisfaction or experi-
enced benefits. In a European context, however, well-being
describes the societally-accepted form of income distribu-
tion between all members of society.
Benefits for customers
The main benefit for buyers is their improved capability
to identify fitting products and services at any convenient
time. These are two aspects of market transparency: aggre-
gation of individual economic activities, and generating
informed consumers/businesses.
Aggregating individual economic activities and
rendering them visible (market transparency)
While economic transactions between individual sellers
and buyers hitherto have been accomplished locally and
rather randomly, ebay.com serves as an umbrella that re-
moves transactions from a locality and opens up a wide
range of searchable offers. This leads to an increase in
economic transactions and to an aggregation of individu-
al transactions, with the effect of wealth being generated.

59
168 Müller et al. 2011. Only a few of these services are available to citizens and are implemented on the E-Identity card. One reason is unresolved
privacy issues.
E-commerce enables the most efficient pooling of supply
and demand. By making this visible, the market becomes
more transparent. Due to increased transparency, markets
and the allocation of resources become more efficient, in-
creasing income generation and options for distribution.
Generating informed consumers and businesses
(market transparency)
Unless competition and freedom on the Internet is system-
atically restricted, e-commerce allows for the provision of
information to economic agents to make free and rational
decisions. Economically relevant news and even the atypi-
cal agents who act in illegal or unethical ways become the
focus of public attention easily. In this sense, product and
service quality is subject to a form of socio-economic self-
control, which adds trust, and reduces faulty purchases. It
is technically possible to create a global community of in-
formed consumers and businesses. Cooperative e-commerce
is more efficient than social commerce.
Benefits for businesses
Businesses or sellers need to increase their understanding
of customer preferences as well as communicate with other
businesses. In business communication, the exchange of
information is necessary due to transactions occurring in
phases, resulting in increased cooperation to achieve an
objective. Regarding communication with customers, the
reduction of search and switching costs is critical.
Communication within and between businesses
The Internet also plays an important for internal processes:
78.0% of companies claimed in 2005 they used the Internet
for internal communication. The main goal by doing so is to
increase efficiency. The Internet is used in a similar manner
to connect businesses with other businesses’ information sys-
tems (45.7% claimed to do so in 2005). 63.4% stated they
planned to intensify these kind of connections.167
Communication to customers
Any business that expects to grow profitably and effectively
will have to master the art of selling through e-commerce
channels. Today, technology is available to fit both product
design and e-commerce channels. This growth requires busi-
ness analytics and customer involvement to either enhance
the capability of existing channels and/or to identify at
a very early stage which channel is the most appropriate
for a product. In classical commerce this knowledge was
incorporated into the seller’s cognitive capabilities. Today,
such customer relation practices are global and thus more
predictable and fair.
Public administration
Public Administration services are most often referred to as
e-government but can also be seen as C2A (Customer to Ad-
ministration) e-commerce. The motivation of e-government
is not to increase profits, but to add to the convenience of
citizens, to lower the costs of a list of services, and to enable
a more efficient administration168.
Benefits for both customers and businesses
Besides being a channel of distribution, the Internet also
became the most important communication channel be-
tween customers and businesses. In 2005, 89.9% of Ger-
man companies could be contacted online, and 91.6% pre-
sented product information online. Almost one out of three
businesses (33.1%) used online advertisement to foster
sales. The Internet has an impact on customer behaviour:
48.4% of businesses claimed that customers often referred
to information given online. The majority of businesses did
not use different pricing models for offline and online sales
in 2005; only 27.7% claimed to use more flexible pricing
online. Customer data is of great importance: Even in 2005,
65.2 % of businesses stated that they collect and analyse
customer data. Payment history and buying behaviour were
of special interest. The main purpose of this data was to

60
Internet Privacy
170 Levitt 1984, p. 2.
171 Levitt 1984, p. 2.
172 Anderson 2006, p. 5.
173 Anderson 2006.
address customers more personally, e.g. through adver-
tisement (for 57% of businesses that was a goal). About
30.7% of businesses also stated data was used to optimise
internal processes, e.g. by making better strategic decisions
based on customer data. The collection of customer data
has become steadily more important since then.169
Globalization of markets for all
E-commerce further accelerates the “Globalization of Mar-
kets” already having been diagnosed in the early 1980s170.
The first sentence of T. Levitt’s paper reads: “A powerful
force drives the world toward a converging commonality,
and that force is technology. It has commodified commu-
nication, transport and travel. It has made isolated places
and impoverished peoples eager for modernity’s allure-
ments. Almost everyone everywhere wants all the things
they have heard about, seen, or experienced via the new
technologies. The result is a new commercial reality”.171
E-commerce further transforms this reality by continuing to
extend markets insofar as more suppliers have the chance
to sell more and diverse products.
Reaching narrow, specialised, and niche markets
The process of extension goes along with an increase in
the accessibility of rather small markets. Whereas a classic
retailer, due to the limitations of space is only able to offer a
limited range of products, e-commerce businesses can also of-
fer goods rarely sought: “The era of one-size-fits-all is ending,
and in its place is something new, a market of multitudes”172.
Businesses, such as Amazon, for example, are able to capi-
talize on the long tail products, “Our culture and economy
are increasingly shifting away from a focus on a relatively
small number of hits (mainstream products and markets) at
the head of the demand curve, and moving toward a huge
number of niches in the tail. In an era without the constraints
of physical shelf spaces and other bottlenecks of distribution,
narrowly targeted goods and services can be as economically
attractive as mainstream fare”173.

61
Privacy Threats
5 Privacy Threats and their Impact on the
Core Values
175 E.g. Telemediengesetz (TMG) Telekommunikationsgesetz (TKG) and Bundesdatenschutzgesetz (BDSG).
176 Proposal for a Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of
personal data and on the free movement of such data (General Data Protection Regulation) 2012.
177 OECD 2013.
178 OECD 1999.
179 FTC 2012.
180 FTC 1998.
In Chapter 4 we discussed many ways online social net-
works and e-commerce support the realisation of the core
values which guide our normative approach, introduced in
Chapter 2. However, the benefits of OSNs and e-commerce
are also accompanied by threats. In this chapter we inves-
tigate potential privacy violations in OSNs and the conse-
quences they might have for the core values. We start by
analysing OSNs. First we present central conditions whose
fulfilment provides privacy protection in OSNs. In order to
evaluate the threats to privacy in OSNs we analyse when
and how these conditions may be violated. This is the
purpose of the second section in this chapter. In the third
section, we explain how a violation of the central condi-
tions and thus a loss of privacy in the context of OSNs can
negatively impact our core values: free self-determination,
democratic participation, and economic well-being. We
then show that the analysis of OSNs to a large extent also
applies to e-commerce and mention additional aspects that
are relevant for e-commerce. We will conclude that the pri-
vacy conditions need to be fulfilled as far as possible in
order to safeguard our core values.
5.1 Conditions for Privacy Protection in OSNs
Analysing existing legal frameworks for data protection
and privacy protection principles from the relevant litera-
ture174, 175, 176, 177, 178, 179, 180, we have identified three condi-
tions which have to be fulfilled in order to gain privacy
protection in OSNs. These conditions are awareness, con-
trol, and trustworthiness. OSNs deal with personal data
of their users. In accordance with the EU Data Protection
Directive181, personal data is defined as “any information
that relates to an identifiable, living individual”182. This
includes data that is collected directly and data that is
derived from information processing. OSNs deal with this
data according to their policies, a set of explicit or implicit
rules. For example, these policies refer to the collection,
processing, disclosure, and retention of personal user
data. Privacy protection requires these policies to be in ac-
cordance with applicable laws and regulations as well as
user privacy preferences which may vary between users or
user groups. The formation of privacy preferences requires
user awareness of the privacy-relevant aspects of these
policies and their potential impact on the core values that
were identified in Chapter 2. Next, the implementation of
their preferences requires the users to be able to appropri-
ately control the policies and related processes in OSNs
that deal with their personal data in such a way that they
respect their privacy preferences.
As OSNs are very complex systems, user awareness and
control can only pertain to certain aspects of the OSN
policies that are then customized for individual users or
user groups. In addition, a base level of privacy protection
must be guaranteed for all users without requiring user
awareness or user control. Said base level can be achieved
if appropriate (legal) regulations are in place and if the
OSNs comply with them. Again, because of the complex-
ity of OSNs, users are unable to verify that OSNs respect
these regulations. So trustworthiness of OSNs in regard
to compliance with the applicable regulations is required.
In addition, trustworthiness also refers to the user prefer-
ences being respected by the OSNs, as this may not be

62
Internet Privacy
183 Schroeder 2009.
184 Krishnamurthy 2010, p. 66.
verifiable directly by the user. So we see that the coexist-
ence of awareness, control, and trustworthiness allow for
adequate privacy protection in OSNs.
5.1.1 Awareness
Awareness refers to the users knowing and understanding
which personal data about them is available to the OSN,
what is happening to this data, what the relevant legal reg-
ulations are, what the impact of OSN data management on
their privacy and the core values may be, and how they can
influence this data management. Such awareness enables
the users to develop and implement their privacy prefer-
ences in OSNs.
As mentioned above, OSNs deal with personal data ac-
cording to their policies, e.g. for collection, processing, dis-
closure, retention, and the support of third party applica-
tions. By choosing their privacy settings, users can adapt
these policies to their own privacy preferences. Awareness
refers to the user’s knowledge and understanding of the
relevance of these policies and the implications of various
privacy settings in order to safeguard privacy and the core
values. As policies may change over time, user awareness
must continue to develop with these changes. More pre-
cisely, awareness with respect to OSN policies refers to the
quality and quantity of personal data collected by and
available to the OSN provider and the audience to which
the user data within the OSN is visible. This information
includes data that the users have explicitly provided to the
OSN and data that is collected implicitly. For example, the
users may explicitly provide their gender to the OSN and
in the interaction with the user, the OSN may implicitly
record the user’s IP address. Next, awareness with respect
to the OSN’s policies refers to the users knowing how the
their personal data is handled by the OSN, in particular,
how it is processed, to whom and under which conditions
the data is disclosed, whether the data is modified, and
for how long and in which condition the data is stored
by the OSN provider. In fact, data processing may create
new personal information about users. For example, in the
GAYDAR experiment an MIT research group showed how
to deduce the sexual preferences of users from information
available about them on Facebook.183 Also, awareness re-
fers to OSNs allowing third party applications to run and
collect data in the OSN context. This awareness includes
the users knowing how to influence availability, processing,
and disclosure of their personal data and to control third
party applications by choosing appropriate privacy settings.
Furthermore, user awareness refers to the users knowing
how far they can justifiably trust the OSN to respect their
privacy preferences, to obey the applicable regulations, and
to deal appropriately with privacy threats. For example, this
refers to the user being able to trust that corrections and
deletions are performed by the OSN provider as requested.
5.1.2 Control
Once users have developed their privacy preferences in
OSNs, it is essential that they are able to implement them.
This requires the users to have appropriate control over the
OSN policies with respect to their personal data. Such con-
trol has several aspects.
The first aspect refers to the users being able to give and
cancel consent for data collection, processing, and disclosure
to third parties. For example, if users have given consent to
sharing their data with a partner site they must be able to
withdraw this consent and thereafter no personal user data
may be shared with the partner site. In fact, “informed con-
sent” is required, which means that a user “understands the
nature of the information and consents to it being received,
stored, processed, and analysed with [the users] knowledge
for a specific purpose, and possibly for a specific duration”184.

63
Privacy Threats
185 Wang et al. 2011, p. 5.
186 Roßnagel 2011.
A variant of this aspect is the possibility to use OSNs anony-
mously or under a pseudonym, for example when users par-
ticipate in a political discussion without being identified.
The second aspect refers to the users being able to access,
modify, and delete their personal data in the OSN or to
having it modified or deleted upon request. This includes
determining to whom and for how long personal data is
visible, in other words to segregate different audiences and
contexts, and to limit the retention time. It even includes
being able to delete all personal data in one OSN and move
it to another OSN.
The third aspect of control refers to users being able to re-
strict third party applications which are run in OSNs and
the collection of their personal data by these third parties.
5.1.3 Trustworthiness
The OSN provider must be sufficiently trustworthy to imple-
ment an appropriate level of privacy protection, taking into
account legal and social norms and user preferences. This
trustworthiness has several aspects.
First, existing regulations must provide an appropriate level
of privacy protection. This is not obvious since technologi-
cal development is very fast and it is difficult for law makers
to keep pace with this development. Also, in different coun-
tries there are sometimes many contradicting approaches
to privacy protection.
Further, OSNs must be relied upon to collect, process, dis-
close, and retain personal data in accordance with the us-
ers’ privacy preferences, social norms, and the applicable
regulations. We present a few important examples for such
norms and regulations to illustrate the complexity of this
issue. In OSNs personal data is collected and retained for
a certain purpose which is agreed to by the user or per-
mitted by law. For instance, using OSN data for targeted
advertising is a purpose to which users have agreed by
signing up to the OSN. Purpose binding requires the OSN
providers not to use the data for other purposes unless ap-
proved by user consent or by a legal regulation. A related
requirement is context binding which means that personal
data may only be visible in contexts agreed to by the data
subject or justified by legal regulations. For example, a user
may not want religious or political information to from her
private peer group to be known in the context of work.185
Another example is data minimisation186 which is required
by German law. It means that OSN processes gather and
process no more personal information than absolutely nec-
essary for their purpose. For example, playing online games
within the OSN environment does not necessarily require
the knowledge of user identities. Yet another example is
the requirement of context segregation by partitioned data
storage for different purposes. Regulations may also refer
to the interaction of OSN providers with users. For example,
when data about a user is collected from somewhere/some-
one else, the EU DPD requires the data subject to be noti-
fied about the data collection details such as the categories
of collected data and the purpose of the collection.187
Finally, OSN providers must be trusted to establish a level
of security that protects the personal data of the OSN users.
Even if OSNs respect all applicable regulations and user
preferences, they may not use appropriate technology to
protect the personal user data that is entrusted to them. For
example, protecting personal user data may require encryp-
tion. However, encrypted data is much harder to process
which may deter OSN providers from using it.
However, trustworthiness does not only apply to the pro-
vider of OSNs, but also to the behaviour of other users. In

64
Internet Privacy
188 Raynes-Goldie 2010, pp.1-4.
189 Dumortier 2009, pp. 119-137.
190 Karr-Wisniewski et al. 2011.
191 Narayanan/Shmatikov 2009, pp. 173-187.
192 Gross/Acquisti 2005, pp. 71-80.
193 Beye 2012, pp. 87-113.
194 Northwest University 2009.
195 Howison et al. 2011, p. 2.
196 BILd.de 2012.
197 Süddeutsche Zeitung 2011.
198 Johnston 2012.
199 Facebook 2012.
order to trust that their data is safe on OSNs, users must
be able to rely on their friends and other users not to dis-
tribute personal information or photos which the respective
user wants to remain private or available only to a specific
selected audience. Users should be able to trust other users
not to violate their privacy, regardless of whether this hap-
pens on purpose or involuntarily. The desire for trustworthi-
ness of other users can be referred to as social privacy as
opposed to institutional privacy.188
5.2 Threats to Privacy in OSNs
In Section 5.1 we presented three conditions that allow for
privacy in OSNs: user awareness, user control, and trust-
worthiness of the OSN provider. In this section we discuss
threats to privacy in OSNs. They become possible because
1) awareness, control, and trustworthiness are currently un-
satisfactory and 2) the circumstances for the fulfilment of
these conditions are not yet optimal. Analysing the current
situation in OSNs and the literature189, 190, 191, 192, 193 we have
identified three main threats. The first threat is re-purposing
and decontextualization which means that personal user
data becomes available and is used in contexts not agreed
to by the user or justified by law. The second threat is data
persistence which refers to data being available beyond the
time intended by the user or by law. The third threat is user
tracking and re-identification which refers to reconstructing
the association between a person and anonymous data.
5.2.1 Threats Regarding Awareness
As explained in Section 5.1.1 the condition awareness in
OSNs has two aspects: awareness in regard to the OSN poli-
cies and awareness in regard to the trustworthiness of the
OSN. In regard to policies, it appears to be very difficult for
users to have sufficient cognizance of which personal data
is collected, what may happen to the data, and what the
impact of this data management on their privacy may be.
For instance, users may not know that in addition to the data
that they intentionally submit to the OSN, they unintention-
ally leave traces that add to the personal data collected by
the OSN194, 195: websites visited, applications used, friends fol-
lowed, videos watched, messages written and deleted. Users
may not be aware of the access patterns in OSNs, for exam-
ple when they invite people to parties.196,197 Users may not
know in which ways their personal data is disclosed to third
parties that, for example, offer games such as quizzes in the
OSN context. Such applications may collect and use personal
data.198 Users may not know in which ways OSNs process
their data in order to derive more information. For example,
friend recommendation in Facebook is based on “mutual
friends, work and education information, networks you’re
part of, contacts you’ve imported and many other factors”199,
however, in many cases when a person is recommended with
which the user has no common friend, nor other common
information, it is unclear to the user why this person has
been suggested as a friend. Users may be unaware of oth-
ers revealing personal information about them by posting on
their OSN page. Also, users may have insufficient knowledge

65
Privacy Threats
200 Wisniewski et al. 2011.
201 Europe versus Facebook 2012.
202 Turow et al. 2005.
203 Nissenbaum 2011.
205 Data subject’s rights of access (§ 34 BDSG) and to rectification, erasure or blocking (§ 35 BDSG).
206 The Office of the Data Protection Commissioner, Ireland: Report of Data Protection Audit of Facebook, 2011. URL: https://www.dataprotection.
ie/documents/facebook%20report/final%20report/report.pdf
207 Deloitte 2012.
208 Compliance Week 2011.
209 Krishnamurthy 2010, p. 66.
210 Liu et al. 2011.
211 Majeski et al. 2011.
212 boyd/Hargittai 2010.
213 Madejski et al. 2011.
regarding where and how to choose privacy settings in ac-
cordance with their preferences. This lack of awareness may
lead to data becoming available and being used in contexts
not known to and not agreed to by the users (re-purposing
and decontextualization). In fact, currently, decontextualiza-
tion appears to be the most serious privacy threat in OSNs.200
Furthermore, users may be ignorant of the methods used to
process their personal data inside the OSN. For example, us-
ers may not understand why a certain advertisement is dis-
played to them or why a certain person is suggested to them
as a friend. Finally, users may not know how long their data
is retained by the OSN providers and that it may even be kept
after a user has deregistered from an OSN.201 This may lead
to data persistence far beyond user consent.
This unawareness of OSN policies is not so much caused by
the absence of information and options for choosing priva-
cy settings. In fact, OSNs typically provide extensive policy
descriptions and such options. It rather arises because of
the complexity of these descriptions and options. Also, this
unawareness is caused by the complexity of the related
technology that allows third parties to access personal user
data, for example by cookies.202, 203 In addition, users may
not be interested in understanding policies as they do not
perceive the potential implications for their privacy.
The second aspect of user awareness, users knowing that
OSNs are trustworthy in the sense of providing an adequate
level of privacy protection, is threatened because such trust-
worthiness is presently very hard to verify. Although many
laws and regulations exist that require OSN providers to
respect user privacy204, 205 and numerous auditing mecha-
nisms are applied to ensure the trustworthiness of OSN
providers206, 207, 208 most users have little knowledge about
these regulations and mechanisms and cannot estimate the
level of their trustworthiness. This is due to comprehensible
information about laws and appropriate auditing mecha-
nisms not being available as well as users not being aware
of their relevance.
5.2.2 Threats Regarding Control
As seen in Section 5.1.2, user control refers to users being
able to grant and cancel consent to data collection and
to accessing, modifying, processing, and deleting the col-
lected data. These aspects are not yet satisfactory in OSNs.
Although OSNs do enable users to control their OSN data
such as messages and photos, it has been shown by sev-
eral studies that user control by means of privacy settings
in OSNs is not yet appropriate as their usage is too dif-
ficult, they do not always offer a sufficient number of op-
tions, and defaults as well as options may be changed by
OSN providers.209, 210, 211, 212, 213 For example, a recent study
shows that many users fail to manage their contextual

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Internet Privacy
214 Ulbricht 2012.
216 Krishnamurthy 2010, pp. 65-70.
217 Facebook 2012.
218 Cheng 2012.
219 As of 03.09.2012.
220 Buchmann 2012, p. 207.
221 Sweeney 2000.
222 Bonneau et al. 2009, pp. 249-254.
223 Bonneau 2009, pp. 13-18.
224 Wondracek et al. 2010, pp. 223-238.
boundariesin OSN’s properly which leads to content
which was intended to be visible only to certain groups
such as friends or family becoming visible to others out-
side the designated sphere.214 Also, there is little control
of the indirect collection of personal data in OSNs. Such
data may be submitted by other users, for example by tag-
ging photos215 or may be generated by data processing
practices such as profiling (see Section 5.2.3). Indirect
data collection may lead to re-purposing and decontextu-
alization of directly collected data. In fact, data process-
ing typically requires the input of directly collected data.
But certain data processing practices may not be agreed
to by the user. Also, personal data of a user provided by
others may appear in contexts not agreed to by the user.
In addition to the lack of control over indirect data collec-
tion and generation, the user’s ability to access, modify,
and delete indirectly collected personal data is unsatisfac-
tory. For instance, data which has been submitted by users
may not be removable by other individuals that appear in
the photos.
In addition, user control over the retention time of their
personal data, be it collected directly or indirectly, is also
a critical issue. For example, according to its published
policy216 Facebook does not delete personal data such as
messages and photos from their servers but makes them
invisible to the users.217, 218 This leads to data persistence
far beyond the consent of the users. Also, because of the
lack of open standards and interoperability of OSNs, us-
ers cannot move their personal data from one OSN to
another.
5.2.3 Threats Regarding Trustworthiness
For several reasons the trustworthiness of OSNs is still inap-
propriate. It is challenged as OSNs and third parties have
the technical ability to collect and process personal data in
many ways that may not be in accordance with the user’s
privacy preferences or the applicable regulations. Trustwor-
thiness is also affected if OSNs do not properly implement IT
security mechanisms that protect personal user data. How-
ever, it is not only the OSN provider’s failure to implement
technical measures for privacy protection which threatens
the security of personal data. It can also be due to other
users who share personal information or photos without the
consent of the owner of that information. This may happen
involuntarily as a result of insufficient awareness or on pur-
pose with clearly malicious intent. Thirdly, regulations and
auditing mechanisms, intended to guarantee a basic level
of privacy protection, are not yet fully able to prevent these
threats and generate trustworthiness of OSNs.
We illustrate: advanced collection and processing tech-
niques and their potentially privacy invasive consequences.
The first example is data collection by tracking a user’s web
activities outside the OSN environment such as Facebook’s
“Like” button, a plug-in that allows Facebook users to share
their interests.219 Another technique is re-identification
which is possible because a sufficiently large subset of per-
sonal user data, for example a small collection of friends,
is known to uniquely determine the user even if no explicit
identifying information is provided220. This has been con-
firmed by several studies.221, 222, 223, 224 The possibility of

67
Privacy Threats
225 Narayanan/Shmatikov 2009, pp. 173-187.
226 Hildebrandt 2008, pp. 17-45.
227 Hancock et al. 2007, pp. 449–452.
228 Buchmann 2012, p. 236.
229 Buchmann 2012, p. 233.
230 boyd 2008, pp. 13–20.
231 McKeon 2012.
re-identification interferes with the option to use OSNs
anonymously or under a pseudonym. Further advanced tech-
niques lead to re-purposing and decontextualization. Re-
purposing may happen when user profiles are constructed
from data that is available to the OSN.225, 226 Profiling tech-
niques use data collection, e.g. by log file analysis227, and
data processing such as data mining.228 Decontextualiza-
tion may happen because of inappropriate access patterns,
for example, when a user’s unflattering photos posted on
a friend’s page become accessible to her parents-in-law.229
Decontextualization may also happen when user tags on
images contain meta-data such as profiles of persons on the
photo. Such decontextualization may be caused by inappro-
priate default settings and changes in the access rights over
time230, 231. The latter OSN settings often go hand-in-hand
with inappropriate user behaviour. Decontextualization is
also caused by other users who may share images and per-
sonal data or tag their friends in photos without authoriza-
tion. If there are no control mechanisms implemented by
an OSN which request authorization by the data’s owner,
this constitutes a threat to the perceived trustworthiness
of an OSN. In addition to the OSNs and their individual us-
ers, third parties that collaborate with OSNs may also apply
privacy-invasive techniques to OSN user data. For example,
third party apps which are offered within the OSN environ-
ment may ignore the data minimisation requirement by col-
lecting personal data beyond any control.
The second threat to trustworthiness is caused by OSNs
not properly protecting the security of the personal data
of their users. For example, encryption technology may
not be applied appropriately or access protection mecha-
nisms may be insecure. Also, secure operation of OSNs re-
quires the OSN employees to satisfy security requirements.
Where there is inadequate protection, third parties have
an easier time gaining access to sensitive information
within the OSN.
Thirdly, today’s legal regulations and auditing techniques
that are supposed to prevent the application of privacy-
threatening techniques described in the previous sections
do not fully guarantee this. Laws and regulations do not
yet reflect existing technology adequately. Even more im-
portantly, OSNs are “global” while regulations and laws
are “local,” e.g. applicable only in certain countries. Dif-
ferent cultures and preferences may lead to variable and
sometimes conflicting regulations. For example, in the U.S.
data processing is permitted unless explicitly prohibited
by law. In contrast, German law prohibits data processing
unless expressly permitted by law. This makes it difficult
for OSN providers to implement their systems in accord-
ance with all regulations. Additionally, auditing mecha-
nisms do not yet work as intended. They are again “local”,
their value is unclear, and they are not sufficiently trans-
parent to users.
5.3 The Impact of Privacy Threats on the Core
Values
In Section 5.2 we discussed threats to privacy in OSNs.
As explained in Chapter 2, we consider such risks to be
relevant if they have a negative impact on the core values
defined there. In the following we discuss this impact. It
would be desirable to illustrate this impact with relevant
examples. However, we will only be able to give examples
for the negative impact of the threat of decontextualiza-
tion as this appears to be the most critical issue in OSNs

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Internet Privacy
232 Opsahl 2010.
233 The Smoking Gun 2007.
234 Fowler 2012.
235 CBS News Montreal 2009.
236 Aberjhani 2012.
today. Nevertheless, even though somewhat speculative,
we consider it important to illuminate other possibly
negative effects on the core values. Such possible impact
influences the behaviour of users in OSNs and may be-
come more serious in the future. The considerations of
this section will enable us in Chapter 6 to propose ap-
propriate measures that balance the advantages of OSNs
for the core values presented in Chapter 4 with the risks
described in this chapter.
5.3.1 Threats to Free Self-Determination
In Chapter 2 it was explained that free self-determination
requires individuals to be able to present themselves as
the self they choose to be within the interplay with others.
In Chapter 4 we saw how OSNs can support this require-
ment. However, the threats presented in Section 5.2, in
particular repurposing/decontextualization, data persis-
tence, and tracking/re-identification, can negatively af-
fect free self-determination and, in particular, the aspect
mentioned above.
Re-purposing and decontextualization can negatively in-
fluence free self-determination since both may lead to per-
sonal data being disclosed to individuals who are not the
intended viewers. There are several examples that demon-
strate this. In 2007 a woman claimed that her teaching
career had been derailed by college administrators who
unfairly disciplined her over a MySpace photo that shows
her wearing a pirate hat and drinking from a plastic cup.232
This photo was not meant to be visible in the college
context. Another example is the case of Bobbi Duncan
whose sexual preference was exposed to her father and
200 Facebook friends against her will when another user
added her to a Facebook discussion group. As a result,
her father left threatening messages on her phone.233 A
third example is the case of Nathalie Blanchard of Que-
bec who lost disability insurance after she posted a photo
on Facebook.234 As seen in Section 5.2, decontextualiza-
tion in OSNs may happen in many ways. Users may be
unaware of the context in which their personal data is
visible or they may be unable to choose appropriate pri-
vacy settings. Users may reveal personal information of
others as in the above example. Personal data may also be
generated by data mining techniques as in the GAYDAR
experiment (see Section 5.2) or collected by third parties
without the data subject’s consent. Again, this may lead
to personal information being disclosed in inappropriate
contexts. In each of these cases, self-determination of OSN
users may be seriously harmed directly or indirectly. It is
harmed directly, if the sharing of personal data leads to
negative consequences for the user as in the above cases.
Self-determination may be also compromised indirectly.
The possibility of decontextualization can make users feel
reluctant to make full use of OSNs235, 236 and can prevent
them from taking advantage of the positive impact of
OSNs on self-determination described in Chapter 4.
As with decontextualization, the possibility of tracking
and re-identification may also negatively affect self-deter-
mination. Users of OSNs may not want their whereabouts
or identity to be disclosed in certain contexts. This is why
they may use pseudonyms or act anonymously. However,
as explained in Section 5.2, tracking and re-identification
techniques are advanced, potentially making anonymous
information linkable to identities. This may lead to personal
information being disclosed in contexts not intended by the
respective individual. Again, the negative impact on self-
determination may be direct (negative consequences for us-
ers) or indirect (users becoming reluctant to use OSNs that
may otherwise support free self-determination).

69
Privacy Threats
238 See Goffman 1973. See also Deleuze/Guattari 1987. And see Whitehead 1941.
239 Miller reports of an informant (Marvin), whose marriage got into trouble. After having fought with his wife in the networked public of Facebook,
there is no chance of forgetting about the issue. Miller 2011, p. 12.
240 boyd 2007.
241 Wang et al. 2011.
242 boyd 2007, p. 9.
243 Tsai et al. 2007.
Data persistence may make the issues discussed so far even
more serious. Self-determination does not refer to a process
of creating a self that, once it is achieved, is settled once
and for all, but to a constantly ongoing endeavour. Creat-
ing a self is a constant becoming, including the process
of ongoing self-transformation.237 Storing personal informa-
tion for an unlimited time period may lead to individuals
being held responsible for past actions which may inter-
fere with their right to self-transformation.238 This is even
more critical when re-purposing, decontextualization, or
re-identification is applied to persistent data.
5.3.2 Threats to Democratic Participation
The discussion in Section 5.3.1 applies equally to the core
value of democratic participation. In Chapter 4, it was
shown that democratic participation may be considerably
supported by OSNs. However, political opinions and actions
provided to OSNs or inferred from OSN information may be
de-contextualized, again leading to negative consequences
for the respective individuals or to them being discouraged
from using OSNs in political discourse.239, 240 Anonymous
or pseudonymous participation may be of particular impor-
tance when OSNs are used for democratic participation. So
the possibility of re-identification may have an extremely
negative impact on democratic participation. Possible data
persistence makes things much worse as the political devel-
opment of individuals is typically very dynamic. Since the
relevance of social networks for communication processes
is increasing, the discussed threats to democratic participa-
tion in OSNs may have very a negative impact on demo-
cratic processes in general.241
5.3.3 Threats to Economic Well-Being
The privacy threats identified in Section 5.2 may also
have negative consequences for economic well-being. A
fundamental characteristic of OSNs and their business
model is the collection and dissemination of data. Privacy
violations such as re-purposing, decontextualization, data
retention, tracking, and re-identification may lead to an
information deficit on the user side: users know less about
the usage of their personal data than OSN providers or
third parties. Such information deficits may reduce the
benefits of OSNs in three ways. First, there may be direct
effects, e.g. unfair pricing since the users do not know
what the value of their personal data is. Next, there may
be indirect effects. For example, information deficits on
the user side, and, more generally all potential privacy vio-
lations, reduce the trust in OSNs and thus the willingness
of new users to join OSNs. Also, they may reduce the at-
tractiveness of OSNs to potential professional customers,
e.g. supply-chain industries like app communities. This, in
turn may lead to a growth of OSNs below their potential.
Thirdly, there may be induced effects. Due to privacy viola-
tions, OSNs may become less attractive as infrastructures
for communication, cooperation and coordination of pro-
fessional customers. As a consequence, these potential
customers may experience a growth and development
below their potential. Another possible negative effect
of privacy violations in OSNs on economic well-being is
closely related to what has been discussed so far. Privacy-
friendliness can function as a seal of quality of OSNs and
may increase their value which has been shown by Tsai et
al. (2007)242 and Böhme and Koble (2007)243. Therefore,
privacy threats to OSNs may diminish their value.

70
Internet Privacy
244 Böhme et al 2007.
245 Suggesting that this effect is widely unwanted: Turow et al. 2009, pp. 1-27.
246 Roßnagel et al. 2003, p. 184.
247 Nissenbaum 2011, p. 35; Turow et al.2005, p. 26.
248 PWC 2011.
249 Recent data breach incidents are proof of that, e.g., yahoo data leak from July 13, 2012 (TAZ.de 2012) but also with the Amazon daughter
Zappos.com, Inc. in early 2012 (Financial Times Deutschland 2012) as well as Sony in 2011 (Süddeutsche 2011).
5.4 Threats to Privacy in E-Commerce and
their Consequences for the Core Values
As there is a close connection between OSNs and e-commerce,
much of what has been said about threats to privacy in OSNs
and their consequences for the core values also applies to e-
commerce scenarios. However, while users typically deal with
only a few OSN providers, in the e-commerce scenario, many
more actors are involved, for example search engines for lo-
cating goods and best offers, online merchants, and banks.
This makes the threats to privacy even more serious.
As for OSNs, also in the e-commerce context, adequate lev-
els of user awareness, user control, and trustworthiness of
the e-commerce platforms ensure privacy protection. Aware-
ness again refers to the users understanding the relevant
aspects of the policies regarding personal user data applied
by the numerous e-commerce participants. Personal data
that is directly submitted by e-commerce users is, for ex-
ample, payment information, comments on products, and
wish lists. Personal information that is generated by data
processing includes browsing habits, interests, and shop-
ping behaviour. Awareness also refers to e-commerce plat-
forms being sufficiently trustworthy to respect regulations
and user preferences. Control again refers to the users be-
ing able to influence the policies in such a way that their
privacy preferences are respected, e.g. in regard to sharing
their data with third parties. Finally, the condition trust-
worthiness refers to all e-commerce actors’ responsibility to
respect user preferences, the relevant privacy laws, and to
provide appropriate data protection.
As in OSNs, awareness, control, and trustworthiness
for e-commerce platforms are not yet satisfactory. User
awareness is threatened as the many e-commerce actors
require and collect differing amounts of personal data, and
use it for many purposes, for example targeted advertising,
and analysing user behaviour and preferences.244 Also, user
awareness is challenged as the e-commerce actors apply
(different) privacy policies that may not be available or com-
prehensible for the users.245, 246 Also user control is threat-
ened in e-commerce as the control mechanisms provided
by the many e-commerce participants may be unsatisfac-
tory or unusable. Finally, trustworthiness of e-commerce
platforms is threatened. Local laws and regulations may be
inappropriate for the digital world. Given the global char-
acter of e-commerce it is unclear which law is applicable.
Also, in view of the large number of participating institu-
tions it appears to be extremely challenging to establish
convincing auditing mechanisms. Finally, implementing
appropriate data protection mechanisms is very challeng-
ing and costly, particularly for small enterprises that partici-
pate in e-commerce.247, 248 As for OSNs, a lack of awareness,
control, and trustworthiness may lead to serious threats
to privacy: decontextualization, re-purposing, tracking,
re-identification, and data persistence.
The threats to e-commerce privacy challenge the core val-
ues of free self-determination, democratic participation, and
economic well-being. The analogous discussion for OSNs is
also applicable here. In addition, there are a few more is-
sues specific to e-commerce. As buying goods and services
on the Internet is becoming inevitable, users are forced to
accept the privacy standards of the e-commerce vendors.
For example, users may be deprived of the possibility of re-
fusing to be tracked and profiled and receiving targeted
offers, although these practices are not a primary purpose
of the interaction between customers and online vendors
(re-purposing and decontextualization)249. This leads to
users not obtaining equal treatment, e.g. lowest offers and

71
Privacy Threats
250 Schaumann 2013 gives the example of a 17-year-old searching for weight loss products and solutions who is presented with weight loss ads
which make her focus on that topic and thus reinforcing that “interest” in a negative way.
251 Turow et al. 2005, p. 25.
252 Singer 2011.
253 Spiekermann 2006, pp. 47-52.
pricing.250, 251, 252 The multitude of channels (e.g. email, ven-
dor web sites, OSNs) and methods253 (e.g. demographics
of the customer, analysis of past buying behaviour, user
comments and ratings, tracking and re-identification) make
this a very serious threat to self-determination. The same
mechanisms may also have a negative effect on democratic
participation. E-commerce profiles of political candidates
could be used against them by their competitors. Profile-
based targeted advertising may also be used in the context
of political elections. Finally, these techniques may also
have a negative impact on economic well-being. Customers
may not get the best offers and prices and vendors may
obtain unfair advantages over their competitors.
5.5 Conclusion
We have shown in this chapter how privacy may be com-
promised in online social networks and that these privacy
violations may have a negative impact on the three core
values of free self-determination, democratic participation,
and economic well-being. In order to reduce the negative
impact on the core values, it is important to satisfy the
basic privacy conditions of awareness, control, and trust-
worthiness laid out in Section 5.1 as much as possible.
Options on how to fulfil said conditions by implementing
the appropriate measures are presented in Chapter 6 of
this document.

73
Options for Achieving Privacy
6 Options for Achieving Privacy in Online
Social Networks and E-Commerce
254 Schafer et al. 1999, pp. 158, 160, 161.
In Chapter 4 we have explained how OSNs can support the
core values identified in Chapter 2: democratic participation,
free self-determination, and economic well-being. In Chapter
5 we have identified, firstly, conditions that, when met, en-
able the implementation of these values: awareness, control,
and trustworthiness. In a second step, we have identified a
set of threats to the implementation of these values, and
shown how they relate to the conditions: decontextualiza-
tion, persistence, and re-identification. In this chapter, we
present possible scopes of action, or options, that can help
enable the conditions and counter the threats.
Both OSNs and e-commerce are terms that go well beyond
their technical implementations. While OSNs encompass
their usage and the societal consequences of this usage,
e-commerce also refers to the economic, and therefore so-
cietal, institution to enable e-commerce as another form of
commerce. This broader societal perspective motivates our
decision to provide options for achieving privacy and trust
in one combined chapter.
This societal perspective also intuitively explains why OSNs
and e-commerce share many commonalities when it comes
to a culture of privacy and trust on the Internet, as defined
by the core values and conditions identified in Chapter 5. The
number of players may be different; their roles might differ
slightly; and the amount of data may be different: regardless
of all these variations, we do not see a qualitative difference.
The options for OSNs transcend the application domain of
OSNs (and OSN technology will continue to be a likely tech-
nical option for e-commerce as well). It is also noteworthy
that recommendation infrastructures for e-commerce can be
seen as social networks in themselves. The oft-quoted differ-
ence that in e-commerce privacy is part of the product char-
acteristics254, for instance, the material a product is made of
does not change this observation of the fundamental congru-
ence of the two domains of OSNs and e-commerce. Offer-
ing and choosing among privacy policies, and screening or
controlling their enforcement is identical for both OSN and
e-commerce.Options to achieve privacy and trust are valid for
both. From an economic perspective, the major difference is
that in e-commerce, real products are exchanged and the sell-
er expects compensation; from the perspective of a culture of
privacy and trust, this difference appears to be immaterial.
In general, implementing anonymity and using pseudo-
nyms comes as an exception to this rule: the exchange of
goods and compensations typically requires knowing the
identity of the respective other party. However, when taking
into account that the electronic advertisement industry is
part of every e-commerce marketplace (and this is the most
obvious connection between OSNs and e-commerce), ano-
nymity and pseudonymity intuitively are desired tools from
a customer’s perspective as far as the advertisement-related
actors are involved. The other participants in an e-commerce
marketplace tend to have a natural interest in privacy: In
OSNs, data is made (semi-)public, while in e-commerce this
usually is considered an upfront violation of trust.
As a consequence of these considerations, this chapter con-
tains a common description of options for both OSNs and
e-commerce. To avoid abstraction, we deliberately formu-
late the options primarily in terms of OSNs, nevertheless,
every single option directly applies to e-commerce as well.
Distinctive idiosyncrasies of the e-commerce domain will be
highlighted as such.
We group the scopes of action, or options mentioned in the
first paragraph, into three sets that complement each other:
technology, education, and formal regulations/rules/good
practices. The need to combine the different classes of ap-
proaches – technological, regulatory, and educational – is
exemplified as follows. The derived privacy conditions can
be enabled by technology. For example, cryptography-based
authentication technologies help protect personal user data
from unauthorized access. However, OSN users may not trust
that OSN providers properly deploy such technology. Such
trust can be established by a legal regulation that requires

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Internet Privacy
255 Following the common perspective that every characteristic of a production and distribution process is part of the product, and that a buyer
also decides on these characteristics.
256 Roßnagel et al. 2001, p. 86.
the use of advanced authentication technology and a cor-
responding auditing process that establishes the compliance
of the OSN provider’s processes and technologies with the
regulation. However, technology and regulations are not suf-
ficient. For instance, if OSN services are designed in a way
that modern smart-card based authentication technology
is required, average OSN users may not know how to use it
appropriately. Thus, user education is necessary. Finally, not
all privacy risks can be prevented by technology, regulations
and consumer education. As in the non-cyber world, good
practices support privacy in areas not covered by regulations.
For example, it is a good practice that people do not abuse
private information which they have been granted access to.
In the following paragraphs, we present options for technol-
ogy, regulations, education and good practices that enable
awareness, control, and trustworthiness in OSNs and e-com-
merce and, at the same time, counter the abstract threats
of decontextualization, persistence, and re-identification. The
goal is to impair the positive effects of OSNs and e-commerce
on the core values as little as possible. However, we defer an
analysis of the respective trade-offs to the final recommenda-
tions provided by the project. In this spirit, we do not provide
recommendations with regard to any of these options: every
option has advantages and shortcomings, and the assess-
ment is often non-trivial. As an example, the benefits of a
regulatory duty by the OSN to inform users about the dissem-
ination of personal data are unclear if this means that twenty
such messages pertaining to a single user are sent every day,
or if the recipient cannot be expected to understand what
this means. In this document, we do not take into account
practicality or feasibility considerations.
Not providing recommendations and trade-off analysis
in this document also means that we deliberately do not
provide careful analysis of the options, but rather merely
present them as such.
The remainder of this section is organised as follows. For
each of the enabling conditions of awareness, control, and
trustworthiness, we discuss options in terms of regulations,
technology, and education (awareness: Section 6.1; control:
Section 6.2; trustworthiness: Section 6.3). We indicate for
each option which threat it potentially combats, i.e., decon-
textualization, persistence and re-identification. With the
relationship between threats and core values already laid
out in Section 4, we only occasionally refer to the directly
impacted core values. Section 6.4 concludes.
6.1 Awareness
6.1.1 Regulatory Options for Awareness
In terms of awareness, there is one fundamental regulatory
option:
OSN providers’ duty to inform
User awareness in regard to OSNs refers to users’ ability
to know and understand how and which aspects of their
personal data is available to whom on an OSN, for what
purpose, and how that data is processed and disseminated.
Acting self-determinately requires awareness of the modes
and results of processing personal data. To provide the re-
spective transparency, privacy policies would need to ad-
dress specific information about the structure and methods
of data processing, about how individual pieces of data are
being used, for what purpose; and to whom it is accessible.
Privacy policies would then need to be accessible at all times
and be updated instantly with regard to the data process-
ing policies adopted by social network providers.255 To this
end, transparency regulations would need to establish the
duty to provide information in a clear and understandable
format256, this specifically includes a reasonable decision
about aggregations and omissions. It might be helpful to

75
257 Roßnagel et al. 2011, p. 169. The EU-Commission Draft for a General Data Protection Regulation would establish this duty in Art. 11.2.
258 Bundestag 2011, p. 54.
259 Roßnagel et al. 2001, p. 154.
260 EU Data Protection Directive 95/49/EC.
261 German Civil Code – Bürgerliches Gesetzbuch.
262 Art. 1.2 of the EU Directive 98/34/EC as amended by the EU directive 98/48/EC: “‘service’, any Information Society service, that is to say, any
service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.”
develop standard privacy policies by legislation257 or – if ap-
propriate – by means of self-regulation.258 Privacy settings
would need to be specific and differentiated to simultane-
ously offer a variety of possibilities and be understandable
and usable.
European and German data protection regulations al-
ready contain provisions concerning information that
needs to be disclosed to the user. That information in-
cludes the identity of the responsible person with regard
to data collection, processing and storage, the purpose of
data retention, to whom the data is accessible, as well as
rights the user has against the responsible person (e.g.
Art. 10, 11 DPD259, §§ 5, 13 TMG, § 4.3 BDSG). Future
regulations could also include information related to the
structure and methods of data processing and the respec-
tive physical systems, as well as to the handling of derived
data, in order to make data retention more transparent.
In addition, future data protection regimes may require
that the information given be provided in a clear and un-
derstandable language for the average user (similar to
the current legal regulations concerning consumer law,
§ 307.1.2 BGB260). This must also be seen in connection
with the principle of informed consent.
In terms of e-commerce, every (market) regulation tends
to aim at protecting the buyers and, as a consequence, to
restrict the sellers. The “E-Commerce-Directive” contains
requirements for “information society services”261 concern-
ing transparency in e-marketing and e-communication
and for the liability of service providers. Therefore, the
“E-Commerce-Directive” has been implemented in Germany
by the Telemediengesetz. The EU directive might be taken
as a model to overcome the location principle of regulation.
6.1.2 Technical Options
There are two major ways that awareness can be enabled
by technology: transparency-enhancing technologies (TETs)
and notification tools.
Transparency-enhancing technologies
One technical option to enhance privacy awareness is for pro-
viders of social network services to deploy, and for users to
embrace, transparency-enhancing technologies (TETs). There
are two classes of TETs that can be leveraged to identify, as-
sess, and mitigate risks related to the lack of awareness on
OSNs: user-side tools and provider-side tools. Usually designed
as visualization tools and browser extensions, user-side TETs
are pieces of technology that help notify users, or anyone
acting on their behalf, about the intended collection, storage,
processing, and/or further sharing of their personal data, in-
cluding inferences drawn from that data, for instance, inter-
est profiles on the grounds of surfing behaviour in the OSN.
In addition, user-side TETs typically provide capabilities that
may assist OSN users in understanding how much sensitive
information they have (intentionally or unintentionally) dis-
closed, the disclosure contexts, as well as what privacy conse-
quences/risks this might bear (i.e. their levels of privacy). It is
also conceivable that such TETs provide estimates, in euros,
of how valuable the data they are providing to the OSN actu-
ally is. This would also be applicable to user profiles that ag-
gregate several sources. User-side tools include, among other
techniques, icons and labels for non-verbal privacy notices262,
machine-readable formats and related agents (nudges) for
signalling and negotiating privacy policies, and privacy dash-
boards deployed on the users’ end. In contrast, provider-side
TETs are tools that are deployed in the OSN operator’s back-
end system. They provide OSN users access to their stored

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Internet Privacy
personal data as well as information on how it has been
processed. Users can make use of these kind of TETs, firstly
to view and monitor how and for which purposes their data
has been processed, secondly to opt-out of certain uses of
their personal information or certain services, and thirdly to
inform themselves as to whether all this is in compliance with
existing privacy standards and/or policies negotiated with
the provider. By defining and allowing users access to appro-
priate APIs, provider-side TETs can give consumers, possibly
via apps, access to their OSN (possibly derived) data. This
allows opportunities to assess the impact of participating
in OSNs on their lives. Another dimension in which today’s
dashboards, in particular the provider-specific dashboards, ex-
hibit room for development is that they concentrate on data
managed by a single provider. The concept of “federated”
dashboards is one option to tackle this challenge. By inter-
facing with different OSN sites, providing details about what
personal data was shared, with whom, in which OSN, and
for what purpose, federated dashboards would support the
OSN users in understanding the full picture of their online so-
cial networking identity. Such federated dashboards can be
viewed as an integration point for various tools that, among
other things, may assist OSN users in exercises their right to
informational self-determination.
In terms of e-commerce, user-side TETs may not necessarily
seem to be useful tools when it comes to the mere end-to-
end exchange of goods against money. From the custom-
ers’ perspective, however, user-side TETs might turn out
to be useful, when considering that shopping and brows-
ing data is collected by intermediaries such as general
brokers. It is worth noting that while brokers may collect
this data in order to provide and improve their services,
they may not necessarily have an interest in sharing this
data, or only to a limited extent, because it is this data on
which their business is built. Moreover, provider-side TETs
appear to be necessary technology when the customers’
right to be informed (§34.1 BDSG) is enforced – upon
request, responsible parties have to convey which data is
stored for a customer, its provenance, and potential par-
ties to whom the data was forwarded, and the purpose.
Generalized TETs for intra- and inter-business data tracking
are then necessary – but also lead to a fundamental con-
tradiction between the data protection goals of transpar-
ency and avoided aggregation of personal data (“Nicht-
Verknüpfbarkeit”). Usage control technology might be a
technical option for tracking data provenance; resolving
the aforementioned fundamental conflict is a societal and
legal challenge.
Notification tools
A second option to enable transparency in Internet-based
social networking is to deploy notification tools. These
tools would automatically let OSN users know that privacy
breaches have occurred on the provider’s side. More im-
portantly, they would help both the provider and the us-
ers to understand possible implications of such breaches.
In spite of the rather straightforward notification features
currently supported by some OSN sites, an implementation
of a meaningful notification strategy (i.e., one that would
additionally give insights into possible implications of a pri-
vacy breach) does not seem to have been implemented by
any platform yet. A possible reason for this is the potential
negative influence of such a strategy on the OSN’s perfor-
mance and the provider’s image.
There does not seem to be a difference between these kinds
of notification tools for OSNs and e-commerce.
6.1.3 Educational Options
Internet-related socio-technical structures are shaped by a
multitude of actors, including users, providers, educators
etc. Generating awareness therefore pertains to all the
relevant actors involved. In what follows we will identify
these actors; sketch relevant content to be communicated
to them; and specify the methods for doing so.

77
263 Such privacy notices would provide a snapshot of the provider’s privacy policy, making it more comprehensible for users.
264 Kammerl/ 2010, Livingstone et al. 2011.
265 The listing is based on the German Bundestag‘s Enquete-Kommission “Internet und digitale Gesellschaft”, Projektgruppe Medienkompetenz
account (Bundestag 2011, pp. 20-31). We have selected those groups that are relevant as regards OSN usage and also added a few groups that
are not mentioned in the report.
Relevant actors
Although the overwhelming majority of OSN users are
young people, this is not the only group to be targeted.
All those who frequently interact with youth are a relevant
target group (thereby acting as a kind of multiplier) as well
as those who create the socio-technical structures within
which the action takes place. While educators sometimes
lack a sufficient understanding of the workings and difficul-
ties coming with frequent OSN use,263 they are only able to
assist young users if they are knowledgeable in these mat-
ters. We have identified the following groups:264 students
at school, students at university, apprentices, parents, edu-
cators/teaching staff at regular and professional schools,
journalists, and providers’ staff.
While the first three groups are the ones to be targeted di-
rectly, parents and teaching staff might assist them. Jour-
nalists are addressed here as multipliers. However, given
the press coverage the privacy issue has gotten in recent
years, there does not seem to be too much need for action
as far as they are concerned. The providers’ staff certain-
ly has a lot of influence on the shape of socio-technical
structures and is therefore a relevant target for creating
awareness.
Content of awareness raising activities
A first field of action could be to develop a widespread
understanding of, broadly speaking, the individual as well
as the collective challenges that might come with privacy
violations on OSNs: traces left unwittingly in OSNs (see
Chapter 5.2.1), the sensitivity of personal information fed
deliberately into OSNs, the fact that any utterance on OSNs
is at least visible to the provider and thus never as private
as an offline conversation, the risk of compromising other
users’ privacy by feeding information about them into OSNs
(e.g., images showing friends), and the question of whether
or not OSNs are trustworthy, and what that means. In sum,
there are three dimensions to be addressed: technology,
economic aspects, and rights and duties.
Understanding of preferences and the OSN
Assessing the privacy policies of a particular OSN and ex-
amining the extent to which these policies match individual
preferences presupposes two intellectual capabilities: first,
a reflection on one’s own preferences; and second, at least
a rough understanding of the workings of OSNs and of the
technological possibilities of OSN providers to process and
capitalize on data. This includes quality and quantity of ex-
plicitly provided and implicitly collected data, the visibility
of data for other users, providers, and third parties, and the
processing, disclosure, modification and terms of storage
(see Section 5.1.1). For example, users only have the chance
to realistically assess the privacy policies of a third party
app provider if they are aware of 1) what kind of informa-
tion they (don’t) want to disclose to whom, and 2) what
can be done with their information by the OSN as well as
the app provider, including the possibility of recombination
of previously separated data items (decontextualization, re-
identification). When informed about what information a
certain app extracts from a user’s profile (e.g. on Facebook:
“This App Needs: Your profile info… Your Stories… Friends’
profile Info… Stories shared with you…”) it appears possi-
ble to make an informed decision if there is awareness of
the providers’ technical possibilities to work with the us-
ers’ information, such as tracking users across different web
domains (see Chapter 5.2.3), and the generation of new
information via inferences (Chapter 5.2.2).
Understanding of the business’s interests
Many users do not have a clear understanding of the pro-
viders’ business models and interests, and thus of the value
of the provided data.265 Consequently, they have a rough

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Internet Privacy
266 Turow et al. 2005, for instance, found in a 2005 telephone survey that “most Americans who use the Internet have little idea how vulnerable
they are to abuse by online and offline marketers and how the information they provide can be used to exploit them (…)” The study’s findings
suggest a complex mix of ignorance and knowledge, fear and bravado, realism and idealism that leaves most Internet-using adult American
shoppers open to financial exploitation by retailers.“ (ibid.: p. 3) This “mix of ignorance and knowledge” was mirrored in our own focus group
study by participants indicating that, while they have a rough idea of the providers being somehow interested in their data, they do not know
exactly what providers can do with their data; they doubt it is at all possible for providers to analyse all the data divulged; and, anyway they
do not feed sensitive data into OSNs, which is why there would be no point for providers to be interested in it. In this sense, there is a miscon-
ception in many users‘ perspectives that perfectly fits the findings of a follow-up study of Turow et al. 2009, where the authors state, “In fact,
our survey found that Americans want openness with marketers. If marketers want to continue to use various forms of behavioural targeting
in their interactions with Americans, they must work with policymakers to open up the process so that individuals can learn exactly how their
information is being collected and used, and then exercise control over their data.” Turow et al.2009, p. 5.
267 Evidence is again provided by the sources already quoted in the previous footnote. One quote from our own focus group study is exemplary for
users’ assumptions of the law only being enforceable in a limited way on the Internet: „Diese Sache mit dem Studenten, der sich da die Daten hat
zuschicken lassen, da hat er ja dann irgendwie auch, soweit ich es mitbekommen habe, festgestellt, dass da gewisse Dinge fehlen, gewisse Einträge
oder Nachrichten. Und hat dann noch mal sich mit Facebook in Verbindung gesetzt und gefragt, wo denn der Rest ist, ein gewisser prozentualer
Anteil, der fehlt, wo Facebook daraufhin meinte, „nee, das ist Unseres, das geben wir nicht raus, das ist jetzt geheim“. Also quasi das gesamte Recht
über deine Daten, die du da abgetreten hast. Es ist einfach so unüberschaubar. Und deswegen würde ich auch komplett damit übereinstimmen,
wenn man sagt, man hat keine Kontrolle darüber, man kann das gar nicht wissen, was mit den ganzen Sachen passiert.” Turow et al. confirms for
the American case: „The survey further reveals that the majority of adults who use the Internet do not know where to turn for help if their personal
information is used illegally online or offline.” (Turow et al. 2005, p. 3); at the same time, however, “Americans mistakenly believe that current gov-
ernment laws restrict companies from selling wide-ranging data about them. When asked true-false questions about companies’ rights to share and
sell information about their activities online and off, respondents on average answer only 1.5 of 5 online laws and 1.7 of the 4 offline laws correctly
because they falsely assume government regulations prohibit the sale of data.” (Turow et al. 2009, p. 4) Thus, whether under- or overestimating
the rule of law on the Internet, many users have an incorrect conception of the legal situation on the Internet.
268 It is also possible to develop seals of quality for OSNs indicating the compliance of a given provider; as far as these are concerned, the educational
task would be to make users aware of the existence and relevance of those seals in order to measure the trustworthiness of various OSN providers.
idea of providers working with personal information, but
they may not have in mind that gaining and analysing such
information forms the core of their business model. Thus,
users’ attention could be directed to the fact that they are
dealing with businesses in the first place, and that their
activities are therefore part of some economic value chain.
Without awareness of the economic aspects of OSN proce-
dures, it seems impossible to fully understand the implica-
tions of certain specifications and expressions contained in
the providers’ terms of service.
Understanding of rights and duties
This is particularly important when it comes to OSN privacy
policies, because many users lack a clear understanding of,
and/or feel unable to cope with the legal situation on the
Internet. Thus, they either think of the Internet as some kind
of space where the law can only be enforced in a limited
way; or they falsely assume themselves to be protected by
legal regulations when in fact they are not.266 Some users
are not necessarily interested in their rights simply because
they do not care. Users must be aware of the sensitivity of
data retention policies, and they must learn methods to call
in the compliance of providers, and where to turn to in case
of infringement267. Providers could be made aware of the
sensitivity of the information they handle every day, so as
to make them take more responsibility.
Awareness training methods
Depending on the particular target group and content,
there are several possible awareness training methods.
Broadcasting and viral campaigns
In order to raise the general public’s awareness of OSN-
related privacy issues, a valuable strategy could be to
stage advertising campaigns via broadcasting networks
and the like. Responsible authorities could develop spots
for broadcast on TV and in movie theatres as well as post-
ers and ads in magazines.268 As far as parents are con-
cerned, it might prove difficult to reach this group; pres-
entations given at schools and other public places could

79
269 To give an example, Federal Government Crime prevention has developed a cartoon pointing out the dangers of feeding images of third parties
into OSNs. The material can be ordered free of charge by teachers and distributed freely within schools. Krempl 2012.
270 Bundestag 2011, p. 34.
271 Kammerl 2010, p. 57.
272 In this respect, the level of awareness within media pedagogy expert circles could be improved. For example, the Enquete-Kommission “Internet
und digitale Gesellschaft” mentions privacy in those documents dealing with media literacy and education only rarely (Bundestag 2011). It is
therefore not too surprising that the Konferenz der Datenschutzbeauftragten des Bundes und der Länder recently published an Entschließung
titled „Datenschutz als Bildungsaufgabe“, calling for data protection to be included as a basic element of media literacy education (Konferenz
der Datenschutzbeauftragten des Bundes und der Länder 2011, p. 159).
273 Bundestag 2011, p. 23.
neverthelessprovide them with the information required.
An option to address the target group of young people
would be to induce viral campaigns, which means to sys-
tematically spread the message to the users where they
are, i.e., in OSNs themselves.269
Systematic education at school and beyond
As far as teaching staff and educators are concerned, it
is common that the skills of students exceed those of the
teachers. Some researchers therefore call for a special train-
ing for educators of all kinds.270 Honing in on those making
the heaviest use of OSNs, i.e. young people, suggests that a
promising place to develop an understanding of the privacy
issues related to OSNs is school. Thus, it may be conceiv-
able to introduce a new school subject, similar to German
language teaching or mathematics. In this case, the tech-
nical intricacies of OSNs could be made a component of
media literacy classes,271 taught by specialised teachers. An
alternative would be to weave Internet privacy through the
overall curriculum, with all of the teachers and educators
receiving training on this topic. Still another option would
be to develop Internet safety training in a similar model to
drivers’ education courses. Given the extraordinary pace of
innovation on the Internet, however, one also might consid-
er tackling the issue by providing schools with space, time,
and infrastructure for students to learn from their peers. De-
veloping detailed training programs takes significant time,
therefore they might already be outdated by the time they
are implemented. From this perspective, then, self-organised
learning processes of the students, with the teachers act-
ing as navigators or catalysts of the educational process272
could turn out to be a viable option.
Educational options in terms of e-commerce seem less nu-
merous – in an explicit e-commerce setting, the customers
already know that the business partner pursues business
interests. Gaining an understanding of which data is col-
lected while engaging in e-commerce, and how this data
can be (ab)used, is a general skill that can be taught in
similar fashion to the options for OSNs.
6.2 Control
6.2.1 Control by Regulation
Once privacy preferences have been established, users need
to be able to formulate them and initiate their implementa-
tion in order to be able to control the collection, processing
and storage of their personal data.
Isolated, explicit consent
From the perspective of regulations and informal rules,
one option is to make user consent explicit and isolate it
rather than integrate it in general provisions (as already
stipulated by regulations). Users could be asked to repeat-
edly re-provide or withdraw their consent at regular inter-
vals in case they change their mind about the use of their
data.273 For the purpose of clarity, consent for data pro-
cessing could be disconnected from the terms of service by
having separate options (buttons) to give consent or with-
draw it at any time. Furthermore, opt-in concerning data
processing can be made a general default. This would
also raise user awareness concerning their rights because
they would actively have to make decisions regarding the

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274 Roßnagel 2007, p. 179; Roßnagel et al.2001, p. 70.
275 Roßnagel 2007, p. 179.
276 Facebook 2012: Facebook cannot plausibly explain why it does not allow pseudonymous usage with unreasonableness or impossibility, only
that its goal is to have real people connect on the platform.
277 Roßnagel et al. 2001, p. 148.
278 Roßnagel et al. 2001, p. 169.
policies. If desired, in order to nudge users to utilise their
privacy preferences and corresponding software agents to
manage their online privacy, OSN providers could be com-
mitted to the standardisation of interfaces and informa-
tion for their platforms.274
In terms of e-commerce, similar options apply. It is worth
repeating that there is a difference between explicitly pro-
vided data – data that, among other things, pertains to
shipping addresses, bank accounts, or product IDs – and
implicitly provided data such as browsing behaviour or cor-
relations with other data sets.
Anonymization, pseudonyms
Control with respect to choice/consent includes the right
to use services anonymously or under pseudonym. In this
way, the user may limit the amount of personal data dis-
closed to the OSN provider. A pseudonym is a fake name
which is used instead of the real name to hide the true
identity. This concept is already implemented in current
German legislation. However, said legislation is limited
to the anonymization of data only when it is no longer
needed, or as long as it is technically possible and reason-
able (as is the case in § 13.6 TMG). Some OSN providers
argue that a pseudonymous usage is not possible.275 This
objection notwithstanding, the right to anonymous or
pseudonymous usage could be established as a general
binding rule.276 Because an OSN provider or third parties
in limited cases may have the need to know the real name
of a user in specific situations, one option is to give users
the chance to provide their real name and additionally
choose a nickname which would be the one made public.
The real name could be provided to third parties who act
as trustees or intermediates.
In terms of e-commerce, anonymization and pseudonymiza-
tion need to be implemented in a way that business can
still be executed – money must be transferred, and goods
need to be shipped. In contrast, these techniques can be
applied to (derivations of) data and secondary data (e.g.,
browsing) along the chain of intermediaries, as long as
business can still be executed.
Communication of users’ rights and withdrawal of
consent
To further enable informational self-determination, ex-
ercising user rights might be made easier, for example,
when they do not approve of how their data is used, or
if they change their mind about sharing certain infor-
mation on an OSN. As discussed in Section 6.1.1 above,
raising awareness includes providing certain information
about users’ rights in an understandable and clear form.
It seems reasonable to assume that only then will users be
able to exercise their rights regarding control of their data.
Legal regulation could state that the execution of rights
should be possible electronically, allowing execution to be
unimpeded and free of charge, and avoiding cross-media
conversion.277 Since an OSN user in many cases cannot
know who receives personal information, withdrawal of
consent could commit the recipient of the consent and
the withdrawal to forward the withdrawal to all known
recipients.278 Also, the initial withdrawal could legally
bind all further recipients; also with reference to inferred
or processed data.
In terms of e-commerce, this option does not seem to apply
to the data strictly necessary to conduct business, but does
seem applicable to other (derived) data.

81
279 Enquete-Kommission 2012: Fünfter Zwischenbericht der Enquete-Kommission 2012, p. 54.
280 European Commission 2012: The EU-Commission Draft for a General Data Protection Regulation would follow this approach in Art. 3.2.
281 Roßnagel et al. 2001, p. 177.
282 Enquete-Kommission 2012, p. 55.
National borders
General provisions might consider applicable national data
protection regulations which may not be determined by the
location of the OSN server but rather by the location of the
user.279 In this way, users would always be able to know
which regulations apply to the processing of their personal
information. Thus, they could decide whether they want
to proceed, based on the knowledge of what information
may be legitimately processed and what rights they would
possess. However, the problem of enforcement of the ap-
plicable (national) law if the OSN provider has registered
the office outside of the jurisdiction remains.The same con-
siderations apply to e-commerce.
Correction, blocking, deletion
Control over one’s data includes the possibility to delete
this data. Some legal regulations oblige providers to delete
user data upon request (instead of hiding it from view and
storing it anyway). Clear technical definitions of “deletion”
are required. Users could be entitled to automatically re-
ceive a confirmation that data was deleted successfully.280
It should be noted, however, that the deletion obligation
would be limited to the sphere of the OSN or the service
provider but would not ensure a successful deletion of data
in the World Wide Web.
Current regulations do provide certain rights for users, es-
pecially in regard to correction, blocking, or deletion, e.g.,
Art. 12 DPD or § 35 BDSG. Especially on the Internet,
however and here especially in OSNs, it is hard to enforce
these rights if the provider does not comply with current
legislation. Imposed sanctions could raise the willingness
to comply with current data protection standards, as could
incentives like certificates for providers which could be used
as marketing tools. Both will be explained below.The same
considerations apply to e-commerce.
Expiration
In order to implement data minimisation and user control,
it is possible from a regulatory perspective to dictate expira-
tion dates for personal data, including photos.281 The same
considerations apply to e-commerce.
6.2.2 Technical Options for Control
In this section, we address OSN-specific technologies only.
As service providers, OSN providers can of course deploy
additional, non-OSN specific, server-side mechanisms (e.g.
provenance tracking, usage control) that would help en-
force privacy requirements.
Privacy-friendly default configurations and settings
The first technical option for improved user control in OSNs
is to provide privacy settings for user profiles that provide
a high degree of privacy by default. Privacy settings would
need to be intuitive, making it even easier for average users
to set their preferences regarding the handling (how, when
– expiration dates – and by whom) of their personal data
or to make changes that would reflect their privacy prefer-
ences and needs. In order to achieve this goal, if they do not
already do so, OSN service providers may want to consider
usability from the outset as one of their functional require-
ments (privacy-by-design).282 This implies involving users (or
research participants) and their feedback in the engineering
process of their privacy-setting models. One possible area
of improvement for privacy settings within user profiles is
to design them in a way that would make the user’s prior
consent a requirement for tagging that person in a photo
or a video (which already is implemented in several OSNs).
Furthermore, profile privacy settings are to be designed in a
way that would allow user control not only over direct but
also over downstream use of their data, e.g., possibly inferred

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283 European Commission 2012.
284 Google 2012.
285 Ghiglieri et al. 2012.
286 Waidner et al. 2011, pp. 1-20.
287 Acquisti 2009, pp. 82-85.
or aggregated data that may be shared with advertisers. User
preference models could be designed in a way that the cus-
tomer or trusted entities are able to verify that the prefer-
ences were not bypassed. In addition, user preference mod-
els could enable messaging controls, i.e., ensuring that only
friends can send and receive messages (that comply with
their preferences) between each other. This is also already
partially implemented by some OSNs.
The same considerations apply to e-commerce. Once more,
the distinction between data strictly necessary to conduct
business between customer and seller and relevant inter-
mediaries, and data that is not strictly necessary is relevant
here: Default privacy settings seem particularly relevant for
the latter because they are usually implicitly collected.
Note that an implementation of this option in OSNs would
give users effective control over their reputation and their
digital self-representation. Indeed, providing the OSN users
with specific, detailed choices about the processing (collec-
tion, use and sharing) of personal data would enable them
to regulate information about themselves on the OSN, sup-
port informed and selective disclosure of intimate details,
and allow them to counter and correct misinformation.
Leverage transparency tools
The second option to achieve customer empowerment is
to leverage existing transparency and awareness tools and
technologies and build OSN-specific privacy feedback and
awareness (PFA) solutions. PFA tools can be based on the
TET tools discussed above (remember that these help in-
crease OSN users’ awareness of the kinds of information
they have shared or are about to share as well as the possi-
ble privacy implications). In addition, and more specifically,
they would provide more possibilities for users’ control by
allowing them to react to the information they are provided:
seeing what is happening does not always automatically
mean one knows how to react to this information.
The same APIs as discussed in the context of TETs for aware-
ness could also be used to empower OSN users to rectify
and/or delete pieces of their personal data held by the OSN
provider. A prominent example of a provider-side dashboard
is the Google Dashboard283. It allows Google service users
to access a summary of data associated with their Google
Accounts. In order to move beyond the current state and ad-
dress some of the limitations of existing TETs284, 285 there still
seems to be room for improvement in terms of usability Cur-
rent dashboards do not consider the handling of derived data
(e.g., the “strength” of links between people as measured by
the number of messages exchanged in-between them).
Further examples of control exercised by users include hid-
ing their data, i.e. by not uploading it, encrypting it, setting
restrictive profile privacy setting rules, or deleting it from
OSN provider servers. When deployed on the user side, PFA
would put the users in control and help them prevent inad-
vertent disclosure of private data. They could provide real-
time reminders, e.g. in the form of short on-screen messages,
indicating that the information the user is about to share
can be potentially sensitive personal data and that this may
carry some privacy risks down the road. The underlying con-
cept here is the notion of “privacy nudges”286, 287 with the
acknowledged risk of patronising users. By leveraging ma-
chine learning techniques and models from the field of be-
havioural economics, such solutions could nudge users par-
ticipating in online networking activities in ways that they
would consider beneficial for the protection of their privacy.
The same considerations apply to e-commerce, particularly
so for data that is not strictly necessary to execute the
business at hand.

83
288 Kelley et al. 2010, pp. 1573-1582.
289 van den Berg 2010, pp. 1111-1116.
290 Rahman et al. 2010, pp. 41-48.
291 Lipford et al. 2008.
292 Madejski et al. 2011.
293 Weiss 2008, pp. 161-171.
294 Lipford et al. 2008.
295 Fang/LeFevre 2010, pp. 351-360.
296 van den Berg 2010, pp. 1111-1116.
297 Rahman et al. 2010, pp. 41-48.
298 Kumari et al. 2011, pp. 85-96.
299 Lovat/Pretschner 2011, pp. 151-152.
Data minimisation
A third option to enhance user control in OSNs is to provide
them with the means to regulate the amount of personal in-
formation they release when registering for, accessing, con-
suming or terminating an online social networking service.
This can be achieved by implementing and using 1) data
minimisation technologies, 2) privacy-dedicated credential
and identity management models that take group and indi-
viduals’ levels of trust into account and allow (dynamic) pol-
icy negotiation, and 3) decentralized architecture models
for computing and data management. Data minimisation,
for instance, may include offering users the option to cre-
ate and use revocable anonymous profiles, and/or browser
extensions that would help to prevent unauthorized access
to OSN users’ content by encrypting those files before up-
loading or sharing them on the OSN platform. On the other
hand, an implementation of identity management (IdM)
models and standards in an OSN ecosystem would allow
OSN users to (jointly) manage both the context-dependent
disclosure of certain personal data and the accessibility to
that information, e.g. to make selected identity information
visible only to a selected audience. This way, IdM may help
users to define and enforce their audience and context
segregation policies on OSNs.288, 289, 290 Moreover, such an
integration of user-centric identity management concepts
into OSNs may create a situation where OSN service pro-
viders could easily accommodate users’ privacy preferenc-
es, and thus be able to work with minimal personal data.
However, researchers have pointed out that current iden-
tity and access control systems may need to be readjusted
when applied to OSNs291, 292. In an attempt to improve that
situation, privacy researchers have proposed privacy mecha-
nisms (e.g. Lipford’s Privacy Mirror293 and LeFevre’s Privacy
Wizard294) that extend the set of features already provided
by existing social network platforms and/or design entirely
new OSN architecture supporting identity management
(e.g. Primelife Clique295, PCO296). The concepts that have
been proposed to help users manage their audiences, con-
tacts, and other personal information is very similar to the
Google+ circles which are meant to mimic the offline social
practice of audience segregation, online. Another aspect
of this option is to let OSN users have control over down-
stream use of certain pieces of their data, e.g., by setting
and enforcing purpose constraints for third party applica-
tion providers. Concepts and technologies that can support
this aspect include opting out of online behavioural track-
ing via Opt-out Cookies, Do Not Track options built into web
browsers and usage control frameworks297, 298, 299.
These considerations should be viewed in the context of
Web 2.0 where interactions with an OSN do not necessarily
happen on the OSN provider’s side (e.g., +1 or like buttons).
The same considerations apply to e-commerce, particularly
so for data that is not strictly necessary to execute business.
Portability
The fourth technical option for increased user control in
the context of OSNs is to provide users with means to
exercise their right to data portability. To free users from

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Internet Privacy
300 Pretschner et al. 2011, pp. 122-140.
301 Kalabis 2012, pp. 670-675.
302 Druschel et al. 2011.
de facto lock-ins and to thus enable informational self-
determination, OSN sites could implement and provide
free access to application programming interfaces that
can enable OSN users to transfer their (profile) data be-
tween different social network platforms while simultane-
ously maintaining privacy protection. In order to prevent a
situation where one single OSN provider would be able to
diminish the autonomy and personal choice of users, any
meaningful tool for supporting users’ right to data port-
ability would have to rely on open standards and interop-
erable IT technologies. The current draft of the EU Com-
mission General Data Protection Regulation also adopts
the right to data portability in Art. 18.2 a. This option
does not seem to apply to e-commerce.
A related control option that applies to e-commerce, is a
technical implementation of the “right to be forgotten.”
This privacy right is a centrepiece of the European data
protection framework proposed in 2011. The notion of
“right to be forgotten” aims at addressing privacy-related
threats emerging in digital ecosystems (which OSNs are
examples thereof) due to data persistence. Indeed, data
persistence makes it hard for OSN users to interact with
each other (e.g. express controversial thoughts) , without
the threat of being unable to escape their past since easily
reproducible details of these interactions may continue to
live “forever” somewhere in the cloud. Hence a meaning-
ful option is to provide OSN user with simple, easy to use
yet effective tools for permanent and complete account
deletion. Recently300, ENISA overviewed the state of ex-
isting techniques for expiration of data.301 Unfortunately,
none of these techniques provide strong guarantees with
regard to an enforcement of the right to be forgotten in
scenarios such as OSNs and e-commerce. ENISA points out
the fact that the right to be forgotten cannot be ensured
solely by relying on technology, and also highlighted a
number of research gaps.
6.2.3 Educational Measures Regarding
Control
Educational measures that address the understanding of
an OSN’s structures, concepts, policies, rights, and obliga-
tions have been discussed in terms of educational meas-
ures regarding awareness. Such knowledge about what is
happening needs to be complemented by knowledge about
how to possibly change the course of action. This kind of
media literacy can be seen as a further cornerstone. Again,
we will proceed by specifying relevant target groups, con-
tents, and methods.
Relevant actor
Educational measures geared toward increasing the level
of user control have a natural focus on users themselves,
those teaching them, and those shaping the interactive
structures in question:302 students at school, students at-
tending university, apprentices, teaching staff/educators at
regular and professional schools, providers’ staff (first and
third party, e.g. app providers).
Note that the first three groups are the actual target, with
the fourth group serving a multiplier function, and the fifth
participating in the development of privacy-friendly prac-
tices on the providers’ side.
Content of control increasing activity
Controlling the flow of information in OSNs appears pos-
sible only when considering diverse components: norms,
policies, and skills.
Informational norms duties
As privacy is an inherently social, i.e., collective phenom-
enon, the social groups using OSNs need to be aware of
the fact that they can only maintain the privacy of all the
group’s members as well as that of the group as a whole if

85
303 Enquete-Kommission 2012, pp. 20-31. We restrict the listing to those groups that are empirically the heaviest users of OSNs (thus, we do not
include pre-school children and seniors, who might make use of the Internet, but who are usually not very active on OSNs).
304 Tor 2013.
305 Ghostery 2012.
306 Mozilla 2012.
they agree to negotiate informational norms that are bind-
ing for everyone. For instance, to protect the privacy of all
the users concerned, a peer group might specify that photos
may only be uploaded after consulting all the people being
shown in the picture. Once the norm is established, it is pos-
sible to demand that others adhere to it: social control may
be executed in ways that sanction specific practices. On the
providers’ side, norms may contribute to the development
of best practice standards within the industry. As they gain
more and more relevance, engaging clients, such as third
party app providers, in awareness-raising activities also is
an option.
Understanding and formulating policies
In order to make privacy policies beneficial to the users,
the latter may need to be able to use the technical features
implementing those policies to full capacity. This would re-
quire an increase in user skills: 1) users need to have a clear
understanding of their own privacy preferences, 2) of the
way those preferences are affected by the technical work-
ings of OSNs, and 3) of the technical features that are suit-
able to shape the flow of information in a way that matches
their privacy preferences. In other words, users need to have
the necessary competencies to translate privacy preferences
into privacy settings and practices, vis-à-vis other users as
well as providers and third parties.
Developing increasing skills
In order to stay in control as much as possible, one needs to
comprehend the – often difficult to understand and hard to
use (see 5.2.2) – privacy settings of particular OSNs. At the
core are questions like: what kind of information becomes
accessible to which party (other users, provider, third parties)
under what conditions? How to control the visibility of the
personal information fed into the network: how to give/can-
cel consent for collection, processing, disclosure of data for
app providers (or other third parties)? How to move, modify,
and delete (if possible) data? How to determine the visibility
of data to whom, and for how long? How to segregate dif-
ferent audiences? How to determine retention time? As re-
identification and tracking technologies have the potential
to violate privacy preferences (see 5.1.2 and 5.2.2), the distri-
bution of techniques fending off tracking and guaranteeing
anonymity might also be desirable. In this regard, easy-to-use
applications and add-ons, such as Tor303, Ghostery304, or Moz-
illa’s Better Privacy305 could be included in training content.
This way, users’ room to maneuver could be enlarged, for
awareness and skills once acquired are likely to remain and
to be put to new contexts by users.306
Control training methods
There are three ways to increase control on the users’ side
via education: training in school, self-education, or with pro-
viders’ support.
Training in school
Again, there are several options how to configure teaching
in school (new required subject, collective self-education,
etc.). As they have been already discussed above, we will
not elaborate on that at this point.
Self educating tutorials
An alternative to the dissemination of skills at school
would be to develop self-education tools, privacy tutori-
als, technical means (demonstrations, videos) and the like,
tailored to specific user groups. However, the usage of
such tools would require extra effort by the users, the only
incentive being a current absence of potential damage
in the future. While an appropriate solution for individ-
ually-motivated users, others would have to be “nudged”
to concern themselves with these tools. In other words,
a soft paternalism strategy that encompasses“nudging

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Internet Privacy
307 boyd/Hargittai 2010.
308 Acquisti 2009, pp. 82-85.
309 Hornung 2011, p. 53.
privacy”307 could turn out to be a viable option to make
users successfully complete privacy tutorials (e.g., making
it mandatory to complete a privacy tutorial before grant-
ing users permission to register in an OSN; we omit dis-
cussing the ethical implications such paternalism raises).
Educating providers’ staff
As stated above, the providers can play a role in strengthen-
ing user control; this might be achieved by developing and
implementing norms guiding providers’ staff behaviour. Such
norms might be translated into formalized terms of service,
for instance, by being formulated in a consolidated, clear
and understandable way. To this end, systematic education
of OSNs’ staff and management, as well as the development
and promotion of (internally) good privacy practices in work-
place could be desirable. This could be acquired by accom-
plishing privacy-awareness training presentations, providing
videos, FAQs about privacy policies and practices, etc.
The same considerations apply to e-commerce, particularly so
for data that is not strictly necessary to execute the business.
6.3 Trustworthiness
While awareness, transparency and control are essential for
improving privacy in OSNs, it is also necessary to improve
users’ trust of each other (establishment and management
of trustworthy user relationships within OSNs) as well as
the trustworthiness of the OSN providers’ data processing
practices.
6.3.1 Trustworthiness by Regulation and
Rules
Trustworthiness of providers in relation to data processing,
disclosure, purpose and context binding, safety of data and
data minimisation could be regulated via two different ap-
proaches. The first one would impose duties on OSN pro-
viders, and the second one would promote trustworthiness
by rewarding good conduct and behaviour. Also, general
provisions could be considered in order to create a homoge-
neous set of rules.
Stricter fines, consequences
To further increase awareness among providers concerning
the importance of different privacy principles and encour-
age providers to comply with privacy regulations, stricter
fines, penalties and other consequences could be imposed.
Those general principles would protect personal data, avoid
data retention where possible and include the principles
of purpose, necessity and data avoidance or minimisation.
They therefore address our conditions and threats. They
are already codified in European and German regulations.
However, their breach is rarely directly connected to any
consequences for the responsible entity. Specifically, the
principles of data minimisation and avoidance are not con-
nected to any rules of infringement and therefore raise no
consequences in case of a breach.308
Breaking up monopolies
In the case that monopolies are identified, the resulting
and underlying lock-in has the immediate potential to
lead to all privacy threats discussed in this document. One
option is to forbid and dissolve such monopolies.
Competitors’ complaints
To enforce higher-level privacy standards between business-
es one could consider competitors’ complaints so that data
breaches would be considered unfair competition or abuse
of market position. Providers would be encouraged to fulfil
privacy regulations or face consequential lawsuits and, pos-
sibly, fines.309 Private institutions could enforce omissions
of unfair competition and begin legal actions when neces-
sary. This is, in fact, codified in specific consumer protection

87
310 Roßnagel et al. 2001, p. 203.
311 Roßnagel et al. 2001, p. 204.
312 The EU-Commission Draft for a General Data Protection Regulation contains numerous delegated acts which empower the Commission to
adopt non-legislative acts of general application to supplement or amend certain non-essential elements of a legislative act (quasi-legislative
acts).
313 The EU-Commission Draft for a General Data Protection Regulation would establish comparable approaches in Art. 8.1.2.
314 Roßnagel et al. 2001, p. 182.
315 Roßnagel 2007, p. 196.
316 Roßnagel et al. 2001, pp. 189,195.
regulations already, and could be extended to data protec-
tion regulations in general.310
Specifications
Guidelines and specifications could be issued by data pro-
tection authorities.311 Regulations about terms and condi-
tions of service are generally consumer-friendly. However,
there is still room for improvement. To ensure a high level of
privacy, terms of service could be tightened to leave manu-
facturers (who design the services or technical means to
use them) and providers little or no margin to deviate from
consumer-friendly regulations.
Protection of minors
To raise the level of trust regarding the protection of minors,
age verification systems and systems for parental consent
could become obligatory where minors are expected to
have access to the service.312 Legal regulation in this respect
appears extensive and cohesive. However, it still lacks tech-
nical implementation in online services.
Intangible damages and strict liability
The tort system for data protection breaches by private
entities could be expanded to encompass intangible dam-
ages, e.g. emotional distress after severe violation of one’s
right to privacy313. Also, the liability regime could be trans-
formed into a strict liability in tort.314 This kind of a tort
system would empower users to achieve compensation for
damages effectively, and thus possibly discourage breaches
on the part of the providers. Providers would be liable for
any breach of data protection regulation without proof of
responsibility, unless they can sufficiently prove that they
have fulfilled every rule that they were obligated to by law.
Escalation
Acknowledging that the innovation curve in the Internet is
steep and that services are often developed in close collabo-
ration with the user, differences arising around the proper
handling of data and compliance with the rules and privacy
regimes may be escalated to mediation or alternative dis-
pute resolution bodies.
Strengthening independent authorities
The organisation and standing of independent (privacy)
authorities could be strengthened. Independent data pro-
tection authorities are one way to maintain a high level
of privacy standards and are established in current regula-
tions. Furthermore, the different functional responsibilities
of public data protection authorities, e.g., private/public
and federal/state as well as state/state, may turn out to be
more effective if coordinated centrally. They could be grant-
ed more extensive rights, especially the right to give bind-
ing instructions based on the law.315 Private data protection
authorities’ powers and responsibilities could also be
strengthened and their independence from their inspection
body could be enforced. That is especially important where
they may be impeded from consulting higher authorities
out of fear of repression, thus it is important to improve
their contractual rights and protect them from termination
of their employment.316
Basic points for privacy by design
Privacy by design aims at integrating data protection stand-
ards into services and products from the start, above all
by high-standard privacy settings by default. Basic points
for Privacy by design might be laid down in legal specifica-
tions, for example: which general privacy principles could

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Internet Privacy
317 Roßnagel et al. 2001, p. 198.
318 Enquete-Kommission 2012, p. 54.
319 TRUSTe 2013.
320 Europrise 2013.
321 Better Business Bureau 2013.
322 Trust Services 2013.
and should be furthered by services and technology and
who should be held to implement such technical privacy
standards (manufacturers/service providers). Concrete solu-
tions for these basic points might, however better be left to
technical developers.
Audits, certificates, privacy seals
Audit processes and certificates could enable users to assess
the privacy-friendliness of their OSN of choice. This would of
course also require awareness of the certification processes
itself, the baselines against which certification takes place,
and of the respective guarantees from the users’ perspec-
tive. In order to make it easier for users and providers to
assess the quality of certificates, different national or Eu-
ropean initiatives could be integrated under one brand.317
It seems possible to make the use of privacy and security
seals by OSN providers mandatory (but the following trea-
tise is independent of whether these seals are required or
used as marketing tools, similar to the seals of German
“Stiftung Warentest”). The key idea behind these privacy
seals is that IT-based services’ compliance with privacy
standards and data protection regulations can be certi-
fied and reliably signaled to consumers, which, however,
does not allow for relevant end-user consequences such as
“my data will never be lost”. The certification as well as
the issuing of seals is ideally performed by an independ-
ent organisation. The respective privacy requirements and
standards typically oblige providers to disclose informa-
tion about what personal data they collect, how and for
what purpose that data will be processed and/or further
shared, and possible control options the user has. This
way, privacy seals could help increase transparency with
regard to how data controllers (i.e. website operators)
handle personal information and subsequently enhance
users’ trust and confidence on the Internet. When visiting
a website that has been certified, i.e. that displays a pri-
vacy seal, and based on the details the provider discloses,
users should be able to make informed decisions about
whether or not to reveal their personal data to the website
(even though this possibly would require the provision-
ing of end-user guarantees of the abovementioned kind,
which is usually not the case). In the context of OSNs, pri-
vacy seals could be used to send clear signals to the (pro-
spective) users, indicating that the OSN provider adheres
to certain security and privacy standards, e.g. ISO 27001,
and that users’ data would be collected and processed
accordingly. Facebook and Google+ are both licensees
of the commercial TRUSTe Privacy Program318. However,
other privacy and security seals issued by programs such
as EuroPriSe (European Privacy Seal319), BBBOnLine320 or
WebTrust321 are rarely used in the context of OSNs, at least
not by popular social networking sites. In Germany there
already exists a privacy seal provided by the data protec-
tion authority of the German state Schleswig-Holstein322,
and there is the currently planned “Stiftung Datenschutz”.
The unification of this multiplicity of seals is another op-
tion to improve privacy in OSNs, also considering that
services are often provided worldwide, the relevance of a
European or German seal is limited.
Self-regulation
Self-regulation aims at committing companies, providers
etc. to complying with self-imposed rules. In order to es-
tablish binding and reliable rules of data protection, basic
ground rules by the legislator could provide the opportu-
nity to be concretised and extended by joint agreements
between companies and consumer associations. Among
other things, self-regulation could be applied to defin-
ing the necessity of collecting different data for different

89
323 Independent Centre for Privacy Protection Schleswig-Holstein 2013.
324 Roßnagel et al. 2001, p. 153.
325 Proposed by the European Commission 2012.
326 The current scholarly and political discussion shows that while the regulation brings about some improvement, on the whole there are many
issues that need to be re-evaluated: Hornung 2012, p. 99; Masing 2012, p. 2305; Nebel/Richter 2012, p. 407; Eckhardt 2012, p. 195; Roßnagel
2012, p. 553; Masing 2012, p. 9 (and many more). Regarding the hearing in the German Bundestag on 22 October 2012: Krempl 2012.
purposes; to procedures of realizing anonymization and
pseudonymization;to trade-specific rules of informing
usersabout data retention procedures and necessary
rules of safety measures; and expiration dates for personal
data. Incentives may be necessary to for the development
of self-regulations. To guarantee that self-regulations are
reviewed in regular intervals and still provide sufficient
protection for personal data, an expiration date could be
established.323
International regulation
Cross-border issues, especially which law is applicable
and where and how to enforce users’ rights, can be ad-
dressed by either self-regulation or international binding
legislation. Although unification is taking place today, a
worldwide data protection law is not yet in sight, and on
an international level, self-regulation alone is not likely to
be sufficient.
A first step in international legislation has been taken
within the European Union. The Data Protection Directive
95/46/EC has been amended several times and provides
ground rules concerning data retention for each member
state to be transposed into national law, but at the same
time leaving the national legislator room to maneuver,
and to establish more detailed and stricter rules. The new
Draft of General Data Protection Regulation324 will provide
binding rules for each member state without the need or
possibility for transposition. While the specific realisation
of that regulation has been widely and controversially dis-
cussed,325 the idea of establishing a general rule for all
European countries – by way of directive or regulation –
naturally is one option.
All these considerations also apply to e-commerce.
6.3.2 Technical Options regarding
Trustworthiness
Trustworthy OSN ecosystems rely on (1) trust between one
OSN user and another (2) trust between users and providers.
Cooperative behaviour, User-Centric/Community-Centric
Identity Management
This can be achieved by deploying technologies that pro-
mote cooperative behaviour checking and by effective
controls and identity management. For example, these
technologies used in conjunction with information from
the social graph could help OSN users to assess the level
of trust within their communities, so as to figure out if a
friendship request is trustworthy or more generally to de-
cide whom they should trust when entering new virtual
friendships or consuming third party online social network-
ing services. By leveraging feedback and recommendations
by other users (friends and contacts), cooperative behav-
iour checking tools would provide OSN users with means
to judge a stranger with whom they are about to establish
a relationship, and quantitatively assess potential risks, in
terms of unintended disclosure of private information, of
befriending that stranger.
Trust but verify: Trustworthiness of OSN provider
A second option to enhance trustworthiness in OSNs is to
allow users to assess the trustworthiness being offered by
the OSN provider and enable automatic verification of pro-
vider compliance with both privacy regulatory requirements
and users’ data handling preferences. This approach could
help address some of the limitations of current “static”
certification methodologies that relate to the structure of
organisations and their IT326 information security. Existing

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Internet Privacy
certification methodologies may be proved insufficient
when applied to OSN systems that meld various kinds of
services, hosted in dynamic environments. An implemen-
tation of automated security assurance and compliance
tools would provide not only individual users but also
organisations with compliance responsibilities and data
protection authorities the ability to remotely and quickly
confirm whether the OSN provider’s platform and back-end
system are secure (to an extent to be defined) and that the
obligations with regard to the handling of personal data
are being carried out. Technical options here include data
provenance tracking and trustworthy logging tools for au-
dits. It needs to be taken into account that if usage of data
is tracked, this may lead to second-level privacy issues: the
new data creates new privacy challenges.
6.3.3 Educational Measures Regarding
Trustworthiness
Generating trustworthiness is primarily a matter of legisla-
tion and technology (establishing a widely accepted seal
is not a user’s core business), with educational measures
being mainly associated with the acknowledgment of trust-
creating mechanisms.
Relevant actors
In this respect, educational measures pertain primarily to
two target groups: users and providers.
While users need to be made aware of mechanisms, such as
seals, and are also required to be able to honor the effort
providers make in order to create trust, providers are bound
to take measures that make them deserve trust.
Content of Activities Increasing Trustworthiness
Trustworthiness can be improved if users are empowered
to detect and understand if their privacy preferences are
indeed respected by a given provider. This requires three
areas of practical knowledge
1. How to monitor the information fed into the network
(e.g. how to download a copy of the divulged data)
2. How to use some OSN internal features or some stand-
alone software tool allowing to check whether the pri-
vacy settings do indeed match the privacy preferences
3. Understanding of certification processes that is suf-
ficient to assess which user guarantees are effectively
provided
In addition, users are likely to need knowledge of the cru-
cial issues concerning trustworthiness (see Section 5.1.3)
such as collecting, processing, disclosing regulations; pur-
pose and context binding; data minimisation; anonymiza-
tion; and OSN security. Providers’ staff could be required to
be trained in trust building activities.
Trust Building Training Methods
It is possible to create the capability of users to realis-
tically assess the trustworthiness of individual OSNs via
training in schools, universities and tutorials. However,
increasing trust in OSN providers could be achieved by
establishing trustworthiness standards and training pro-
viders’ staff accordingly.
6.4. Conclusion
In Chapter 5, we have abstractly argued how the implemen-
tation of the core values of informational self-determination,
democratic participation and economic well-being can (1)
be enabled by the three conditions of awareness, control,

91
327 acatech 2013.
and trustworthiness and (2) be impeded by the threats of
decontextualization, persistence, and re-identification.
In this chapter, we concretised these considerations by pro-
viding options for action in terms of regulations and rules,
technology, and education. We are convinced that a culture
of privacy and trust relies on a combination of approaches
from these domains.
We have formulated the options mainly in terms of OSNs.
This is because the options largely overlap, as spelled out in
the introductory remarks of this section. Where applicable,
we have indicated relevant differences. A major distinction
is made between data that is strictly necessary to execute a
business transaction (product ID, bank account, shipping ad-
dress) and every other (derived) data, e.g., browsing behaviour
on broker platforms, clicks on ads, etc. We would like to re-
emphasize that recommendation platforms for e-commerce
provide hints at a convergence of these two technologies.
In terms of regulations, we identified only a few options that
are bound to awareness where OSN providers (or e-commerce
actors) could be encouraged to unveil specific parts of their
inner workings, including their approaches to processing and
dissemination of (possibly derived) data, while at the same
time making sure that this unveiled data can be understood
and processed by the recipients. This is because the respec-
tive regulatory body is already rather comprehensive – but as
of yet arguably lacks enforcement. In terms of control, how-
ever, regulations could mainly require privacy-friendly default
settings and dashboards through which deletion requests,
for instance, could be issued. As far as trustworthiness is
concerned, privacy seals open up an entire range of options,
where user- friendliness could be improved by avoiding the
existence of innumerable seals.
In terms of technology, awareness can be increased by sev-
eral existing transparency enhancing tools, including dash-
boards. We have made a distinction between server-side
and client-side mechanisms, where the former seem par-
ticularly relevant when data provenance is to be provided
upon inquiry. These technical options can – and today
sometimes are – also be used for issuing privacy-related
commands to an OSN (or e-commerce platform). Verifica-
tion that the displayed data corresponds to reality and that
the issued commands are actually executed needs to be
enforced by further means and is the subject of technology
for complementary auditing approaches to trustworthiness.
Note again that also in these parts of the document, we
have deliberately restricted ourselves to technology that is
directly concerned with OSNs (trustworthy logging capa-
bilities by providers, for instance, transcend the domain of
OSNs and, specifically, also apply to e-commerce).
In terms of education, roughly understanding (1) privacy
concepts, abstract and concrete risks as well as conse-
quences of providing data, preferences, and the technology
behind OSNs (and Web 2.0 and e-commerce players), stake-
holder motivations and (2) understanding the medium of
OSNs and the navigation in OSNs (in e-commerce) is bound
to awareness. This includes the communication between
users and the OSN as well as the communication between
one OSN user and another. Media competence in terms of
understanding what privacy policy settings actually mean
(and what they do not mean) provides means for control. As
far as trustworthiness is concerned, a basic understanding
of certification for law or privacy seals and the actualisation
of provided guarantees seems bound to establish trust in
the context of OSNs.
We have indicated how each of these options potentially
addresses one of the three threats identified in Chapter 5.
We have deliberately not provided any recommendations
in this chapter. There are multiple trade-offs between prac-
ticality, usability, economic feasibility, etc. that need to be
addressed before such recommendations can be provided.
This is the subject of the acatech POSITION327.

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Internet Privacy
THE FOLLOWING VOLUMES HAVE BEEN PUBLISHED IN THE SERIES “acatech STUDy“ and “acatech REPORTS AND
RECOMMENDS” UP TO NOW:
Albers, A./Denkena, B./Matthiesen, S. (Ed.): Faszination Konstruktion. Berufsbild und Tätigkeitsfeld im Wandel (acatech
STUDIE), Heidelberg et al.: Springer Verlag 2012.
Buchmann, J. (Ed.): Internet Privacy. Eine multidisziplinäre Bestandsaufnahme / A multidisciplinary analysis (acatech STUD-
IE), Heidelberg et al.: Springer Verlag 2012.
Geisberger, E./Broy, M. (Ed.): agendaCPS – Integrierte Forschungsagenda Cyber-Physical Systems (acatech STUDIE), Hei-
delberg et al.: Springer Verlag 2012.
Spath, D./Walter, A. (Ed.): Mehr Innovationen für Deutschland. Wie Inkubatoren akademische Hightech-Ausgründungen
besser fördern können (acatech STUDIE), Heidelberg et al.: Springer Verlag 2012.
Hüttl, R. F./Bens, O. (Ed.): Georessource Wasser – Herausforderung Globaler Wandel. Beiträge zu einer integrierten Wasser
ressourcenbewirtschaftung in Deutschland (acatech STUDIE), Heidelberg et al.: Springer Verlag 2012.
Appelrath, H.-J./Kagermann, H./Mayer, C. (Ed.): Future Energy Grid. Migrationspfade ins Internet der Energie (acatech STUD-
IE), Heidelberg et al.: Springer Verlag 2012. Auch in Englisch erhältlich (als pdf) über www.acatech.de
acatech (Ed.): Organische Elektronik in Deutschland (acatech BERICHTET UND EMPFIEHLT, Nr. 6), Heidelberg et al.: Spring-
er Verlag 2011. Auch in Englisch erhältlich (als pdf) über www.acatech.de
Federspiel, R./Salem, S.: Der Weg zur Deutschen Akademie der Technikwissenschaften. Heidelberg et al.: Springer-Verlag 2011.
acatech (Ed.): Monitoring von Motivationskonzepten für den Techniknachwuchs. (acatech BERICHTET UND EMPFIEHLT,
Nr. 5), Heidelberg et al.: Springer Verlag 2011.
acatech (Ed.): Wirtschaftliche Entwicklung von Ausgründungen aus außeruniversitären Forschungseinrichtungen (acatech
BERICHTET UND EMPFIEHLT, Nr. 4), Heidelberg et al.: Springer Verlag 2010.
acatech (Ed.): Empfehlungen zur Zukunft der Ingenieurpromotion. Wege zur weiteren Verbesserung und Stärkung der Promotion
in den Ingenieurwissenschaften an Universitäten in Deutschland (acatech BERICHTET UND EMPFIEHLT, Nr. 3), Stuttgart: Fraun-
hofer IRB Verlag 2008. Aktualisierte Kurzfassung (2012) auch in Englisch erhältlich (als pdf) über www.acatech.de

111
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Federspiel, R./Salem, S.: Zur Gründungsgeschichte der Deutschen Akademie der Technikwissenschaften, Stuttgart: Fraunhofer
IRB Verlag 2007.
acatech (Ed.): Bachelor- und Masterstudiengänge in den Ingenieurwissenschaften. Die neue Herausforderung für Technische
Hochschulen und Universitäten (acatech BERICHTET UND EMPFIEHLT, Nr. 2), Stuttgart: Fraunhofer IRB Verlag 2006.
acatech (Ed.): Mobilität 2020. Perspektiven für den Verkehr von morgen, Schwerpunkt Straßen- und Schienenverkehr (acatech
BERICHTET UND EMPFIEHLT, Nr. 1), Stuttgart: Fraunhofer IRB Verlag 2006.

Future Energy Grid
acatech – NATIONAL ACADEMY OF SCIENCE AND ENGINEERING
acatech represents the German scientific and technological communities, at
home and abroad. It is autonomous, independent and a non-profit organisa-
tion. As a working academic institution, acatech supports politics and society,
providing qualified technical evaluations and forward-looking recommenda-
tions. Moreover, acatech resolves to facilitate knowledge transfer between sci-
ence and industry, and to encourage the next generation of engineers. The
Academy counts a number of eminent scientists from universities, research
institutes and companies among its Members. acatech receives institutional
funding from the national and state governments along with third-party dona-
tions and funding for specific projects. It organises symposiums, forums, panel
discussions and workshops to promote new technologies in Germany and to
demonstrate their potential for industry and society. acatech publishes studies,
recommendations and statements for the general public. The Academy is com-
posed of three bodies, the Members, organised in the General Assembly, the
Senate, whose well-known figures from the worlds of science, industry and poli-
tics advise acatech on strategic issues and ensure dialogue with industry and
other scientific organisations in Germany, and the Executive Board, which is ap-
pointed by the Members of the Academy and the Senate, and which guides the
work of the Academy. acatech’s head office is located in Munich while offices
are also maintained in the capital, Berlin, and in Brussels.
For more information, please see www.acatech.de

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