Play Your Cards Right: Utilizing Differential Privacy as a Competitive Advantage

Given the increasing amount of information being leveraged in business models, a growing number of companies have adopted differential privacy (DP) as a means of ensuring privacy. DP enables the adjustment of privacy characteristics of individual information. Nevertheless, measurements taken rarely lead to total prevention of information loss due to external events, i.e., data breaches. Owing to the control nature of DP, we argue that even in the occurrence of a data breach, investments made in this technology can be strategically exploited to positively influence perceived information privacy control. Drawing on prior literature, we propose a relationship between customers’ information privacy control and satisfaction. By conducting a between-subjects experiment (n=185), we can confirm these assumptions. Our paper paves the way for the disclosure of privacy measures, in particular DP, to enable a more positive reaction of customers towards data breaches, thus creating competitive advantages.