On The Willingness To Pay For Privacy As A Freemium Model: First Empirical Evidence

The monetizing of internet users’ personal information has become a very popular revenue source in the Web 2.0 age. Although users commonly accept the commercialization of their personal information in exchange for using services free of charge, this can lead to privacy concerns. Previous studies have investigated consumers’ willingness to pay for privacy protection. It has been shown that some internet users are unwilling to pay for privacy, while others are willing to do so, but only a few cents. A new approach focuses on offering privacy-enhancing technologies in the form of a Freemium model, which gives users the ability to use the free version of a service – as is usual – or to receive additional privacy control functionalities through a premium version in return for a monthly fee. We investigated the willingness to pay for the premium version, using the example of Facebook as well as Google. In a web-based survey, 160 German-speaking internet users were asked to estimate the price for the premium versions. We found the optimal price for the premium version of Facebook to be 1.67 euro per month, while the optimal price for the premium version of Google varied between approximately 1.00 euro and 1.50 euro.