Earn consumer trust, or face the politicians

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The adverse publicity surrounding customer data at Sony and Apple ought to have harmed those brands. But whether they like it or not, consumers have little choice but to keep giving companies their details.

Sony has admitted that over 100m subscribers to its PlayStation Network, Qriocity and Sony Online Entertainment services could have had their details stolen in a recent hack, while the revelation that Apple’s iPhones log data about their users’ locations has prompted accusations of the company spying on its customers. Apple says it does not collect or store the data.

But while neither brand would have welcomed the negative column inches, it is hard to imagine consumers deserting their products and services. It did not stop Apple usurping Google as the world’s most valuable brand this week, according to Millward Brown’s BrandZ report.

There is something of a disconnect between what consumers say and what they do when it comes to companies using their data.

According to a survey of UK adults reported by Marketing Week last year, half said they would lose confidence in a brand following one bad experience concerning their personal data, and one-third after bad press for a data breach. As many as 88% of people said they are concerned to some degree about the security of their information.

But what does this really matter? In the same survey, only 22% of consumers claimed to have done anything about their concerns, and anyway, how much can they do?

Giving up their personal details is now routine for most consumers, and services such as those provided by Sony and Apple could not be accessed otherwise. Few gamers are going to be dissuaded from playing online, or iPhone owners from using location-based services such as Google Maps, because of the bad publicity.

Consumer trust, per se, is not a huge issue for brands as long as data-driven services remain so ingrained in people’s daily lives. But it is an issue if governments take note and feel compelled to protect people from brands’ security failings. In that case, everyone loses, because companies will face extra costs of compliance and consumers might see some of their valued services taken away.

The EU’s justice commissioner Viviane Reding has warned both Apple and Sony that they must “guarantee protection against data loss or an unjustified access”. That will sound ominous in a legislative climate where authorities on either side of the Atlantic are looking hard at how data should be regulated.

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