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Lack of Online Privacy Has Chilling Effect, U.S. Department of Commerce Says

Breaches and corporate data collection have stopped 45% of Americans from buying and saying stuff online.

The constant threat of breaches, surveillance, and online data collection stopped almost half of American households from doing business and expressing opinions online last year, according to a new survey from the U.S. Department of Commerce.

Using 2015 census data, a new analysis from the National Telecommunications and Information Administration (NTIA) finds that out of 41,000 internet-using households (representing a total of around 19 million), 45 percent claimed they've refrained from banking, buying stuff, posting on social media, or talking about controversial topics online over the last year. The reasons people gave for the chilling effects vary, but a significant majority (63 percent) cited identity theft, followed by credit card fraud, corporate data collection, government surveillance, and other factors.

The chill was also on average 10 percent more common among households that had fell victim to a data breach in the previous year, as well as those that cited more than one factor for avoiding online activities.

"NTIA's initial analysis only scratches the surface of this important area, but it is clear that policymakers need to develop a better understanding of mistrust in the privacy and security of the Internet and the resulting chilling effects," the agency wrote. "In addition to being a problem of great concern to many Americans, privacy and security issues may reduce economic activity and hamper the free exchange of ideas online."

Granted, the analysis is based purely on peoples' volunteered responses, which don't tend to represent solid proof of chilling effects. But the results do seem to jive with recent studies that present empirical evidence of chilling effects, including one which found that traffic on Wikipedia articles about terrorism and privacy fell by more than 20 percent following Edward Snowden's surveillance revelations.