Internet opt-in and opt-out

This paper studies the solicitation process of consumers' consent - should consumers be requested to explicitly disapprove the use of their personal data (opt-out), or to acknowledge and permit the use of such data (opt-in)? Although these two actions may serve the same functional purpose (i.e., grant approval to the use of the supplied information), various regulatory and industry bodies have exhibited opposing attitudes towards them. The European Union Data Directive (1995) endorses the opt-in approach, whereas the Direct Marketing Association (DMA) recommends an opt-out procedure for consumers to remove their data from future uses. The two approaches can be operationalized via different option frames and preference elicitations. We illustrate how different permutation of frames and default preferences can affect the level of consumer participation and investigate the moderating role of privacy concern on these corollaries.