Privacy rights in online interactions and litigation dynamics: A social custom view

We develop a social custom model where a population of social media users decide whether to remain online and accept the platform’s data-gathering policy or abandon the social media and litigate for privacy violations. By allowing the users’ concerns for informational security to co-evolve with the number of privacy-related trials, we find that the system may converge to multiple equilibria. When users put relative emphasis on the relational benefits of online interactions, privacy-related trials remain contained and the provider imposes no limitations to its data-gathering activities. Conversely, when users put relative emphasis on the privacy costs of web-mediated interactions, privacy-related trials become endemic and platforms modulate their data-gathering activities by mediating between profitability and the legal implications of their choice. We use these results to comment the recent shift in the users’ orientation towards online platforms and caution against the inability of institutions to keep up with the process of technological change.