Data Sharing and Website Competition: The Role of Dark Patterns

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Abstract

Regulations like the GDPR require firms to secure consumer consent before using data. In response, some firms employ “dark patterns”—interface designs that encourage data sharing. We study the causal effects of these designs on consumer consent choices and explore how these effects vary across individuals, firms, and the frequency of these choices. We ran a field experiment where participants installed a browser extension that randomized cookie consent interfaces as they browsed the internet. We find that consumers accept all cookies over half of the time absent dark patterns, with substantial preference heterogeneity across users. In addition, users frequently close the window without making an active choice. When the interface hides certain options behind an extra click, users are significantly more likely to select the options that remain visible. Purely visual manipulations have much smaller effects. Larger and better-known firms achieve higher consent rates, giving them a competitive advantage, but dark patterns do not exacerbate this advantage. We use a structural model to show that the consumer surplus-maximizing consent banner increases welfare by 11% compared to the most common banner, while reducing consent rates by 17%.

Citation

Farronato, Chiara, Andrey Fradkin, and Tesary Lin. “Data Sharing and Website Competition: The Role of Dark Patterns.” (2024).

@article{farronato2024data,
  title={Data Sharing and Website Competition: The Role of Dark Patterns},
  author={Farronato, Chiara and Fradkin, Andrey and Lin, Tesary},
  year={2024},
  journal={Working Paper}
}

Funding

• Internet Services Grant