Tuesday, October 20, 2009

Opt-In, Opt-Out and Informed Consent

By Leah Downey

Value-Sensitive Design Conceptual Investigation

One of the services my employer provides is Internet service to residential and business customers. Within my company, there is a directive to encourage our internet customers to switch to electronic billing, as this will save the company money and reduce paper waste. An issue came up recently in regards to the process customers follow when signing up for e-billing service that I would like to explore in this conceptual investigation.

Problem Space: Marketing checkbox on sign-up page for e-billing service

Customers interested in signing up for e-billing must submit their username and password on the enrollment page. This online form also includes a checkbox that offers customers the ability to receive product and service information and special offers from my company via email.

At issue is whether the checkbox on that page should be pre-checked for the customer or whether customers should have to deliberately check the box to indicate their interest in email marketing. The company recently decided to pre-check this box, which means that customers who sign-up for e-billing will also be consenting to future marketing from my company unless they take the time to uncheck that box.

Here’s an example from Overstock.com’s registration page:

Specifically, the checkbox comes pre-checked – “click here to receive exclusive email savings".

Value: Informed Consent

This choice, between unchecked and pre-checked indication of permission for email marketing, is referred to as opt-in vs. opt-out. An unchecked checkbox next to the phrase “Sign me up for product news and special offers” would be an opt-in scenario, because in order to get the email marketing, the end-user must opt to check the box. Opt-out means that the box comes pre-checked and the end-user must choose to deselect the checkbox to avoid (opt-out of) the email marketing. In my opinion, the value that underpins this is informed consent.

There are some regulatory guidelines in place designed to protect consumers in these situations. For example, the Federal Trade Commission (FTC) has outlined a set of Fair Information Practice Principles. The principle of Choice/Consent states “Opt-in regimes require affirmative steps by the consumer to allow the collection and/or use of information; opt-out regimes require affirmative steps to prevent the collection and/or use of such information… In order to be effective, any choice regime should provide a simple and easily-accessible way for consumers to exercise their choice.” The FTC doesn’t take a position on which choice system is appropriate, but the issue is debated by many.

Friedman et al explored the concept of informed consent. They broke down the characteristics of informed consent into the following five components:

  1. Disclosure (about benefits and risks for participation)
  2. Comprehension (language can be understood by the end-user)
  3. Voluntariness (in the absence of coercion)
  4. Competence (having the physical and mental abilities to give consent)
  5. Agreement (accessible ongoing means to accept or decline participation)

  6. The first two components speak to an understanding of ‘being informed’ and the last three speak to ‘giving consent’. A sixth component was incorporated into their overall model of informed consent later:

  7. Minimal Distraction, i.e. users are not distracted from their primary task or are not overwhelmed with intolerable nuisance

In the specific context of the online sign-up form with the checkbox option to allow additional marketing, we can take a closer look at how Friedman et al. further described the component Voluntariness. The authors pointed out that certain types of manipulation can undermine voluntariness and affect a person’s perception of choices. One way to achieve this, they argue, is to manipulate the “options presented to the individual such that the presentation encourages certain choices or behaviors”. I suspect that many companies believe that people are less likely to take the time to uncheck a box that is already checked – and prescribe the design of these interfaces accordingly. Further research can explore whether the presentation of choices has an effect.

In addition, it would be worth exploring whether the addition of the marketing checkbox on the sign-up form constitutes a significant distraction from the users’ primary task, and thus not conform to the Minimal Distraction requirement of the informed consent model.

Direct and Indirect Stakeholders

The two direct stakeholders that I envision in this scenario:
1) Customers interested in receiving electronic bills instead of paper ones
2) Corporate Marketing will receive the names of customers who agree to marketing

The two indirect stakeholders:
3) Customer’s family members who share email inbox
4) Corporate shareholders

Benefits and Harms for each Stakeholder Group

Following are benefits and harms listed for each direct and indirect stakeholder in regards to the opt-out choice.

1) Direct Stakeholder: Customers interested in receiving electronic bills instead of paper ones

  • Benefit: May be informed about special offers that could save them time or money
  • Benefit: May learn of product or service pricing or availability for products/services that they want or need
  • Harm: May receive unwanted marketing emails that contribute to information overload, may miss important and/or desired communications in inbox
  • Harm: May miss important information about their products and services because they ignore all emails from the company

2) Direct Stakeholder: Corporate Marketing

  • Benefit: Increased size distribution list (i.e. more members) – this is often a success metric in itself – growth in member sign-up
  • Benefit: More email recipients means more emails being opened, more “click-throughs” from email to website or landing page marketing, which may lead (someday) to more sales.
  • Harm: Customers form negative impression of company, less likely to buy and more likely to spread negative opinion via word-of-mouth
  • Harm: Customers request to be removed from distribution lists, removing the company’s ability to influence them
  • Harm: Customer complains to FCC about company’s email marketing
  • Harm: Customer flags company emails as spam, leads to negative consequences for company’s reputation – being blacklisted means your company’s email marketing is blocked from corporate mail servers, inhibiting your ability to market to even explicitly willing customers

3) Indirect stakeholder: Customer’s family members who share email inbox

  • Benefit: If family saves money as a result of special offer via email, can contribute to overall family member’s well-being (financial health can mean more opportunities for family members)
  • Harm: May receive unwanted marketing emails that contribute to information overload, may miss important and/or desired communications in inbox

4) Indirect stakeholder: Corporate shareholders

  • Benefit: If email marketing translates to positive reputation and increased sales, this can positively impact shareholder value, contributing to financial well-being
  • Harm: If email marketing translates to company being blacklisted can result in decreased sales which negatively impacts company performance and shareholder value


This is an important issue because more and more companies are taking advantage of the channel of email marketing. Many companies view this as a low-cost method to get their message to existing and potential customers. The risks, however, to the relationship between the customer and the corporation as well as corporate shareholders are great and should not be taken lightly.


Friedman, B., Lin, P., and Miller, J. K. Informed consent by design. In Security and Usability: Designing Secure Systems That People Can Use. O'Reilly, Cambridge, 2005, 495-521.

Friedman, B., Kahn, P. H., Jr., and Borning, A. Value Sensitive Design and information systems. In Human-Computer Interaction and Management Information Systems: Foundations. M.E. Sharpe, Armonk, N.Y., 2006, 348-372.

Friedman, B., Felten, E., and Millett, L. I. Informed Consent Online: A Conceptual Model and Design Principles. UW-CSE Technical Report Number 2000-12-2, 2000.

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