PRIVACY BREACH PERCEPTIONS AND LITIGATION INTENTIONS: EVIDENCE FROM E-COMMERCE CUSTOMERS

Privacy and data security remain the most important concerns for consumers in the information age. Despite the growing number of privacy breaches and the harm caused to customers and firms, many countries, including India, have only just begun enacting specific data protection laws. However, very little research has examined how consumers react to these developments.  In the context of changing the legal business environment, this study validated a framework to explain online customers' intention to engage in litigation under privacy breaches. The framework considered antecedents such as customers' privacy dispositions, consumer awareness of firms' data management practices, perceptions of the effectiveness of firms' privacy policies, the magnitude of vulnerability due to personal information disclosure, and social risks associated with privacy breach along with a few customer-centric moderators like privacy control beliefs, efficacy in coping and litigation complexity perceptions. Using a cross-sectional survey design, responses from e-commerce customers about items measuring constructs (n=176) were collected. A structural equation modelling analysis of the tool, WarpPLS 6.0, revealed that privacy breach perceptions significantly predict litigation intentions. Customers' dispositions toward privacy, the vulnerability of privacy breaches, and the fear of social reputation damage were significant predictors of privacy breach perceptions. Furthermore, the privacy control beliefs and coping skills positively moderated the power of antecedents to predict litigation intentions, while the task complexity associated with litigation negatively moderated the effect. The study observed that the firms may face many litigations on privacy issues when reliable legal procedures and remedies are in place. To overcome such challenges, firms must work towards gaining customer trust in data management practices. A firm's ability to handle and use customer data transparently is becoming a competitive advantage. Thus, the corporate strategy for sustainable growth should consider a new dominant logic that encourages customers' confidence in sharing their data.