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12 Days of Christmas GMAT Competition - Day 6: A proposed regulation

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Bunuel

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12 Days of Christmas 2024 - 2025 Competition with $40,000 of Prizes

A proposed regulation requires that software companies must disclose all data collection practices upfront. If enacted, all software companies, especially major ones, would need to comply. As a result, many users may choose to switch to software that collects less personal data, causing some companies to lose significant market share.

The argument above assumes which of the following?

(A) Companies that do not collect personal data will not gain any significant market share from those that do.

(B) Some users do not currently understand the extent of data collection involved in the software they use.

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share.

(D) Only major software companies collect significant amounts of personal data from their users.

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected.

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Bunuel

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Bunuel

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A proposed regulation requires that software companies must disclose all data collection practices upfront. If enacted, all software companies, especially major ones, would need to comply. As a result, many users may choose to switch to software that collects less personal data, causing some companies to lose significant market share.

The argument above assumes which of the following?

(A) Companies that do not collect personal data will not gain any significant market share from those that do.

(B) Some users do not currently understand the extent of data collection involved in the software they use.

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share.

(D) Only major software companies collect significant amounts of personal data from their users.

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected.

GMAT Club's Official Explanation:

(A) Incorrect because the argument does not suggest that companies that avoid data collection will fail to gain market share; it implies the opposite.

(B) Correct Answer. The conclusion that users might switch to less invasive software hinges on the assumption that they are currently not fully aware of the extent of data collection, as the only change suggested in the argument is more disclosure. The argument makes a prediction that increased transparency will lead users to change their behavior as the result of having more information about data collection.

This is a harder assumption question and the question has multiple possible assumptions in this argument, but this is the only correct option among the 5
given. Another assumption could be that users care about data privacy but that’s not an option, so you have to choose the best available one, even if it is not ideal in your opinion. This is how some of the harder assumption questions on the GMAT work.

(C) Incorrect. This is a speculation; not an assumption necessary for the argument.

(D) incorrect. The argument does not specify which companies (big or small) collect significant amounts of data. This is not the correct or necessary assumption.

(E) Irrelevant. The argument centers on disclosure, not the permissions or the extent of data collection permitted by law.

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The argument links disclosure of data collection to user behaviour change => market share loss. This assumes users don't currently understand the full extent of data collection - if they already knew, disclosure wouldn't lead to changes in behavior. (B) talks exactly about this gap.

Options A, C, D, and E aren't assumed in the argument - they introduce new elements about market dynamics, regulation motives, and consent requirements that go beyond the argument's scope.

(B) should be the answer.

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(A) Contradicts conclusion about market share changes. - Incorrect.

(B) The argument assumes users don't currently understand the extent of data collection. Without this assumption, mandatory disclosure wouldn't necessarily cause users to switch products. - Correct.

(C) About regulation rationale, not argument assumptions - Incorrect.

(D) Not assumed - argument works regardless - Incorrect.

(E) About policy design, not argument assumptions - Incorrect.

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Proposed regulation: Software companies must disclose their data collection practices upfront.
Effect: Many users may switch to software that collects less personal data, causing some companies to lose significant market share.
What is being assumed in the argument?
The argument assumes that users, when informed about the extent of data collection, will prefer software that collects less data. This leads to the conclusion that companies that collect more data will lose market share.

Now, let's evaluate each answer choice:
(A):

Companies that do not collect personal data will not gain any significant market share from those that do.

Not Assumed: The argument doesn't make any claim about the market share gained by companies that do not collect personal data. It assumes that users will switch to software with less data collection, but it doesn't specifically say that those who don't collect data will automatically gain market share. The argument focuses on the shift in users' preferences based on disclosure, not the specific market dynamics.
(B):

Some users do not currently understand the extent of data collection involved in the software they use.

Correct Assumption: The argument assumes that users are not fully aware of the data collection practices of the software they currently use. This lack of awareness is a key reason why they may switch to software that collects less data once they are informed. If users already knew the extent of data collection, the regulation might not lead to a significant shift in market share.
(C):

The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share.

Not Assumed: The argument does not address why the regulation might not be adopted. It focuses on the effects of the regulation if it were enacted, not on the reasons for opposing it. Therefore, this choice is irrelevant to the argument.
(D):

Only major software companies collect significant amounts of personal data from their users.

Not Assumed: The argument does not specify whether only major companies collect significant amounts of data. It focuses on the idea that users may switch to software that collects less data, but it doesn't make any assumption about which companies are collecting data. Both major and smaller companies could be collecting personal data, so this is not a necessary assumption.
(E):

Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected.

Not Assumed: The argument does not discuss the specifics of how the disclosure law should be structured, only that it requires disclosure of data collection practices. The assumption is more about users' potential reaction to such disclosure, not about the specifics of consent for each type of data collection.

Ans B

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The answer is option B.

(A) Companies that do not collect personal data will not gain any significant market share from those that do. -- Not necessary for the assumption

(B) Some users do not currently understand the extent of data collection involved in the software they use. -- If the users understand the extent of data collected, then they will switch to other companies and hence will lose market share

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share. -- The argument is not talking about companies not adopting the regulation

(D) Only major software companies collect significant amounts of personal data from their users. -- Has the word ONLY, so need to be careful. We need to find why the companies will lose share

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected - Again word ONLY and should. We are not concerned about collection of data with users consent.The argument doesn't propose specific terms for how the disclosure should be implemented; it is simply concerned with the impact of disclosure on user behavior and market share.

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option D is the answer

other options are out of scope

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(A) Not necessary, it just states that some of those companies may lose market share, other companies who collect the data too may increase their market share too.
(B) Some users do not currently understand the extent of data collection involved in the software they use. There wouldn't be a reason for user to switch now and not before if they weren't aware of it.
(C) Out of scope, no mention of protection of any corparation.
(D) "Only" is wrong, minor companies do collect data too.
(E) Not an assumption just a statement/opinion.

Hence (B)

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On analyzing the options from (A) to (E) for this given question,

(A) Companies that do not collect personal data will not gain any significant market share from those that do- On negating this assumption, If companies collecting less data do not gain market share, the conclusion about significant market shifts falls apart.Thus we can keep this argument for now.

(B) Some users do not currently understand the extent of data collection involved in the software they use-This is irrelevant to the argument.The conclusion is independent of users understanding of the situation. Eliminate

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share - The argument does not address motivations for opposing the regulation; this is irrelevant. Eliminate

(D) Only major software companies collect significant amounts of personal data from their users- Again irrelevant to the argument in question does not depend on an assumption that only major companies collect personal data. Eliminate

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected-This is a prescriptive statement unrelated to the argument's assumptions. The argument discusses disclosure, not explicit consent requirements.Eliminate

Hence the correct answer to this question is option (A)

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P: data collection practices reveal to public
C: users will switch
WHY?
Well they didn't know their data was collected and to what extent. Now they become aware of it and hence switching.

Option B is stating the same assumption. We can also check its negation.
what if everyone already understands the extent of data collection involved in the software they use? Then the conclusion breaks.

Hence option B is correct answer

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(A):"Companies that do not collect personal data will not gain any significant market share from those that do."
This contradicts the argument. The argument assumes that users would switch to software with less data collection, meaning those companies would gain market share. Incorrect.
(B): "Some users do not currently understand the extent of data collection involved in the software they use."
This directly supports the argument. For the regulation to cause a shift in user behavior, it must assume that users lack information about current data collection practices. Correct.
(C): "The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share."
This might be true but is not necessary for the argument. The argument is about the effects of the regulation, not the reasons for opposing it. Incorrect.
(D): "Only major software companies collect significant amounts of personal data from their users."
The argument does not rely on this assumption. It mentions major companies as being particularly affected but does not claim that only major companies collect significant data. Incorrect.
(E): "Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected."This is irrelevant to the argument. The argument is about disclosure of data collection practices, not about requiring consent. Incorrect.

IMO B

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A proposed regulation requires that software companies must disclose all data collection practices upfront. If enacted, all software companies, especially major ones, would need to comply.

As a result, many users may choose to switch to software that collects less personal data, causing some companies to lose significant market share.

The argument above assumes which of the following?

(A) Companies that do not collect personal data will not gain any significant market share from those that do.
It can be inferred from the argument that companies that don't collect personal data may gain significant market share from those that do. The statement is an inference and not a assumption.
Incorrect

(B) Some users do not currently understand the extent of data collection involved in the software they use.
If the assumption is negated, the conclusion falls apart. If all users currently understand the extend of the data collection involved in the software they use then there is nothing more to disclose about data collection practices upfront and there is no question of software companies losing market share.
Correct

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share.
There is nothing mentioned in the argument why the proposed regulation were not adopted and about protecting major software companies from posting market share. This is definitely not an assumption. The statement is not at all related to the argument and is an additional premise.
Incorrect

(D) Only major software companies collect significant amounts of personal data from their users.
This is a superlative statement and can not be inferred from the argument. There may be smaller firms collecting significant amounts of personal data from their users. This is not an assumption of the argument.
Incorrect

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected.
The argument is not about designing of disclosure laws and how they should be implemented and how consent to each data type to be collected. This is an additional information unrelated to the conclusion. If the statement is negative, the conclusion does not fall apart. Therefore, it is not an assumption.
Incorrect

IMO B

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Question type:

Assumption

Answer choice analysis:

B. Some users do not currently understand the extent of data collection involved in the software they use.

Correct, Since the argument cocludes that when this law will pass many users may choose to switch to software that collects less personal data, this means that currently some users are unaware about this, and hence is the assumption.

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Bunuel

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[*](A) Contradicts the argument. If users switch to less intrusive software, those companies would gain market share. Eliminate.
[*](B) Fits. If users don’t currently understand data collection, disclosure could influence their decisions. Keep.
[*](C) Irrelevant. The argument doesn’t discuss the reasons behind not adopting the regulation. Eliminate.
[*](D) Unnecessary. The argument isn’t limited to major companies; it applies to "some companies." Eliminate.
[*](E) Out of scope. The argument isn’t about consent laws but about disclosure affecting user behavior. Eliminate.

Exactly, If most users already know the extent of the data collected then there won't be any surprise. Hence IMO B

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Restating the Argument:
The proposed regulation would require software companies to disclose all data collection practices upfront. The argument predicts that as a result, some companies (especially major ones) will lose significant market share because users might switch to software that collects less personal data.

Identifying the Assumption:
An assumption is something that must be true for the argument's conclusion to hold. The conclusion relies on the following reasoning:

Users are currently unaware of how much personal data is being collected.
Once informed (due to the regulation), some users will prefer switching to software that collects less personal data.
This user behavior will lead to market share losses for some companies.

Let’s analyze the options.

Option (A):
"Companies that do not collect personal data will not gain any significant market share from those that do."

This contradicts the argument, as the argument assumes that companies collecting less data will gain market share from those collecting more data. Hence, this option is irrelevant.

Eliminate (A).

Option (B):
"Some users do not currently understand the extent of data collection involved in the software they use."

The argument presumes that user behavior will change once companies disclose their data collection practices. For this to happen, users must currently lack awareness of how much data is being collected. If all users were already fully aware of the extent of data collection, the disclosure requirement would not cause any significant behavioral change.

This assumption is necessary for the argument.

Option (C):
"The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share."

This option speculates about why the regulation might not be adopted. However, the argument does not concern itself with the motivations for adopting or rejecting the regulation. It focuses on the predicted consequences if the regulation were enacted.

Eliminate (C).

Option (D):
"Only major software companies collect significant amounts of personal data from their users."

The argument mentions that major software companies would need to comply, but it does not claim that only major companies collect personal data. The regulation applies to all companies, so this statement is neither necessary nor assumed by the argument.

Eliminate (D).

Option (E):
"Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected."

This option introduces a new idea about how disclosure laws should be designed. The argument does not address how the law should be structured; it only predicts the consequences of the proposed regulation.

Eliminate (E).

Correct Answer: B

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The main conclusion of the argument is - many users may choose to switch to software that collects less personal data, causing some companies to lose significant market share.

(A) Companies that do not collect personal data will not gain any significant market share from those that do.
If we go by the argument, it should be the opposite of what is stated and we are looking for statements that can support the conclusion.

(B) Some users do not currently understand the extent of data collection involved in the software they use.
If this is true, that means many people who are using software now are not aware of the data collection that takes place. They will come to know about the data collection through this regulation and switch to other software where there is less data collection, in this process some companies may loose market share. This supports the conclusion. Correct

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share. - Conclusion doesn't talk about the adaptation of the regulation. Irrelevant.

(D) Only major software companies collect significant amounts of personal data from their users. Conclusion says some companies may loose significant market share. Major companies are some companies. This also seems like a good choice but lets try negating, only major software companies don't collect personal data, if the choice is correct, then if we negate it, it should weaken the conclusion. After negating, there are some companies that are still going to loose significant market share. The negated statement is not affecting the conclusion. So this option is out. Not correct.

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected. - Irrelevant. Not talking about companies loosing market share.

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Argument Breakdown:
Premises : A proposed regulation require software companies to disclose all data collection practices upfront
Premises: if enacted, all software companies, especially major ones, would need to comply
Conclusion: many user may choose to switch to software that collects less personal data, causing some companies to lose significant market share

Now, lets evaluate each option:

(A) Companies that do not collect personal data will not gain any significant market share from those that do.
This is not an assumption of the argument. in fact the argument suggest the opposite - the companies collecting less data might gain market share

(B) Some users do not currently understand the extent of data collection involved in the software they use.
This is the correct assumption. The argument assumes that when users are informed about the data collection practices (due to the new regulation), they will choose software that collects less data. This implies that users are currently unaware of the extent of data collection

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share.
This is not assumed in the argument. The argument doesn't discuss reasons for or against adopting the regulation

(D) Only major software companies collect significant amounts of personal data from their users.
This is not assumed . the argument mentions that all companies especially major ones would need to comply implying that non major companies also collect data

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected
This is not an assumption of the argument but rather a suggestion for how laws should be designed the arguments doesn't make any assumption about how laws should be designed.

Therefore the correct answer is (B) the argument assumes that some user do not currently understand the extent of data collection involved in the software they use. This assumption is necessary for the conclusion that user may switch to software that collect less personal data once the practice are disclosed

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(A) Irrelevant: Focuses on companies not collecting data, while the argument centers on users choosing software with less data collection.
(B) Strong Assumption: The argument hinges on users' current lack of awareness of data collection practices. Disclosure would likely influence their choices.
(C) Irrelevant: Introduces a new concern (regulation opposition) not central to the argument's logic.
(D) Irrelevant: The argument applies to all software companies, not just major ones.
(E) Irrelevant: Focuses on specific regulations, while the argument focuses on the impact of disclosure on user choice.

Therefore, (B) is the most crucial underlying assumption.

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Option B
The main idea here is that the argument relies on the fact that people don't fully understand how much data their software is collecting.
It basically says that if people knew how much data was being collected, they'd likely switch to software that collects less. This is because people would choose software that respects their privacy more.

Option A,C,D,E
The other options either don't really matter to the main point of the argument or bring up other ideas about how data collection should be regulated, which isn't the main focus of the argument.

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The argument above assumes which of the following? Let's try to negate and see which option choice breaks our conclusion.

(A) Companies that do not collect personal data will not gain any significant market share from those that do. May or may not happen but it's not a required assumption as even on negating this statement - companies that do not collect personal data will gain significant market share from those that do seems to support our conclusion instead of breaking it.

(B) Some users do not currently understand the extent of data collection involved in the software they use. On negating this, it means some users do understand the extent of data collection involved but lot many don't and hence they still would switch to other software. This statement seems pretty neutral.

(C) The main reason for not adopting the proposed regulation cited above is to protect major software companies from losing market share. This may be true but cannot be a required assumption as we are not given any pointers on when the regulation will be enacted.

(D) Only major software companies collect significant amounts of personal data from their users. On negating this, it might mean that non-major companies also collect significant amounts of personal data. This completely breaks our conclusion as users will then not switch to other companies as all companies seem to follow similar data collection practices and hence major companies won't loose their market share.

(E) Disclosure laws should be designed such that software companies are allowed to collect data only if users have explicitly consented to each type of data being collected. Good steps to retain users but irrelevant in the given context.

Answer: D