“Yes, We Are ‘The Product’ In Ad-Supported Businesses”

There are many reasons, some more valid than others, that people are wary of so-called free Internet services like Facebook and Google, those companies of great utility which make money not through direct fees but by collecting our information and encouraging us to create content we’re not paid for.

Foremost, there are fears about surveillance, which I think are very valid. Hacks have already demonstrated how porous the world is now and what’s to come. More worrisome, beyond the work of rogue agents it’s clear the companies themselves cooperated in myriad ways with the NSA in handing over intel, some of which may have been necessary and most of which is troubling. Larry Page has said that we should trust the “good companies” with our information, but we shouldn’t trust any of them. Of course, there’s almost no alternative but to allow them into our lives and play by their rules.

Of course, the government isn’t alone in desiring to learn more about us. Advertisers certainly want to and long have, but there’s never before been this level of accessibility, this collective brain to be picked. These companies aren’t just looking to peddle information but also procure it. Their very existence depends on coming up with better and subtler ways of quantifying us.

I think another reason these businesses give pause isn’t because of something they actually do but what they remind us of: Our anxieties about the near-term future of Labor. By getting us to “work” for nothing and create content, they tell us that even information positions have been reduced, discounted. The dwindling of good-paying jobs, the Gig Economy and the fall of the middle class all seem to be encapsulated in this new arrangement. When a non-profit like Wikipedia does it, it can be destabilizing but doesn’t seem sinister. They same can’t be said for Silicon Valley giants.

In his latest Financial Times blog post, Andrew McAfee makes an argument in favor of these zero-cost services, which no doubt offer value, though I believe he gives short shrift to privacy concerns.

An excerpt:

Web ads are much more precisely targeted at me because Google and Facebook have a lot of information about me. This thrills advertisers, and it’s also OK with me; once in a while I actually see something interesting. Yes, we are “the product” in ad-supported businesses. Only the smallest children are unaware of this.

The hypothetical version of the we’re-being-scammed argument is that the giant tech companies are doing or planning something opaque and sinister with all that data that we’re giving them. As law professor Tim Wu wrote recently about Facebook: “[T]he data is also an asset. The two-hundred-and-seventy-billion-dollar valuation of Facebook, which made a profit of three billion dollars last year, is based on some faith that piling up all of that data has value in and of itself… One reason Mark Zuckerberg is so rich is that the stock market assumes that, at some point, he’ll figure out a new way to extract profit from all the data he’s accumulated about us.”

It’s true that all the information about me and my social network that these companies have could be used to help insurers and credit-card companies pick customers and price discriminate among them. But they already do that, and do it within the confines of a lot of regulation and consumer protection. I’m just not sure how much “worse” it would get if Google, Facebook and others started piping them our data.•

 

Tags: