The Wild West Of Data Privacy
Data is the new oil. We have entered a new era where everything is digitized, and if it hasn’t been, it will be. The International Data Corporation estimates that data will grow from 59 zettabytes (ZB) in 2020 to 175 ZB by 2025. The unprecedented surge in popularity of video streaming and digital services due to the pandemic will likely exacerbate that prediction. The rapid accumulation of data makes it the world’s most valuable and profitable asset. And that is not hyperbole. With something this profitable, everyone will want a piece of it, most notably big tech.
What is Data?
In its most elementary form, data is binary code that translates information - facts. Data is facts about you: your personal information, like social security number, name, age, address, place of employment, IP address, your medical history, browser history, the list goes on. Data is also metrics, how often a website is visited, which products were purchased from a vendor, etc. Data becomes valuable once an entity or entities process it.
How is Data Collected?
Data is collected through IoT - the Internet of things, which is a shorthand way to say all devices connected to the internet. Data is generated from nearly every product and channel we use from work to home to public spheres; phones, apps, email, computers, wifi, home devices like security alarms, cars, streaming accounts like Netflix. IDC predicts 41.6 billion connected IoT devices by 2025. All of these devices and services collect and transmit data in real-time. But, do you know how the data is being used once it’s collected? Were you aware your data was being collected? Unfortunately, due to a lack of transparency, data collection often resembles data piracy.
Remember the days when we could scroll through a website or social media without seeing an advertisement between every few posts or scrolls? I don’t either. Remember when you first suspected your phone was listening to your conversations? I don’t either. And that’s the point. It’s become so commonplace to have our data scoured and sold to the highest bidder that we stopped noticing. When you use an app or click on a website, these services and companies have permission to collect and monitor your interactions and expressions of data. Apps are also able to collect information in the background when you aren’t using them. Data harvesting is digital white noise, except this white noise has an insidious underbelly. That is where data privacy becomes essential.
Why is Data Privacy Important?
Data Privacy is a trending topic. Data protection for consumers is currently minimal and unregulated. If you ever read George Orwell’s 1984, we are living it. Thanks to unregulated data collection, everything we do is monitored by the proverbial eyes of ‘Big Brother.’
Data is ubiquitous; our economic landscape relies on the aggregation of data. Data collection is a requirement for business success and marketing. Under our current iteration of capitalism, there isn’t an opt-out option either. If you want to participate in society-at-large, your information requires digitization. You don’t exist without your data.
If I must have my data digitized, shouldn’t I have the right to control my data? Sounds reasonable enough. Well, you’d be wrong. Right now - it’s the wild wild west, and Big Tech conglomerates, like Facebook, who pioneered and popularized data harvesting as a business model, are scrambling to make sure the digital space stays unregulated.
The Ethics of Data
Data collection has ushered in a new paradigm of business where the customer is the commodity. Your data is their primary target. How does data collection equate to profit? Companies or organizations have access to things like your personal preferences, buying history, and buying power with your data. They can make educated predictions about what will get you to purchase or do something with that knowledge. These methods of marketing are incredibly effective because they use your psychology against you. Companies use behavioral psychology to curate their marketing tactics based on what your data says.
Everyone has received one, more likely several, emails informing of a potential ‘data breach’ that could have compromised your data. Everyone wants data, but not everyone intends to use it harmlessly.
Companies can legally sell your data to anyone, even malicious agents, who can leverage your data against you for their benefit. We have seen this play out with the proliferation of false information. Any entity can acquire data regarding your political affiliation and bombard you with targeted ads appealing to emotional psychology on all platforms. AI takes it a step further by refining algorithms to make that information prevalent based on what gets the most clicks or screen time (it even knows how long your cursor lingers on a button or page). In the age of disinformation, it seems every source is biased. We tend to trust the information in front of us as universally valid. The more we see it, the more we believe it. So, with the internet configured by monopoly players to advertise everything all the time, this creates pixelated ideology - where we only see parts of a whole picture.
Documentaries like The Social Dilemma brought attention to the ethics behind big tech’s data aggregation and business model. Data privacy is at the heart of our economy and has real tangible results when unchecked. For example, the lack of data regulations made the Cambridge Analytica controversy and foreign intervention in U.S. elections possible.
The current methods of data collection violate the greatest of all tenets: informed consent. Yes, informed consent extends to more than sexual relationships. Informed consent requires transparency between all parties. It’s a question of balancing legality with ethics. If you sign up for a provider’s service, do you have the right to know how and when they collect your data, how they are using it, and who gets it next? Inevitably, whoever has your data can affect you, for better or for worse. Informed consent is where two tech giants don’t see eye-to-eye.
Facebook v Apple
The tech giants have been taking jabs at each other for years now. The most recent data controversy has two major tech mongols pitted at each other: Facebook v Apple. Apple rolled out a new update allowing users to opt-out of third-party data collection with its App Tracking Transparency feature, a move that has Facebook terrified for its profit margins. Apple’s Tim Cook said of Facebook, “If a business is built on misleading users, on data exploitation, on choices that are not choices at all, it does not deserve our praise. It deserves reform.”
Apple’s step towards the regulation of data collection is admirable (and strategic) in securing consumer trust amidst the Cambridge Analytica congressional hearings and social concern over data privacy. Facebook is concerned because its entire business model is based on collecting your data and not just collecting but also selling.
Regulations mean less profit for companies that rely on data primarily for revenue. Facebook’s full-page ads in every major magazine and publication are its PR death throes to hold onto its profits. The ads state that Apple’s data regulation will harm small businesses. Smaller companies can get a competitive edge by purchasing data analytics to form their marketing strategies, so this isn’t untrue. However, who do you think these companies get their data from? Facebook. These ads severely underplay that Facebook stands to lose the most revenue from Apple’s move to regulate data collection, not small businesses.
Data regulation is inevitable. Many countries have taken actions to start the conversation, if not enacting policy. The European Union rolled out its first data regulations in 2018. EPIC and other privacy coalitions have recently released a policy framework for the Biden Administration regarding data privacy with this statement:
“Without laws that limit how companies can collect, use, and share personal data, we end up with an information and power asymmetry that harms consumers and society at large. Individual, group, and societal interests are diminished, and our privacy and other basic rights and freedoms are at risk.”
- Nasa (https://unsplash.com/photos/Q1p7bh3SHj8)
Companies like Apple are getting ahead of the curve; other companies will forced to reimagine their business models or take a massive hit to their bottom line. So for the discerning capitalist, you might be wondering, how then will companies make money if not from data? The way business has been conducted for generations: through trust.