“Facebook doesn’t have customers, it has hostages.” – Cindy Cohn
Controversies in the tech world often make headlines, but a highly-publicized clash between two titans stands out in bold print. As is common today, data lies at the heart of this latest feud.
Among a series of changes to Apple’s user privacy and data use policy to be rolled out this year for iOS 14, apps will soon need to ask iPhone users for their permission before tracking them across other apps and websites (Apple).
In response to this development, Facebook released two full-page newspaper ads and an 1800-word statement called ‘Speaking Up for Small Businesses.’ In the statement, Facebook’s Vice President of Ads and Business Products Dan Levy claimed that Apple’s policy would hurt the sales of small businesses, and force them to turn elsewhere for revenue.
The statement only made a cursory mention of “Facebook’s diversified ads business,” which thrives off user data tracking (including information about user behavior off Facebook, regardless of whether those users have a Facebook account or not, according to Facebook’s data policy). About 98% of Facebook’s total revenue comes from its ads business. In 2019, the company made over US$69 billion from ads. In 2020, according to the company’s fourth quarter earnings report, this grew to $84 billion.
In the brawl between the two Big Tech firms and in the larger conversation around privacy, commercial data surveillance for targeted and personalized advertising is a key flashpoint.
The topic of data surveillance blew up in 2018 after the infamous Cambridge Analytica scandal, where over 50 million Facebook users’ information was harvested without consent and used for political gain (The New York Times). Facebook CEO Mark Zuckerberg subsequently failed to explain why third parties enjoyed access to users’ personal information for so long (The Guardian), painting a revealing picture of the company’s attitude toward data protection.
As Cindy Cohn tells it, Facebook used that moment to further distance itself from data responsibility. Cohn, a champion of digital rights, is the Executive Director of the Electronic Frontier Foundation. She was featured on the TheNonProfitTimes’ 2020 Power & Influence TOP 50 list and named one of Forbes’ America’s Top 50 Women in Tech in 2018.
“I was really excited when people woke up to [Cambridge Analytica],” says Cohn, “but it’s actually turned out to be kind of bittersweet in a way that the policy responses have not addressed the real problem, which is that Facebook has way too much of our data and way too much control over it, and that we need to be more empowered.”
Big Tech is watching consumers
Cohn believes that Big Tech still has a monopoly on data because the cycle of innovation has stagnated in the past two decades.
“We don’t have new companies coming in and eating Facebook’s lunch the same way Facebook ate the lunch of Myspace. We don’t have a new search engine that’s coming in and moving us away from Google, the way that Google moved everybody away from Yahoo,” she says.
Data and advanced advertising algorithms put power into Big Tech’s hands. The Internet is a vast mix of online locations (such as websites and apps), geographical locations, and unique online behaviors. As the Internet grew, advertisers became able to reach users in multitudinous ways.
Some advertisers target users through their search history. Others display ads based on the context of the website or app; for instance, advertising a neobank on a finance blog. But a third kind, behavioral targeting, has attracted the most acclaim and scrutiny.
Behavioral targeting uses data including what users search for, click on, and buy, to serve customized ads. A 2009 Network Advertising Initiative study found that it increased the chances of sales conversion by at least twice that of run-on-network advertising, where ads are placed on a website arbitrarily. While good for business, it’s essentially a surveillance program that delivers data to scores of advertisers, data brokers, and government agencies. Users often have no idea who knows what, and how much, about them.
ProPublica found that Facebook collects and buys enough data on users to classify them across 52,000 unique attributes. Google can record all user activities on its app ecosystem, including location data even when signed out of Google Maps (CNET). The practice not only uses data to predict behaviors, it also manipulates users into making decisions based on cues, rewards, and punishments (The Harvard Gazette).
Successful as it may be, Cohn rejects the idea that behavioral targeting is the only way to grow.
“When I [ask entrepreneurs] to think a little beyond the surveillance business model, they say that [they] can’t possibly. Well you’re either an innovator, or you’re not,” Cohn says. “If you want to be an innovator, you’ve got to be willing to think outside the box that we’re currently in. Whoever breaks us out of that box is going to win big the same way as Zuckerberg won big when he figured out how to do social networking.”
Undoing the surveillance economy
One of the earliest red flags of the data economy was the focus on using tracking cookies to “[attract] eyeballs for advertising,” Professor Emerita at Harvard Business School Shoshana Zuboff said in an interview with The Harvard Gazette. This, she said, created a “new economic logic that offered a fast track to monetization.”
Zuboff is credited with coining the term ‘Surveillance Capitalism’, the economic system that commodifies and sells personal data.
The ability to monetize data in this way and at this scale is a result of developments over the past two decades. As Cohn explains, there are several enablers of mass consumer surveillance: slow regulation on data privacy, investors being unwilling to fund ideas that compete with Big Tech (Bloomberg), and clickwrap agreements which often give users no choice but to click ‘I Agree.’
The surveillance capitalism system has thus engineered conditions where companies in any industry can only compete if they have extremely granular data, and where users struggle to take back control of their personal information.
“We need to have some basic privacy rules on the floor,” Cohn says. “People shouldn’t be stuck with the responsibility of having to navigate these concerns themselves. It’s not right, and it’s leading to people feeling overwhelmed and powerless.”
Data, and its use in furthering technological progress, is a multilayered issue. But Cohn suggests that a good litmus test is to check whether it makes the life of the user better. It’s the only legitimate argument for the use of data, which is why companies often resort to it to justify their practices.
There’s no panacea web of data exploitation that Big Tech opened up. The situation calls for a confluence of big data ethics, user-oriented privacy regulation, public education, and industry guidelines for the competitive use of data. It’s a tall order, but ultimately, one that will make the Internet a safer, less exploitative place.
