Privacy as a exchange currency

Enrique Dans
Enrique Dans
Published in
4 min readDec 17, 2013

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The conditions attached to a fiber optic broadband internet connection being offered by AT&T in Austin, Texas, has sparked debate. The 300 mbps service, which will be updated at no extra cost to 1 gigabit after initial rollout, comes in at a standard price of $99 a month, but can be had for $70 if customers agree to take part in a program called AT&T Internet Preferences, which allows the company to access users’ information (which pages they visit, search terms, etc.) with the goal of providing users with advertisements tailored to their interests.

The first conclusion we can draw from this is clear: AT&T’s offer puts the price of privacy at $350 a year. Is that a reasonable amount? Are there enough users prepared to allow a company to look at everything they do on the internet, with the exception of https connections, in return for $350 a year?

And in the post-Snowden era, now that we are aware our governments and others spy on us, just how would such a deal play out? Are we going to become ever more careful to protect our privacy, or will we come to see that all resistance is futile, and that we might at least be paid for being scrutinized in such a way?

In short, the discussion about what AT&T’s offer really entails should focus on the key issue of privacy. To what extent has our privacy now become no more than something to be haggled over, and who are the beneficiaries? For some time now, Google has been encrypting our searches, which automatically eliminates any possibility of anybody knowing what search terms we use via that service. The growing use of https as a default setting to encrypt all searches started out as an opt-in, and is now, in the wake of the NSA spying scandal, standard, and means that only Google knows what its users are looking for online. Is encryption a protection measure, or has the company obtained information that it can now sell to the highest bidder?

Just what search data does AT&T expect to get its hands on if the most widely used search engine is encrypting such information? How will it react if users who sign up for the deal then encipher all their navigation by using a private, virtual network? And how is it going to make money from any information it is able to glean if it says it isn’t going to substitute advertisements on the pages we visit? Does AT&T intend to replicate Google’s model and offer to qualify advertisers’ campaigns by using the data it obtains from users? What deals are going on behind the scenes that might allow AT&T to use this information for its own ends?

The difference to Google’s model is clear, although there are similarities: while Google “remunerates” the user with the free use of its services and products, AT&T does so via a price reduction. In the case of Google, users have to speculate as to the value of the services they use, and assess whether that use compensates for the use of their data, in the case of the US phone company, the price tag has a number on it. Which of the two scenarios is the most fair and transparent for the user?

We are beginning to see some suspicious trends regarding users’ privacy. The majority of smartphone users now install apps on their devices, and are used to giving permission pretty much across the board without reading the terms and conditions of use, which allows many apps to obtain information about ourselves that are not required for them to function.

Why does the latest version of Android, Kit Kat, include a mode that allows users to make decisions on a case-by-case about the permissions that they cede to each app, and then, after the decision has been discussed o the social networks, the company now says that this was an error inherited from a development model, and has since returned to the previous modus operandi? Why would Google decide to take back from its users an installation option that could protect them far better than those apps that ask for privileges that have nothing to do with how they work?

How much is a client’s privacy worth? How much of the information garnered can or should be shared with third parties, and subject to what conditions? Are we going to see empires created on the basis of making money out of data that does not and never has belonged to them, but is instead the legitimate property of their owners?

(Available in Spanish here)

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)