Data at What Cost?

Question: Is it fair that companies make money on an individual’s data?

Before I answer that question, let’s look at how companies turn your data into money. An article “How Companies Turn Your Data Into Money” published on PCMag.com explains the process.

“A publisher’s audience is their currency,” author Max Eddy (AOL) states. “No matter how they make money from content — be it through advertising, paid subscription or syndication, a publisher’s core asset is audience and audience data.”

Collected data is valuable for online advertising. It sends tailored information to a consumer based on location, age, race and more. When an ad relates too or resonates with a consumer, it can result in a sale, or at least a click.

But what if companies are using an individual’s data for their own financial gain? Bill Budington, a senior staff technologist with Electronic Frontier Foundation, points out the dark side. “For-profit universities, for example, target low-income people” Budington said. “You pay thousands and thousands of dollars, and they give you a diploma that isn’t worth the paper it’s printed on. Targeted advertising has a really pernicious side”. In this case it appears that for-profit universities are intentionally targeting vulnerable individuals and taking advantage of them.

Another way for companies to gain data is ad retargeting. This cookie-based technology allows companies to collect previous online activity and “follow” you across the web, creating opportunities to keep their brand in front of you even after you have left the company’s website. This can be done through a software development kit (SDK). Developers get paid to include this software in places where it can receive information about people’s behaviors and app usage.

But is it fair for companies to be doing this?

Well, companies like Google, Facebook and Twitter are offering you free online services. They provide a way for you to look up information, socialize and connect and for the most part they don’t charge you a cent. They could introduce subscriptions, but most people would not want to add another monthly or yearly payment and would look for a free alternative. Instead, you pay with your data. If something “free” seems too good to be true, you should question why. Most of us view Google as a search company, a web browser or an operating system developer. But the reality is, it’s an advertising platform.

Sometimes companies are not the only ones collecting and distributing your information, however. Rob Shavell, co-founder of Abine, a privacy company explains, “public records are the biggest source of data for brokers. The company says that activities that are necessary to functioning in society — say, buying property, registering to vote, and even renewing a driver’s license — can create public records that are mined by data brokers. Several brokers also collect information from court records, meaning that an individual’s criminal history is potentially for sale.”

Shavell developed a service called DeleteMe that removes your information from data broker and people-search websites. DeleteMe works with the FTC and FCC to give more power to consumers. This is a great tool, but I agree with Shavell who believes that the government should be more involved and play a larger role in helping consumers protect their data (although some people would still be more likely to trust a company like DeleteMe to protect their information, over the government!).

Another way that data is collected is by Whitepages.com. Whitepages collects cell phone numbers, addresses, background check data, financial records and more, and is described simply as an online directory service, a modern version of the traditional phone book. Companies and individuals can access all this information for as little as $1.

Data is regularly collected from individuals without them knowing, thanks to software and data brokers. Your information is being sold and passed around, so that companies can better understanding you, target you, make the perfect pitch and make a sale.

Is it fair? Yes and no. As mentioned before, this is how many companies make their earnings and provide you with a service that you use on a daily basis. Many websites invite users to read their “cookie policy”, which seems like they are being open and transparent, but often they simply state that they are using cookies to “improve your experience” or “show you relevant advertising”. Can you remember the last time you actually reviewed a cookie policy? Do you remember what you clicked when the cookie policy popped up? Most people click “ok” and look forward to their improved experience.

Consumers should be informed up front and in layman’s terms, what data is being collected, where it is going and what it is being used for, and I believe the government should play a role in monitoring companies and making sure they are following the law.

The consumer has a responsibility to be aware of the consequences of their online activities, but companies should be transparent about exactly what data they are collecting. Companies should be able to learn about their customers, but it should be up to the consumer to decide how much they are allowed to know.