Thursday, December 12, 2019

Privacy wars: we should not pay to opt out, we must be paid to opt in

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Recently Facebook‘s Sheryl Sandberg announced that Facebook users, who do not want their personal data harvested by advertisers, will be expected to pay for the opt-out option. Wait, what?

What does this statement tell us about Facebook and personal data business?

First and foremost, it implies that our personal data is quite valuable. Think about it for a minute. Facebook is literally saying that if we are not giving them a consent to process and use our personal data for advertising, they will lose money. The loss is going to be significant, since Facebook wants us to compensate them. Facebook could ask us to pay for their services because they will not be able to harvest our data and earn profits from it. All of Facebook’s current profits come from our data. 

Second, businesses earning major buck from our personal data do not want to share their profits with us – data subjects. The industry got to the point where personal data became a presumed free resource for businesses. Facebook and others assume that our personal data is theirs to harvest and earn from it. And if businesses cannot do it – for example, we do not give our consent – they think that they are entitled to the compensation, i.e. us paying to opt out. They are not trying to compensate for our data or share the value they get from it. We are required to surrender our consent for personal data processing in exchange for the “free” services, discounts, etc. Of course, services and offers are not free – we pay with our time and energy for endless ads which follow us everywhere we go, whether on-line or off-line. 

To sum it up – we pay businesses with our personal data for flawed (ad ridden) services or other widgets we barely need. Our data is then used to get billions of dollars in profits. If businesses cannot get their hands on our data, then they want us to pay them. Instead of offering us a share from the profits they earn from our data, they think that we have to compensate them for potential profit loss. 

None of the businesses offer to purchase our data transparently before they use it to earn profits. We are duped to accept such vague promises as better services, better offers, tailored content, etc. It is acceptable to harvest personal data in exchange for “better targeted ads”, which invade our privacy even more. 

I think that Facebook’s reasoning is flagrantly selfish. Their arguments do not hold up on a closer inspection. Businesses treat personal data as a currency but at the same time refuse to act on it. If we agree that personal data is something of the value, then we have to be compensated for it.

Consider the “normal” businesses. If your business is making chairs, you have to buy material first. If your business is software, you have to buy programmer’s labor. If you are a coffee shop you won’t be able to serve your lattes without purchasing coffee beans. So why do we let data businesses to twist this business logic to their advantage? All businesses will seize an opportunity to get something for free and then sell it for a lot, if we let them, but this is no justification for appropriating our data. Because personal data is easier to harvest than beans, we are even tricked to surrender it ourselves. We shall not be fooled that we are getting “free” services – an exchange of goods is taking place without any negotiation on the price. There cannot be a negotiation when suppliers (individuals) are not aware of the real price of their goods (data). 

There are myriads of on-line services, whether mobile or desktop, which require us to submit some type of personal data for identification and verification, marketing, sales and other purposes. It is very easy to lose track of where and what data has been submitted. This allows data businesses to operate in a grey area where data subjects (us) are not fully aware of the type, scope and value of personal data circulating through different commercial channels. If we are not aware, then we cannot exchange it for a real price.

At an individual level it is easy to discount the value of the personal data. Data businesses are not interested in a single person – only big numbers count. Attempts to sell personal data individually have not been commercially successful. As individual suppliers we have no if any bargaining power. It is impossible to make predictions and get statistically significant analytical results from a small data set. This again helps to create a one-sided market, where suppliers (individuals) have no say on the matter. 

We need to rethink the value behind personal data and question status quo of data business. I believe the best path for us, as the data sources, is to network together and demand our share in the business, which generates billions annually. Individuals have to get value for the opt-in. There must be a real control of our consent – a free and easy option to opt out. 

Network of data subjects is more powerful than each of us alone and has a potential to disrupt current practices with the individual user in mind.

The author Dr. Auste Kiskiene is the co-founder @Consent Token, Fulbright Scholar @Montana State University, Knowledge and Data Management Researcher, Entrepreneur and Assoc. Professor of Management and Entrepreneurship @Kazimieras Simonavicius University, Visiting Professor @Tongji University.

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