GadgetGuy asked US correspondent Sam Bocetta to have a look at how US citizens feel about the tech invasion and how more tech means less privacy.
Sam is erudite and by no means a tin-hat (paranoid about tech) – he revels in it. But it seems US citizens are beginning to understand that privacy, not climate change (although a vital challenge) is the next greatest global challenge. Yes, more tech means less privacy.
So, let’s push the reset button, slow things down and give us back control of our personal data! Let’s see if FAANG et al., can survive if things go the way they should.
More tech means less privacy
First, a disclaimer – big tech is not yet breaking any laws. Big tech is working in unchartered territory that is yet to be comprehensively, globally legislated. The purpose of these articles is to get legislators to grow a pair and take the 1,000lb bull by the horns and corral it (sorry for those Trump’isms).
So, in 2004 Mark Zuckerberg stole the idea from the Winklevoss brothers to write an app – Facemash (that became Facebook) – that rated the chick’s hotness on campus.
But like almost every free app, Facebook needed cash to sate Zuc’s desire for fame and fortune. Its business model soon became “If the product is free, the product is you.” Zuc started selling advertisers the names, ages, and occupations of people who clicked on ads. The rot set in!
That was the beginning of the end of your privacy.
There are zillions of articles on how a new generation of tech firms are disrupting the market – and all use the euphemistic and ill-defined term ‘data acquisition’.
While such articles wax lyrical about how knowing more about you leads to more convenience and to serve you better, understand that every company that has a consumer app works by turning your data into gold – rivers of it.
It may be as innocuous as a shoe store knowing your age, gender, shoe size and favourite colours and emailing you with its applicable offers (loyalty programs). But worse, that shoe store may sell the data to Facebook, Google and many other programmatic advertising platforms or data brokers to hit you with advertisements for things it does not sell – colour coordinated shirts, hats, belts, socks… Then the cycle starts again – these new advertisers sell the data they collect and well, rinse and repeat.
It’s certainly possible to argue that having more competition when it comes to data collection and analysis is going to break the dominance of the “big five” companies that are currently tracking everything we do. Whether this would be a positive development is a more complicated question: won’t more tech firms just mean that more of our private data is captured, stored, and used to sell us stuff we don’t need?
Here’s what we think: yes.
But don’t just take our word for it. History is an excellent teacher. Back in 1963, the US government merged hundreds of federal databases into one centralised system. They called it the National Data Bank. Though this was just one database, collected by one arm of the government, it caused huge concern: The New York Times reported at the time that because the bank would “pool statistics on millions of Americans,” it could “possibly violate their secret lives.”
And look at the kerfuffle in the 80s with your own Australia Card that could have toppled Bob Hawke’s popular Labor Government.
Looking back, those US and Aussie worries seem remarkably prescient (prophetic). It is also worth pointing out that since then things haven’t gotten any better. The rise of tech giants has annihilated our privacy and we let them!
We are getting to the stage we need to control what Government and big tech need to know about us – and it is a tiny fraction of what they already know.
For the past 20 years data acquisition has been the domain of just a few companies – ‘FAANG’ (Facebook, Amazon, Apple, Netflix and Google – and Microsoft et al. but they could not find a better acronym). I think the term Mosquito (annoying bloodsuckers) may be apter.
The way these companies have cornered the market for personal data has been well-documented – hell you would have had to be living in a cave not to know. The hard-to-understand privacy agreements these companies use are notorious, and the fact that Google reads your emails is common knowledge.
Other techniques are less well known. Smartphones and apps both access your location data, but these apps are often less up-front about what they do with it. They don’t make it clear, for instance, that a bank loan officer may also use that location data to analyse which stores, cafes and places you frequent. Eat out too often, user Uber-Eats – no loan for you!
Similarly, it’s probably clear to you that someone knows what kind of shoes you’ve been looking to buy because that same advert is now following you around the web. What you might not know is that companies may be recording not just your clicks, but also the exact movements of your mouse. Some companies are even analysing the unique way you tap and fumble with your smartphone.
These techniques have all been developed in the West, and mainly by FAANG. But we’d be remiss if we didn’t mention another huge data collection system: that run by China. Chinese censorship is a given, and less well known are apps like China’s Great Nation, which collects vast amounts of data by claiming to be a (mandatory) educational app.
A New Generation of Mosquitos
Most of us know our data is being collected and sold by the big tech companies. Our job is to make you aware of how much of your data they collect and money they make off it. The next development in data acquisition might make things even worse.
The clearest sign of what is to come is the fact that in 2019 several tech companies went public, most for record sums: Slack, Lyft, Uber, Pinterest, and soon companies like Airbnb and Postmates. Share offerings are a way to generate investment dollars to roll out the next phase of their business plan – taking on FAANG.
In the coming years, we may go from a “big five” to a “big ten”, or even a “big 100”.
The reasons for this increased competition are many. One of them is the rise of “DTC” (direct-to-consumer model), where companies are looking to sell directly to consumers – no middleman taking a percentage.
E-commerce companies like Wayfair and Boxed have spent many years building alternative marketplaces for groups of like-minded customers, and many of the new generations of tech companies are looking to appeal directly to their audiences. Say goodbye to bricks and mortar retail.
Another significant shift in the market for data acquisition is that digital advertising is simply more effective.
Advertising globally is a US$600 billion-a-year business growing at 4.3% (Statistica)
American companies alone spent over $19 billion in 2018, acquiring and analysing consumer data, according to the Interactive Advertising Bureau. This means that even companies not in the advertising business generate huge revenues from it. Apple, which is (or wasn’t) primarily an advertising company, is expected to generate $2bn in search ads in the app store in 2020.
In the old days, advertising was shotgun marketing. You fired a shot and a few pellets hit home (return on investment). The age-old cry of marketers was they spent $X on advertising – the problem is that they did not know what worked and what did not.
Advertising today totally relies on data. Even seemingly benign activities, like staying in and watching a movie generates mountains of information about target audiences, and streaming, media even TV manufacturers collect as much information as they can.
They sell this data to data brokers, another relatively new type of business that does nothing but buys and sells personal information. Then companies like Dominos or Uber-Eats buy that data and market to you during your movie.
Add to this many new and powerful data collection techniques – not just machine learning systems but also spyware in the IoT – and you have the “perfect” environment for up-and-coming companies to get rich harvesting data.
The Bad news For Consumers – more tech means less privacy
While these developments enable tech start-ups, they are bad news for consumers. With more companies than ever before collecting data, the places and spaces where we can be genuinely private are decreasing by the minute.
Let’s look at my day.
- Wake up to my smart alarm. OK, Alexa/Google/Siri What is the weather and what is on my schedule today?
- Turn on the TV for some breakfast pap while using a smart fridge and other IoT appliances
- Dress, put on my smartwatch and use my smartphone (my constant pocket companion) to arm the alarm/security cameras and open/close my garage door
- Drive to work using my smart GPS and Apple/Android smart car passing hundreds of speed and surveillance cameras and tracked by traffic satellites
- Arrive at work and log-on to a computer
- Order coffee/lunch via the Uber app or the smart screen at the store
I could go on but that few hours generates gigabytes of data about me – all passively. Advertisers have a field day applying machine learning and artificial intelligence to target me with advertisements – I had a strange compulsion to have a chocolate latte and a sub for lunch!
OK it’s the wild west, but we can tame it
Lawmakers are slowly waking up to this reality, but they need to grow a pair. Because instead of fixing the root problem, they are simply legitimising the collection and use of your data.
In Australia, the ACCC is suing Google for misleading users about data acquisition. Microsoft has called for the federal regulation of facial recognition, while Apple CEO Tim Cook has argued that the FTC should step in and create a clearinghouse to register all data brokers.
Many countries are passing laws that legitimise this form of data collection. Australia has recently passed such laws. And while it sounds great that tech companies are calling for greater regulation too, this might also be a cynical move to limit opportunities for smaller companies to enter the market.
To my mind, all the action so far amounts to asking the fox to mind the chickens!
There remains a great deal of ignorance about just how much information is collected from unwitting consumers. Study after study has demonstrated that users still don’t know what is collected, let alone it is being sold, traded, and shared.
If you can’t tell when the government is watching you, you are unlikely to be able to grapple with the extraordinary lack of commercial ethics of data collection or spot a start-up that wants access to inappropriate levels of information about you.
The solution is really so very simple
“If the product is free, the product is you” is the root cause. Well, what if the product was not free to those that demanded privacy? That is an option you don’t have now.
Before you choke on the concept of paying anything let me tell you that in the grand scheme of things that it would amount to a few cents, maybe a few dollars – a micropayment – based on the income big tech would have received for your data. And I suspect many users would not bother to demand privacy, so we won’t see skyrocketing costs to use FAANG et al.
It would simply require legislation to include a privacy flag on your data – kind of like a ‘do not call register’. Big tech could still collect everything and still provide you with tailored services but could not sell it – use it against you!
If we took that a little further (and big tech already have a unique identifier – probably your mobile number) to tie disparate data sources together it would not be so hard to have a ‘Do not sell registry’ that could also act as a real identity registry to stop phishers and scammers.
GadgetGuy’s take – we are so far past George Orwell’s 1984. More tech means less privacy
Privacy is a fundamental human right. Big tech seems to believe that we will forgo that to use its services (have you noticed how the same adverts seem to follow you forever?)
It also matters because personal data is already the basis of extremely important decisions that have life-changing consequences. This includes whether you can maintain your health care benefits, get a loan, that perfect job, or granted bail.
With more tech companies entering the market, these algorithms become ever harder to police and regulate. And while we are no fan of FAANG, we also feel that the regulation around data acquisition and processing needs to prohibit everyone with $10 from setting up a data collection company.
Only then can we deal with the moral and ethical issues raised by data acquisition.
Ironically, and totally independently GadgetGuy’s managing editor Ray Shaw has written a piece titled ‘The key technology issues in 2020 – and you won’t like them (New Year Rant)’ and I can only say that it needs to be mandatory reading too.
Happy New Year from the US. We have the utmost sympathy for the Australian bushfire victims.
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