We all love free stuff. We’ll try almost anything that is offered to us at no cost. Many apps fit that description. But are free apps really free? Have you ever paused for a few seconds to read the terms of agreement before downloading an app? Are you aware of what you’re signing up for?
The second you hit “download,” you get an app seemingly for free. However, you are giving in return something much more valuable than money: your private information. As the old saying goes, “There are no free lunches.” In the Information Age, this has never been truer.
The Cambridge Analytica and Facebook scandal brought the issue of the use and misuse of personal information to the forefront, especially now that Congress has stepped in to investigate. While it may come as a surprise to more than a few people, this issue has existed for many years.
To better understand such incidents and their future implications, we need to first understand the power of information and its use as an invaluable commodity.
Further Reading: “Should You Stop Using Social Media? 5 Ways Facebook May Cost You”
Information as a Commodity
All the companies we interact with on the internet collect our data. Almost everything we do is valuable to them. This includes not only our profile, but also our transactions, our messages, our contacts, the people we know, the sites we’ve visited and the time we’ve spent there, the places we’ve physically been, and more. Companies collect, gather, and analyze everything.
Facebook and Google offer free services in exchange for user data. The user is not their client — advertisers are. Both of these companies make money by collecting, selling, and analyzing user data, primarily on behalf of advertisers.
In 2017, Facebook brought in about $40 billion in advertising revenue, a figure that represents almost 20 percent of the global online market and is expected to grow in the coming years. Google’s revenue totaled $110.9 billion in 2017. And with the inclusion of its advertising network, about 90 percent of the company’s revenue came from advertising. Certainly, these numbers indicate that our information is, and has been, monetized in a big way. We may think we are getting something for free, but we are in fact giving our valuable personal data to the companies to capitalize on.
Targeted advertising is only one of its many uses for personal information. The Facebook scandal is about something much more significant. It is suspected that Cambridge Analytica and its customers used the data purchased from Facebook; and that they used this to develop models to psychologically profile or categorize people in order to actively target them with ads and content on behalf of different political campaigns.
Profiling and building analytical models based on users’ data is not something new. Companies have been using data science to develop predictive models of customers’ behavior for quite some time.
Further Reading: “5 Marketing Ploys That Make You Spend More Money”
The Power of Data Science
In 2012, a story about a pregnant teenage girl made headlines when Target figured out that the girl was pregnant before her father did. Target hired a data scientist, who gathered information on the company’s customer transactions, purchasing habits, and behavior. Based on this data, he built a model that was able to predict, with high probability, whether or not a customer was pregnant.
Target vs. Facebook
At the time, the story received a lot of publicity. People questioned the use of customer information and whether there were any privacy-violation issues involved. But the Target incident is different from the Cambridge Analytica scandal for the following reasons:
First, the Target data was not sold or purchased. Rather, it was property of the company and collected from its customers. Every company engages in this practice to gain a better understanding of an individual customer or group of customers.
Companies also use the data for the personalization and customization of information viewed by customers. We all love personalization and customization, especially millennials. Information can be personalized and customized because data is collected, analyzed, and modeled to deliver the best user experience to the customer.
Further Reading: “How to Use Social Media to Promote Your Business”
Second, whenever we visit the site of any retailer, such as Target, Amazon, or Apple, we leave a digital footprint. This traces all of our activities, not only our transactions. This includes products we viewed (but did not purchase), time spent on each item, frequency of visits to the site, and so on. We should be mindful that our activities on the web can be tracked and analyzed, even if we haven’t signed an agreement allowing that. Unless information is encrypted to protect privacy or access requires a password, all of our internet activities are public information.
Ethical vs. Unethical Data Use
The Target incident may sound creepy, especially to people who are unsettled by the idea that a retailer can know something about a teenager before her parents do. But all companies in all sectors gather and analyze customers’ information. This includes retailers, financial services, and health care companies.
Data collection is not illegal or immoral. We can only hope that Companies use such information ethically rather than nefariously.
In Target’s case, the company used data, but did not misuse it in an immoral fashion. The Facebook incident got Congress’s attention because the companies involved manipulated and unethically abused the data. We may not have heard about Cambridge Analytica had it sold the information to advertisers rather than people who were trying to sway political elections.
The use of our data for manipulative marketing or political purposes is the least of our worries. It’s the danger of identity theft that should concern us the most.
Further Reading: Check out our ultimate guide to protecting against identity theft.
The Risk of Identity Theft
When we don’t pay attention to why and to whom we are giving our information, we make it remarkably easy for criminals to abuse our data and, in the extreme, engage in identity theft.
This is an era of sophisticated criminals who exploit the internet to steal our identity and ultimately our financial security. Tampering with our personal information may result in tampering with our financial information. When that happens, our entire lives are thrown into turmoil.
Everyone — a prospective employer, a lender, our landlord, and sometimes even our date — looks at our financial information. It, along with our personal information, is our most valuable possession. We usually secure and insure other possessions of ours. So why shouldn’t we ensure the safety of our most precious ones: our personal and financial information?
Therefore, it is imperative for us to be cautious when providing access to our personal data in exchange for a supposedly free app. We must be mindful of what we are signing for.
Securing our private information is indeed vital. We should remind ourselves, however, that if used ethically for research, it has the potential to improve our lives a hundredfold.
Further Reading: Learn about companies that help you protect against identity theft.
Data and Artificial Intelligence
We are fascinated by artificial intelligence, or AI, as it is commonly known. AI is researched for applications in all walks of life — gaming, medicine, neuroscience, autonomous cars, and more. It’s practically making sci-fi a reality.
We must understand that the I in AI is built from the human I, meaning intelligence. Information on human behavior is gathered and analyzed. Algorithms are then built with this data to train machines to act like humans. We are happy to provide our information, knowing that research that uses it has the potential to improve our lives and well-being. But we do not support unethical uses of our personal information.
So before we give permission for apps and companies to use our data, we should first understand what we are signing up for and how the company will use the data. That is, read the terms of agreement.
It is worth noting that a few companies are currently working on Blockchain solutions, which might be able to help avoid incidents like the Cambridge Analytica scandal from happening again. How might that be possible? We’ll discuss that in a future article.
The opinions expressed in this article are those of the author alone and do not necessarily reflect the official policy or views of CentSai Inc.