Lately, there have been frequent news reports on Facebook. These reports have touched upon issues such as fake accounts; mishandling of data privacy matters; nonchalance towards concerns raised by the media, authorities and more. Potential oversight and regulation warnings are rampant in the public domain. Furthermore, alleged follies and missteps of Mark Zuckerberg and Sheryl Sandberg are part of the media narratives.
While the issues relating to data privacy and data brokering are serious, Facebook is not the sole perpetrator when it comes to such behavior. Facebook is being villainized for allegedly mishandling the data collection, data-mining, and data-brokering playbook.
Digital alchemy maestros - Google, Facebook, Amazon, Twitter, Alibaba, Microsoft, and Apple, etc., continuously collect troves of online user footprint data and monetize for financial profits.
Facebook, Twitter, Instagram, and Snapchat are mostly open platforms. Facebook’s highly engaged global audience can freely express thoughts, emotions, and opinions on its “open” platform, making it a paradigm-shifting freedom of speech podium. The “open” platforms can be powerful free speech megaphones for billions of people around the world.
The openness makes these platforms vulnerable to potential exploitations and misuse, with concomitant warnings drawn in from the authorities and regulators to introduce restraint and censorship. Google, Amazon, Microsoft, and Apple, on the other hand, are primarily closed platforms.
Google, the largest collector, and broker of individual private data and the number one revenue generator from the $300+ billion digital ad market does not attract commensurate vilification from the media and authorities, because Google is mostly a closed platform. Albeit, Google’s YouTube is an open video product platform offered by the company.
Today, a dominant web business model is to amass voluminous amounts of private data on individual users, with their consent, in exchange or “barter” for free usage of the platform; unlock the embedded information in the raw data using Artificial Intelligence (AI), machine learning and data analytics; thereafter, monetize the extracted information to target and influence consumers. Linking the data to its source facilitates profiling and targeting of ads with high accuracy.
A study conducted by the researchers at Oxford University finds that companies can identify and track users across multiple platforms using embedded tracking features in third-party mobile apps. The study notes that the data collected from the third-party smartphone apps get transferred to a network of subsidiary companies. These subsidiary companies are also owned by Google (over 80% ownership), Facebook (over 40%), Twitter (over 30%), Microsoft (over 20%), Amazon (over 15%), and others.
The collection, cross-sharing, slicing and dicing of consumer online footprint data is growing exponentially due to the “bartered” usage of “free” platforms and smartphone apps.
Pervasive usage of cutting edge AI, machine learning and predictive analytics tools have made the information extracted from the online user data much more lucrative. These tools can fairly accurately profile users from apparently random cross-shared data. Data analytics can predict and make powerful inferences at individual level preferences, such as consumer behavior, social milieu, political affiliations, religious beliefs, and gender-specific inclinations, etc. In addition to targeted ads, such inferences can be used for politically sensitive speech and propaganda.
Facebook, with over 2 billion Monthly Active Users (MAUs) and 1.47 billion Daily Active Users (DAUs), is the most popular global social media platform, followed by Instagram (also owned by Facebook) with over 1 billion MAUs. Twitter has reported 335 million MAUs and Snapchat over 186 million MAUs. Google’s YouTube gets over 30 million visitors per day.
While, Facebook is pushing targeted ad notifications to over 2 billion users worldwide, in doing so, it is not alone. Google, Twitter, Amazon, and Apple are also collecting massive data, directly or indirectly on individual users, and in turn, using it for targeted ads.
As of now, Google is the world’s largest digital advertising company, and Facebook the second largest, followed by Alibaba. The top three own over 60% of the $300+ billion global digital ad market. By 2019, Google is expected to become the first digital ad seller to cross the $100 billion digital-ad-dollar mark.
Google is collecting consumers’ private data, both directly and indirectly through numerous Google products: Android mobile operating system, Chrome web browser, YouTube, Gmail, Photos, and Google-owned third-party data collectors and aggregators.
Google provides the #1 web browser, the #1 mobile platform, and the #1 search engine worldwide. Google’s video platform (YouTube), email service (Gmail), and map application (Google maps) have over 1 billion MAUs each. Android mobile devices are now carried 24/7 by more than 2 billion people globally.
Professor Douglas C. Schmidt of Vanderbilt University, in a recent report states, “Google utilizes the tremendous reach of its products to collect detailed information about people’s online and real-world behaviors, which it then uses to target them with paid advertising.”
The report highlights that Google collects user data in an active and passive manner. The overt method is “active;” where the users willfully communicate information to Google by signing in to Google’s applications such as Gmail, YouTube, Search, etc. The covert method is “passive;” where an application is instrumented to gather information while it’s running, even when the user is not directly engaged, and possibly without the user’s knowledge and consent. These stealth and passive data gathering methods are employed in Google’s platforms (e.g., Android and Chrome), applications (e.g., Search, YouTube, Maps), publisher tools (e.g., Google Analytics, AdSense) and advertiser tools (e.g., AdMob, AdWords).
Digital Content Next, a trade association, further concludes that an idle Android device communicates with Google nearly ten times more frequently as an Apple device communicates with Apple servers. Moreover, the Android phone running the Chrome browser per hour sends fifty times as many data requests to Google, as an idle iOS phone does while running Safari. A major part of Google’s data collection occurs while a user is not directly engaged with any of its products.
Amazon, the e-commerce giant, handles nearly half of all online sales in the US. Through its 100+ million paying prime members and other participants, Amazon is also continuously collecting valuable consumer buying behavior data. The online behemoth is monetizing this data and posturing to take a bigger slice of the digital ad market. The company has lately taken steps to open its data vault to digital ad marketers, allowing advertisers to connect consumers to products globally across the worldwide web. A consumer’s search or purchase on the Amazon site can give valuable insights into what this consumer may buy next. Amazon’s strategy to open its data vault to ad marketers is paying off. In its Q3 2018 earnings release, Amazon announced that it made $2.5 billion in advertising and other service offerings.
The $300+ billion digital ad market, with projections to grow at a double-digit rate, grabs the attention of all the big players. Although Google and Facebook are the current leaders, Amazon, Microsoft, and Apple are vying for a bigger piece of the pie as well.
Facebook has become the piñata and scapegoat, even though it’s business model of profiteering from users’ online behavior data, includes many cohorts such as Google, Alibaba, Twitter, Amazon, Microsoft, Apple, eBay, etc. Facebook has built a compelling “open” platform connecting billions of people globally. Facebook’s “open” platform is a disruptive bullhorn for expression. This openness can sometimes impinge upon popular normative thinking and can be perceived as conjuring politically sensitive hyperbole.
Could Facebook safeguard user data better? Yes. Could Facebook’s corporate governance be beefed up? Yes. Could Facebook police the content better? Yes. Beware how much at the cost of restraint and censorship.
