Recent news regarding Facebook’s usage of customer data, such as selling to firms like Cambridge Analytica, has placed ‘big data’ at the forefront of many people’s minds. For the business owner, understanding what a vendor is doing with your data is of pre-eminent importance.
The aphorism amongst technical people regarding companies like Facebook is that “if the service is free, YOU are the product.” Indeed, many people in the Information Technology field seemed somewhat perplexed at the outrage Facebook faced when it became clear that they were selling the data they collected on users of their services to data analytics firms. This is because treatment of data in this way is not the exception—it is the business model.
The first encounter many people would have with this type of business model is the usage of free email account services, like Gmail, Hotmail, Yahoo, etc. I think that anyone would agree that the Googles and Microsofts of the world are not running charities. Why then do they provide email services at no cost to consumers? Surely there is hard cost associated with providing these services. Indeed, the backend infrastructure needed to accommodate email services for even a small-to-medium businesses can be substantial; the cost of providing a similar service to millions of users is substantial. The question then becomes, why do these companies do it? If it is not out of the goodness of their hearts, so to speak, there must be something in it for them. There is of course, and it is the data they are able to collect from the emails the users of these services send and receive.
At first glance this might seem scary, but in the case of free email services the use case is relatively innocuous, though potentially aggravating—targeted ads. Providers of free email services use sophisticated algorithms to search for keywords within the subjects and bodies of email messages. These keywords are then used to serve you targeted ads advertising products or services that the algorithm ‘decides’ you might be interested in. In fact, this is how much of the advertisement you encounter online is generated.
Facebook is the scaled up version of this model. Using the information that users essentially ‘turn over’ about themselves, they serve those users both content that they might be interested in, and targeted advertisements. As you might imagine, data analytics of this nature are can be put to even more powerful use for things like political campaigns, crime statistics and prediction, and any number of other ‘big data’ uses.
The next question you might be asking yourself is how this could have happened, thinking that you don’t remember giving Facebook consent to use your data. This part of the Facebook saga will likely be further litigated, but the position of Facebook, and other firms that provide similar services, is that by agreeing to their Terms and Conditions, often called the EULA or End User License Agreement, you DID in fact consent to their use of your data, often in whatever way they see fit.
What does all this mean for the business owner? As with any contract, it is important to review the terms of the EULA to be certain you are comfortable with the provisions contained within the license agreement. Oftentimes this can be a daunting task, as the agreement itself will run to many tens if not hundreds of pages. Oftentimes, however, up to date summaries and breakdowns of the agreements themselves can be found online. Be confident of the manner in which your data is to be used, where it is to be stored, and who will have access to view it. And remember nothing is truly free.