User Autonomy and the Pending Data War
It was our hope for the future: freedom, offered digitally, to anyone willing to foot the bill for access. Once a decentralized network to bounce information between machines around the globe, the internet has evolved into anything but. Consolidation has taken hold; companies are now in control.
It’s not that we haven’t noticed. Recent research suggests we’re now more concerned with privacy than ever. According to Pew Research, the vast majority of Americans believe they’re being watched. More than 60% of US citizens believe that their online and offline activities are being monitored by corporations, the government, or both. Worse, more than 80% believe they have little or no control over what’s being collected, how, and by whom. And according to the recent Norton LifeLock Cyber Safety Insights Report, a total of 92% of global online users have at least one significant concern about their data privacy.
We’ve spent considerable energy worrying about what the future holds. Still, we’ve seemingly lost sight of the fact that our online privacy is already under attack.
You Are the Product
As the saying goes: “if you’re not paying, you’re the product.” We don’t have to look far to find overwhelming evidence of just this. Massive corporations control the Internet, and most of them became massive by offering free services they hoped to one day monetize. And monetize them they did.
Though the first online advertisement appeared way back in 1994, this simple banner ad pales in comparison to what we see today. To get a glimpse at ad networks and data collection practices we’d recognize, we have to fast forward to 2000, when Google introduced AdWords.
AdWords forever altered the Internet. Google wasn’t the first to offer paid placement, though it was the biggest, and its ad product was the best of its time. Google pocketed billions by prioritizing paid ads over organic results, even when the latter were more relevant. For a few cents per click in some cases, advertisers could outrank more relevant search results. Search data determined the cost of these clicks, and how relevant they were to specific keywords.
Facebook launched its ad network in 2006. It was, arguably, an even more egregious offender than AdWords. While Google had access to a mountain of search data, Facebook had access to everything. Social media was built to facilitate the sharing of intimate details. Facebook collected this information, sorted it, and created the world’s most invasive ad product.
Google and Facebook are by no means alone, though the ad climate we know today was largely shaped by these two companies. Of every dollar spent in online advertising, 70 cents of it ends up in the pockets of just three companies: Google, Facebook, and Amazon.
Today’s internet isn’t about creating products; it’s about cultivating them. Pirate Bay co-founder Peter Sunde may have said it best.
“We don’t create things anymore. Instead we just have virtual things. Uber, Alibaba, and Airbnb, for example, do they have products? No. We went from this product-based model to virtual products, to virtually no product whatsoever. This is the centralization process going on.”
The Consolidation Problem
Compounding matters is the ongoing process of consolidation. While the worldwide web took off as a free-for-all, a frontier for companies to stake their claim, we’ve since seen a colossal shift toward consolidation. Major corporations are now internet gatekeepers. They get to decide who plays and for how long.
When an innovative upstart challenges the status quo, they compete with copycat products at bigger rivals or struggle to gain traction. For example, Google has long been accused of thwarting opponents by burying them in its search results, favoring its products instead. The company has been fined three times in two years in the EU — a total of nearly $10 billion — for these anti-competitive business practices.
For smaller startups, these practices often mean it’s best to sell to a larger competitor. The road to an initial public offering is a bumpy one. Ask Snapchat. The messaging app decided to weather the storm when Facebook-owned Instagram, WhatsApp, and then Facebook itself, announced copycat features to those that made Snapchat famous. It likely cost the company billions.
Competition is expensive. It’s often best for gatekeepers to spend billions acquiring a company, harvesting its data, and turning it into scrap rather than to risk competing with it later. For startups, the choice is to take what they can get or risk being consumed.
This consolidation leads us to today, a digital economy where vast swaths of the internet owned by a handful of major players. Business as usual doesn’t mean business as it always will be. In recent years, consumer interest in privacy-focused products has grown. The problem is coming into focus for today’s internet users. Or parts of it are, anyway.
A Showdown is Coming
Privacy is a symptom of a much larger problem, one of control. To
understand this we also have to distinguish “the problem of privacy from that of platform power” as stated by Michael Veale, lecturer for digital rights at University College London. The problem is not just in how our data is collected, how it’s used, or how influential companies track our every move online and off, but in the outsized power each of them wields over our daily lives. They control the game by controlling the platforms, allowing us to play in only the ways they see fit.
Perhaps ironically, by asserting this much control over the Internet, these companies gave rise to a growing movement centered on decentralized and privacy-focused services and applications. These are competitors that could one day dethrone them, competitors that they helped create a market for in the first place. Many people are wrestling with where to draw the line. Users are willing to exchange *some* data for convenience. Still, if scandal has shown us anything, they are eager to bolt for greener pastures once they find them. Convenience for the sake of convenience is no longer a business model we blindly subscribe to. And as the problem grows larger, so does the market for ethical, human-friendly alternatives.
To date, these alternative apps and services have faced two significant problems. One is in education. Consumers are aware that they are mostly data points in the machine that moves the Internet, but it’s unlikely that many understand the scope of the problem. And if they do, if more than a century of sales and marketing data has taught us anything, it’s that consumer behavior is ingrained in our very existence, and once loyalty is established, it’s difficult to change. The other problem is in a lack of alternatives that can offer everything our favorite free services can.
Solving the first problem comes with time. Over the years, we’ve become aware of the problem. We’re all living on a spectrum of how much we’re willing to tolerate before we do something about it. Some have already given up their favorite search engines, for example, or moved to smaller, community-driven social networks. Others will too. If there’s one thing that’s certain about the internet, it’s that nothing is guaranteed. Today’s giants are tomorrow’s has-beens.
As for the second problem, it’s complicated, but we’re making progress. Today’s alternatives are less an issue of subpar apps or services, and more one of familiarity. The second problem, however, creates a third: paying for it all. Consumers have to be willing to fund services that were formerly thought of as free. Without advertising as a model and data collection as the cog in the wheel that drives it, user support is crucial.
Even this, though, isn’t as big a problem as it may seem. When better solutions emerge, people have proven they’re willing to pay for them. In essence, we’re experiencing a last-mile problem. We’ve reached a point where good alternatives exist. As opposed to previously failed starts, these companies are no longer trying to mimic their largest competitors; they’re trying to reimagine their spaces entirely. These are the companies that could, very soon, upset the balance of power. But while they’ve figured out how to travel 99 percent of the way, there’s still some work to be done in that last one percent.
Once they get there, though, expect fireworks.
About the author: Leif-Nissen Lundbæk (Ph.D.) is Co-Founder and CEO of Xayn. His work focuses mainly on algorithms and applications for privacy-preserving artificial intelligence. In 2017, he founded Xayn together with Professor Michael Huth and Felix Hahmann. The Berlin-based company develops privacy-protecting AI applications such as its namesake search assistant based on edge AI for personalised search results. Winner of the first Porsche Innovation Contest, the AI company has already worked successfully with Porsche, Daimler, Deutsche Bahn, and Siemens. Before founding Xayn, Leif-Nissen Lundbæk has worked with Daimler AG and IBM. He studied Economics at the Humboldt University in Berlin, received his M.Sc in Mathematics at Heidelberg University, an M.Sc. with distinction in Software Engineering at The University of Oxford and obtained his Ph.D. in Computing at the Imperial College London.