The cost of free

free-keyboardAmong my favorite technology blogs is Monday Note, which publishes weekly. One of the writers, Jean-Louis Gassée, is an industry veteran who has worked at Hewlett-Packard and Apple, founded Be, Inc., which developed BeOS, became chairman of PalmSource, Inc. in 2004, and now, I believe, mainly consults for a living. And writes his blog.

Last week, Monday Note published Gassée’s article on the power of company mottoes. It’s an interesting read, and as such got me to thinking about company business models.

In a typical business model, a company designs, manufactures, and sells a product. If consumers like the product, they buy it. The company makes money. The cycle continues.

Companies offering ‘free’

But what about companies that offer a product that is free? We’ve seen a lot of that over the last decade.

app-icons-social-mediaGoogle has long offered free search. Facebook offers free social media. Instagram lets you post and share your photographs—for free. There’s Twitter, Snapchat, Flickr, Dropbox—the list goes on.

Only the most naïve among us would believe that these companies are offering their products and services out of the goodness of their hearts.

Obviously, they’re getting something out of it. Most of us know this and don’t care—or don’t give it much thought.

We use those products and services. We like them. They don’t cost a nickel. It’s all good, right?

Well, one thing we know for sure is that these services are not really free. We give up something of ourselves to use them. Data. Information. Privacy. We open ourselves up, possibly in ways that we aren’t even aware of.

Big data is just getting started

We’re early on in the big data story. Companies are beginning to deploy big data analytics, and we don’t know what the limits are. Businesses that are collecting enormous amounts of data about their users are continually developing and refining new ways to capitalize on this data.

big-data-cell-phoneIn fairness, companies like Facebook, Google, and others periodically update their privacy policies and make them available to us. However, in this era of information overload, we often don’t take the time to read these policies.

The Monday Note article, as mentioned, talks about company mottoes, mission statements, and other such corporate-speak.

Facebook’s mission statement, for example, is:

…to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

Although that seems reasonable on the surface, the mission statement interestingly doesn’t talk about how Facebook uses our data to make money. Are we to believe that making money is not really part of the company’s mission?

In the Monday Note article, Gassee provides his version of Facebook’s mission statement:

Our social network connects people. In doing so, we collect personal data that allow us to sell targeted ads.

Privacy policies

Now we’re getting somewhere. What might further shed light is to take a look at Facebook’s privacy policy. I’ve done it, so you don’t have to. Here are a few choice bits.

privacy_policyData that Facebook says it collects:

  • User information, including when users sign up for an account, create or share, and message or communicate with others.
  • Content information, such as the location of a photo or the date a file was created.
  • Which people and groups users are connected to and how users interact with those people or groups.
  • Contact information users provide if they upload, sync or import this information (such as an address book) from a device.
  • Transaction information, such as credit or debit card number and other card information, and other account and authentication information, as well as billing, shipping and contact details.
  • Information (IP address, operating system, hardware version, device location, ISP, etc.) from or about computers, phones, or other user devices, which Facebook may then associate as belonging to specific users.
  • Information about the websites and apps that users visit, their use of FaceBook services on those websites and apps, as well as information the developer or publisher of the app or website provides to users or about users.

How Facebook says they use this data:

  • Deliver Facebook services, personalize content, and make suggestions for users by using this information.
  • Understand how users use and interact with Facebook services and the people or things users are connected to and interested in on and off Facebook services.
  • Conduct surveys and research, test features in development, and analyze the information to evaluate and improve products and services, develop new products or features, and conduct audits and troubleshooting activities.
  • Send users marketing communications.
  • Show ads and measure their effectiveness, and thereby send users better targeted ads.
  • Verify accounts and activity, and promote safety and security on and off of the services, such as by investigating suspicious activity or violations of terms or policies.

A bit creepy

It’s pretty clear that Facebook knows way more about us than we probably imagined when we signed up for an account. It starts to seem a bit creepy.

creepyAnd that’s just Facebook. What about the other online companies that use our data? Amazon, Google, Instagram, and surely many others?

If we’re online, our data is being collected and used. What we buy. Our interests. Our income. Our employer. Our recent purchases. Who we associate with. Whether we’re Democrat, Republican, or Independent. What drugs we use (legal or otherwise). Whether we drink, and, if so, our favorite libations. Whether we have a police record. Whether we have psychological problems, or a debilitating, even fatal, illness. Where we plan to go on vacation, and when. And much, much more.

That is the cost of free, but it doesn’t  feel liberating. In fact, it feels like the opposite of liberating: at any given time, anyone with access to our data could conceivably misuse it and cause us potential harm.

Inevitably, it seems, our data will fall into the wrong hands. It’s only a matter of time.

See you on Facebook!