How we gave technology firms the bargain of the century

In America, we pride ourselves on our ability to get the best “bang for our buck.” In a country with popular TV shows devoted to thrifting, couponing, and living in tiny houses, there’s nothing that makes an American light up more than scoring a good deal. It’s why people line up for hours for Black Friday deals, read articles about clever ways to save money, and brag about getting something for less than they should have paid for it. It’s therefore not surprising that web services like Facebook, Google Docs, Credit Karma, and more would all market themselves as “free” services to use. People routinely used to pay $70–100 for Microsoft Office, now there’s Google Docs. Yet these companies can market their services as “free” and simultaneously be valued in the billions of dollars because, of course, their services are not free. If they were, Facebook would be a financial black sheep, Google would probably still be operating out of a garage, and a litany of other services and companies would likely have never existed. While many of these companies provide valuable goods and services for no actual dollars, if the consumers were getting the better end of the bargain, there is no way tech companies would be the hottest industry right now. The reason for this discrepancy is both known and ignored, understood and misinterpreted, a source of stress for many of us who click the “Terms and Conditions” we never read, while simultaneously a gift to many who couldn’t afford to shell out dollars for services like web search and email (think how many subscriptions you would be paying if every “free” web service charged for its services).
Americans, like most people in the world, do not understand the value of their data. It is not tangible, you cannot count the amount of data you have in your wallet. You do not watch your “data account” lose money every month or must worry about budgeting your data to use on the services you need/care about. There is no common metric for valuing data. You don’t know if your family vacation photos are worth twice the value of the Geo-location of your Instagram post or if the “like” of a charity you care about on Facebook is worth less than the Google search about “ways to fight off the cold.”
This is all, of course, very purposeful. Facebook, Google, Twitter, Amazon, Snapchat, Verizon, and the multitude of other companies that traffic, aggregate, and sell your data don’t want you to know any of this information. They don’t want you to know when and how they collect data on you, what they use it for, and (most importantly) how much it’s worth. Our lack of understanding is their gain, quite literally, and has allowed them to build what are essentially giant advertising companies misrepresented as consumer companies.
If you had to walk into a grocery store and wanted an orange, you could see the price in dollars and cents of how much you would have to pay. If instead, the shopkeeper simply said that you could have the orange in exchange for your wallet or bank account information and that they would deduct an unspecified amount of money for an unspecified amount of time, very few people would buy oranges. Indeed, if shopkeepers went around taking the wallets of people who never even bought oranges, simply because they knew someone who had, there would likely be a lot of burning supermarkets by the morning.
Yet this is exactly how these tech companies with “free” services operate. You agree that in exchange for using the service (and sometimes not even then) the tech companies can collect an unlimited amount of information about you and use it for any purpose for any amount of time. This is a scenario so ridiculous that spelling it out leaves one feeling cheated and manipulated. If Facebook, Google, and others weren’t getting more money’s worth of information from you than the cost of operating their free services, they would be worth $0 because there would be no possible way for them to make a profit. Yet these companies can make billions of dollars in profit precisely BECAUSE there is no limit on the amount of data they can collect and how they can use it.
Many of us are aware of this phenomenon. We may not have thought about it in terms of buying oranges, but still, we know how these companies work. At this point, we all know that Facebook targets us with ads based on data it collects. What so many of us fail to realize is that just because we scroll past an ad, just because we don’t click on an ad, doesn’t mean we are in our own small way rebelling against the tech companies.
When Facebook or Google serve up an ad to you, they make money and they collect data regardless of if you click the ad. Companies pay to get ads in front of you, not just to get you to click on the ad. What the companies are paying Facebook and Google for is the ability to get their ads in front of the people who are going to click on them. Even if you don’t click on the ad, that is still data for Facebook or Google. Now Facebook and Google know what kinds of ads you DON’T engage with and that is still valuable to them because knowing what doesn’t work, helps them narrow the list of things that can work. What is difficult for many of us to understand is that tech companies win no matter the scenario.
From tracking where your mouse goes on a screen, to how much time you spend deciding to click on something, we are tracked and monitored in a dizzying number of unseen ways. No matter the actions we take with each ad we are served, we give these companies more insight into us and hand over another drop in the massive bucket of data these companies hold on us.
If we assume our data has any value, even a small amount, then setting the sky as the limit and allowing tech companies to hold our data in a black box constitutes one of the greatest transfers of wealth to have taken place. We cannot even quantify the amount we are being ripped off since there is no discernible metric to evaluate the value of our data. We need one desperately. Companies shouldn’t be allowed to market their products and services as free just because they aren’t costing you one type of currency. The cost to our bottom line is real. Our data isn’t an unlimited resource we can allow to be pilfered and frittered away. It’s time for us to get thrifty with our data. It’s time for data protection laws that give us back our wallets.

Mathematician, overthinker, and Oxford comma-enthusiast. Scientific researcher at the Institute for Defense Analyses. Views expressed are my own. (He, him, his)