2018 - the year 'Big Tech' lost its innocence

Profile picture for user Jerry.bowles By Jerry Bowles December 20, 2018
Summary:

It’s taken more than a decade but government regulators and lawmakers have finally figured out how Google and Facebook make obscene amounts of money by gathering personal data from millions of users. They aren’t happy about it.

blockchain - privacy
Let's look at this from two angles.

(1) Privacy is dead

In the beginning there were cat pictures and dog pictures and cute baby pictures and a painless way to stay in touch with mom and grandma and the joy of seeing pictures that show that you are clearly aging better than the people you went to high school with. It was great fun; this being instantly connected to everybody everywhere. Getting approval in the form of “likes.” Exchanging passionate—if pointless--political opinions with complete strangers. It was addictive and it didn’t cost anything.

Or so we thought.

If you had bothered to read the fine print when you signed up you might have seen the part where it says that everything you post belongs to the company and it has the right to sell that information—as well as any other data it can glean from your likes and consumer preferences—to big advertisers so they can tailor their sales pitches directly to you. Sort of like a poker game in which you can see your fellow players’ cards, but they can’t see yours.

With more than two billion users—and millions more on Instagram and WhatsApp which it also owns, Facebook—founded in 2004--is by far the biggest and most profitable social network ever. While we were happily distracted by cat and dog and baby photos, Facebook CEO Mark Zuckerberg rolled out the most irresistible, addictive, voracious, lucrative, privacy-gobbling database monster on the planet luring billions of us into telling his company our deepest material desires which he sells for outsized profits to companies that want to know what we most want to buy.

What we didn’t know until this year—2018--is how reckless and promiscuous Facebook has been with our data. How it allowed Cambridge Analytica to game the 2016 American election. How it allowed preferred advertisers access to our private communications. How it had allowed the Russians to launch a massive disinformation campaign on the platform in the lead up to the 2016 election. Every day seemed to bring new revelations of assaults on the privacy rights of users.

Facebook has seriously damaged its business and reputation through its clumsy, tardy and totally inadequate response to a series of scandals that would have spelled sayonara for a CEO who didn’t own a majority of the voting stock.

2019 might even be worse. The District of Columbia’s attorney general has sued Facebook for allegedly letting outside companies, including the political consulting firm Cambridge Analytica, to improperly access user data and for failing to properly disclose that fact. Other states will likely follow soon.

Meanwhile the Federal Trade Commission is also investigating Facebook over the privacy scandal, which sparked greater scrutiny of the way Silicon Valley has vacuumed up consumer data.

(2) Privacy is alive

Not all the 2018 news on the privacy front was negative. The European Union’s General Data Protection Regulation (GDPR) set tough new standards for collecting and managing user data and it the world standard. It requires organizations to adopt stricter data protection policies, to document how they store, use and share personal data and review data governance principles regularly to ensure compliance. Big Tech firms are split on GDPR and data privacy regulation in general. Apple and Microsoft have earned great PR coverage for the support of regulation. Not surprisingly, Google and Facebook are strenuously opposed.

At an international gathering of data privacy commissioners, Apple CEO Tim Cook endorsed the EU’s ethics-based GDPR framework, calling it an example of how “good policy and political will can come together to protect the rights of us all.” He said:

We should celebrate the transformative work of the European institutions tasked with the successful implementation of the GDPR. We also celebrate the new steps taken, not only here in Europe but around the world — in Singapore, Japan, Brazil, New Zealand. In many more nations regulators are asking tough questions — and crafting effective reform. It is time for the rest of the world, including my home country, to follow your lead.

Of course, Apple does not collect data profiles of individuals in the first place and uses pro-privacy technologies and techniques like differential privacy, a system to minimize loss of privacy while still aggregating patterns of behavior across its user-base, which allows the company to take the ethical high road without damaging its bottom line.

The U.S. Congress has dragged its collective feet in bringing GDPR-level data protection to America, mainly because the adtech giants have been spending millions of dollars on lobbying politicians to let the industry regulate itself. The spectacular failure of Facebook to fix its own problems probably means that there will eventually be some level of federal government regulation.

Meanwhile, a few states have established their own guidelines. In June, the State of California adopted an aggressive California Consumer Privacy Act that gives California’s 40 million citizens the right to see what information is being collected about them and rights to request that data be deleted. They will also be able to find out whether their information is being sold to third parties including advertisers and to request that they stop doing so. With the notable exception of Apple and Amazon which favor better user data protection through regulations, Big Tech has sought to appear cooperative, while taking a sudden interest in Federal regulations which they hope to water down and make less rigorous than California’s rules. See article here.

California also led the nation in writing its own net neutrality laws after the Federal Communications Commission dropped nationwide protections last year, citing the supposed regulatory burdens they had caused for the telecom industry.

The new California law prohibits Internet service providers from blocking or throttling access to sites and services, slowing down web connections or charging companies for faster delivery of their movies, music or other content. Smaller web firms worry that they do not have the resources to pay telecom giants to make sure their content is seen. The law also bans carriers from exempting apps from counting toward consumers’ data allowances each month (“zero rating”) if doing so might harm other companies. Perhaps, predictably the FCC is suing California to rescind the law.

My take

2018 has been an eye-opening year for Big Tech companies, government regulators, and many users who have come to realize that they are the product—not the customers of Google and Facebook and other practitioners of surveillance capitalism.

Will all this sink Facebook and Google? In the end, users will have to decide whether they are more concerned about their personal privacy or the convenience of the Google search engine and the community, and the cat and dog and baby pictures of Facebook and Instagram. Guess which one this student of human nature is going with.