If You Think The Reason Internet Companies Snarf Up Your Data Is Because Their Services Are Free, Allow Me To Introduce You To The Telcos

from the free-is-not-the-problem dept

It's been a few years since this kind of argument has come up, but it's one that we've had to swat down a few times in the past: it's the argument that somehow if a company offers a service for free, it means that they'll absolutely snarf up all your data, and that requiring services be paid for directly by users somehow would fix that. This is easy to debunk in multiple directions and yet it still pops up here and there.

The latest is from the technology columnist for the Wall Street Journal, Christopher Mims (whose work I usually enjoy). His latest (possibly paywalled) piece is called, Why Free Is Too High a Price for Facebook and Google with the subhead reading: "Most of the ills traced to these companies are a direct consequence of their no-cost business models." Here's the crux of the argument:

In fact, most of the ills traced to these companies are a direct consequence of their “free” business models, which compel them to suck up our personal data and prioritize user growth over the health and privacy of individuals and society, all so they can sell more advertisements. They make money from the attention and in some cases the hard work—all those status updates, videos and likes are also a kind of uncompensated labor, if you think about it—of their most devoted users.

Of course, it seems rather easy to point out why that's wrong with two examples. First we pay for other services such as our broadband and mobile data providers and they are so much worse on the privacy front, it's not even remotely comparable. It's not as if magically paying for the service has stopped AT&T or Verizon from being horrific on the privacy front. The snarfing up of data doesn't go away if you pay for services.

Second, there are businesses that have been built on giving away free tools without having to snarf up your data. Indeed, that's actually how Google succeeded for much of its early history. It didn't need to know everything about you. It just needed to know what you were searching for. And that was massively successful. It's true that, over time, Google has moved away from that, but others (like DuckDuckGo) have stepped into that space as well. DuckDuckGo is free, and I don't see Christopher Mims concerned that they are magically "compelled to suck up our personal data."

As the saying goes, correlation is not causation. Just because Google and Facebook offer both free services and collect a lot of data, does not in any way mean that one automatically leads to the other (or that removing the "free" part lessens the data sucking).

Much of the rest of the piece is quite a thoughtful look at questions around big tech and antitrust -- which I appreciate -- but then it jumps back into these inevitable claims about "free" including the positively bizarre suggestion that free services undermine democracy. Seriously:

When an online service must be paid for solely through advertising, the company’s overriding incentive is to increase engagement with it: Users see and click on more ads. This drives all sorts of unexpected outcomes. Owing to its engagement-maximizing algorithms, Facebook appears to bear, by its own admission, some responsibility for a genocide in Myanmar.

Other well-documented ills that may have been exacerbated by Facebook include the erosion of global democracy, the resurgence of preventable childhood diseases and what the company itself acknowledges may be wide-ranging deleterious effects on the mental health of millions.

On YouTube, Google’s engagement-maximizing algorithm has been recommending material that denies the Holocaust, Sandy Hook and other tragedies, as well as white-supremacist content and other forms of hate speech, a policy the company on Wednesday pledged to redress. Over the years, YouTube has been criticized for other practices, from driving viewers to the internet’s darkest corners to pushing questionable content on children. Meanwhile, the globally dominant Google search engine has had a hard time avoiding accusations of bias in its results.

Except, once again, this seems like a correlation/causation error. Indeed, there's a strong argument that these "wide-ranging deleterious effects" on mental health or democracy are the kinds of things that would create long term problems for these companies (which does, indeed, appear to be the case). Any company that takes a longer term view of things would recognize that if the platforms optimize in a manner that creates serious problems for the world, that can't be good for long term business, and they can and should correct. Indeed, that's exactly what these companies have been struggling to do over the last couple of years. And it's got nothing to do with their services being "free."

There are plenty of reasonable questions to ask about the power and position of Google and Facebook. And there are reasonable debates to be had about antitrust and the impact of these services on the globe. But tying "free" into the equation without any evidence that that's the problem (and, in fact, with tons of evidence to suggest "free" has nothing to do with any of it) doesn't seem particularly productive.

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Filed Under: business models, data, free, privacy, subscriptions


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  1. identicon
    Anonymous Coward, 11 Jun 2019 @ 12:02pm

    Re:

    Yeah, and remember when "pay" TV meant it was commercial free because you were paying for it?

    That used to refer to stuff like HBO, but people have extended the term to refer to all cable TV. Cable TV was never commercial-free. The free-to-air channels were the main feature from the beginning.


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