Reading time: 3:45min | How Big Data monetises old ideas.
This article is a follow-up of the article You can’t sell yourself into slavery. I wrote:
With Big Data, with Facebook, Amazon, Google and many others, an authoritarian state within the state has already emerged that knows more about us than our doctor, lawyer, siblings, parents and children, even than we do ourselves. And it makes enormous money, more than any other industry with the most significant growth rates, as much as entire economies. Where money is earned, power accumulates. At the end of the development, the question will come up: democracy or oligarchy. In Russia and China, this question has long been decided.
What is the business model?
Imagine tomorrow the post office decided to stop selling stamps. To get our letters delivered, we would have to agree to have a postman accompany us at all times, scouting out our movements, locations, preferences, etc. Besides, the post office is also allowed to know what is written in our letters. With our consent, the post office can then sell all this knowledge on the market, but we don’t know what knowledge about us they will sell exactly and to whom—absurd idea.
That’s precisely what Facebook is doing digitally. What’s more, it has developed the Post’s service of only sending letters further and offers to make our letters publicly accessible on a large pinboard. That goes down well with customers.
In the process, Facebook learns a lot about us. Facebook knows where we live, what our name is, how old we are, what sex we are and 1,000 other things that you can learn from other people if you want to spy on them and subject them to constant research. The fact that Facebook also knows what we post on our wall in the marketplace is the least of it. Why does Facebook do this? Because otherwise, Facebook wouldn’t earn any money. That is because the service, i.e. the pinboard and the sending of letters, is offered by Facebook for free. That should make us suspicious. After all, how can it be that a company whose service costs no money is making billions in profits?
Perhaps Facebook’s business model is not the provision of a digital pinboard and a digital mail service, but rather the harvesting of user data to sell it as profitably as possible. Facebook’s beautiful portal is a pretty glass bead palace that covers a vast and mean machine underneath. A significant part of the marketing effort is to disguise the true business intentions. Against this background, the unbelievable Cambridge Analytica data breach must be seen as a PR disaster and not as an unfortunate slip in the business model, as it was the case with the VW diesel scandal. Facebook’s first consequence of that case is an improvement in the obfuscation of the business model and a polishing up of the glass bead palace. The result at VW, on the other hand, was a further push of the business model in the direction of climate-friendly e-mobility.
Disguising and hiding the real intentions are also the essential part of the corporate idea at Google, Amazon, Instagram and others. Amazon’s glass bead palace is its retail shop and video-on-demand service, and Google’s bait is the search engine.
Which brings me to external costs. What does it cost us when others can sell and distribute our data at will? Just the lost money for our freely given data? Our freedom of expression because we are manipulated with personalised advertising offers? Our political culture because filters pack us into digital communication bubbles? Or our democracy because rich and powerful corporations are gaining an influence that our political systems can no longer contain?
In Germany, we anticipate for the damage of the climate gas CO2 external costs of at least 800 billion euros by 2050 assuming we’ll comply timely with the Paris climate agreement. Currently, we are estimating how these external costs, which the public must pay, can be attributed to the polluters to keep the damage as low as possible, e.g. through CO2 taxes or CO2 certificates. That way, the chances are high that CO2 emissions will be reduced to such an extent that by 2050 we will have a climate-neutral economy and comply with the Paris climate agreement (but still have to pay the 800 billion euros). Such developments do have an impact on the economy. The current economic model of oil companies has little future. But other sectors, other business models that do not depend on the production of fossil CO2 will emerge. We are evolving.
Similar to how Big Oil didn’t and still does not include the external costs of CO2 in their business model (petrol was and still is too cheap — and huge fortunes have been made at the expense of the climate and humanity’s future), the uncanny success of Big Data today shows similar circumstances: our data is far too cheap (in any sense, not only monetarily), and there are incalculable, external costs that we all have to pay at some point. Either we make personal data more expensive, say through a data tax, or — my favourite — we declare personal data inalienable and remove personal data from the economy. For example, I can sell the relationship to my car, but I cannot sell the relationship to my daughter.
Facebook and Co. will do everything in their power to prevent the shutdown of their user data gold mine. And in doing so, they show their true colours: they are totalitarian, undemocratic, authoritarian, misanthropic. And they have human faces: Marc Zuckerberg, Jeff Bezos, Larry Page and many more. And they all lean politically towards a liberal, progressive view on the world. It might be worth to assess what liberal and progressive means.
Ok. What should we do? First, we should be avoiding Facebook, don’t shop at Amazon, swapping Google for Escosia, deleting our Instagram account, getting rid of Android, stop using WhatsApp. The two tech giants Microsoft and Apple (both no saints, hello tax avoidance) have so far, at least, resisted the temptation to get rich off their customers’ data. We should acknowledge that.
And then it’s up to us, and thus up to the politicians. Whoever makes a clear policy for the security of my data gets my vote. That brings me back to the good old postal service. Just as the secrecy of correspondence and telecommunications is a protected, inalienable fundamental right in free, democratic nations, we should also make data secrecy a fundamental right.
Shell and BP, by the way, have been successfully investing in renewable energy production for quite some time and are adapting to a climate-friendly economy. Amazon, Facebook, Google and the other data thieves should also succeed in a similar transformation by adjusting their business model to a human-friendly approach. Then democracy and our freedom will have a chance to survive.