A new $5B privacy market

When Facebook stashed $3B-$5B away for its upcoming privacy fines, I visualized a bunch of government officials and corporate lawyers jumping for joy. A large bag of money is about to show up at their doorsteps!

Cambridge Analytica is a case study pointing to a massive problem with huge monetary rewards to anyone who can solve it – and it’s expanding. Internet users, by default, are too trusting of free services they find online. The ease of using a free product blinds many of us from scrutinizing the product’s true cost. When you can’t identify what there is to lose, there is only upside and gain from something free.

Big tech companies use their branding and “free” prices to instantly gain user trust, creating “hidden prices” that tech companies monetize through marketing/ad based revenues. Think about any time you:

• Like something Facebook
• Search for something on Google
• Buy something through an iPhone app
• Watch a video on your Xbox
• Tell Alexa to schedule something on your calendar

It’s all getting tracked and logged in a database somewhere. It’s not that this behavior is creepy, it’s just up to the user to decide if it is. That’s what tech privacy means, giving the user a chance to opt into what data gets logged (and what doesn’t).

Cambridge Analytica teaches us that most users don’t know what they are opting into and how that data can be used for or against them. Additionally, the users that opt into giving this information have no way to evaluate if these companies are capable of keeping their data safe from other parties that may want access to it with malicious intent.

Since most of the public cannot knowingly understand the inner workings of the services that they use online, the only thing a user can do is trust the tech company to: 1. only use data for its purpose and 2. protect their data from those that want to steal it.

In recent weeks Google, Microsoft, Amazon, and Apple used their marketing channels to reassure users how they take privacy seriously (even though nothing has really changed).

Given these messages, it’s clear the privacy movement is completely misunderstood by the public. Companies can get away with this messaging primarily because the public doesn’t know how any of the underlying technology works and what these companies are changing.

And why would users know this? Users don’t want to learn about privacy or how the technology works. Users ultimately want to use good products and trust those services ethically do the right thing with their data. I’ve spent 10 years in the industry and still find myself learning something new every day about how this technology works. It reminds me about the 2008 economic bubble around mortgage backed securities – most people don’t know what they are, they just know it was the problem.

Honestly, I’m glad that Facebook made this “mis-step”. It gave the public something to look at (even though they don’t really know what they are looking at), and, at a very high level, see how their data could be mis-used. I personally think that Cambridge Analytica is blown way out of proportion and Facebook was unluckily caught in the spotlight; Snowden’s report on Prism was a much more serious example of what could be done with participation from Google, Apple, and Microsoft.

So what now?

The government will probably end up forcing some kind of control around Facebook to hold them “accountable”. But let’s ask ourselves, what will that get us? How is that different than Prism? How can we hold the government accountable? Will that lead to a government similar to China, where officials can simply demand WeChat give them access to the country’s individual activity? Big brother will always be watching us in this scenario.

User education isn’t an option either. I don’t think users have the time to educate themselves. Nobody wants to spend their time doing that.

The real answer is well…the $5B answer. Ultimately, what is the best solution to hold these companies AND the government accountable? What comes next in this market will be truly interesting both for an entrepreneur and everyone that uses the internet.