In the past few months, big technology companies have been trying hard to differentiate themselves from one another — and from the privacy scandals that have dogged Facebook in particular. The social media giant has come under fire most recently for blurring the lines between its own platform and those of Instagram and WhatsApp, which it acquired in 2012 and 2014 respectively. It announced plans last week to combine user data across all those platforms. This will benefit Facebook financially but also potentially undermine privacy, since users will be tracked in ever more detailed ways. It comes just as the company has also blocked the functioning of apps that enabled transparency campaigners and investigative journalists to track how Facebook users are targeted with adverts based on their usage patterns.
This is all part of the company’s defence of what academics such as Shoshana Zuboff call “surveillance capitalism”. User data is the most valuable commodity for most firms but for consumer-facing platform technology companies it is the only thing that matters. Personal data is valuable on its own but has combinatorial value when collected from multiple sources. That is why Facebook is pulling together user data across apps. The more detailed an assessment it can make of user behaviour, the more targeted advertising it can sell.
But this is also one of the things that creates the biggest antitrust and privacy worries around Big Tech — many in Washington and Brussels policy circles think, with some justification, that Facebook’s acquisition of Instagram and WhatsApp should be revisited. The fact that Facebook is trying to ringfence even more user data while making it tougher to see how much it is profiting from it is one reason why politicians such as Senator Mark Warner are working on data transparency legislation that would put a price on user data and force companies to disclose it.
This is also a reason why some tech companies, most notably Apple, Cisco and IBM, are calling for a US version of Europe’s General Data Protection Regulation. These companies have business models that depend less on the monetisation of consumer data via targeted advertising, and are eager to try to head off tougher regulation — such as the data rules proposed by the state of California — by backing a national standard around privacy regulation.
Of course, these companies are also lobbying for rules that limit what counts as personal information, how much power regulators would have to enforce any new rules, and how much liability companies would face for data breaches. Yet the very fact that the industry is now calling for data privacy regulation underscores how contentious the issue has become.
It also draws sharp lines between Big Tech players that have decided that it is in their best interests to back federal regulation, and those determined to fight it at all costs. Consumer-driven platform companies such as Facebook and Google are on one side of the debate. More business-oriented companies like IBM and Cisco are on another. Apple, trying to brand itself as a “device” company, rather than one that depends on user data, falls into a third bucket.
What is clear as the industry’s views on regulation diverge is that data is an asset, the most valuable one in the digital economy. Data should be treated as such, by companies, regulators and users. Fairly valuing digital transactions or assessing the behaviour of the world’s most valuable companies will require far more transparency — of the sort that companies such as Facebook are assiduously trying to avoid.
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