It was 10 April, 2018. Mark Zuckerberg, CEO of Facebook appeared in front of the United States Congress to talk data, privacy and how we should police the internet. 44 senators asked tough questions around privacy policies, business models and consumer protection. Zuckerburg answered honestly and robustly, facing up to criticism, owning up to failures, arguing for net neutrality and outlining plans to “do better”. For a nerd like me, it was fascinating. But what will it actually mean?
Is this a slap on the hand for dropping the ball and inadvertently helping to elect an unpopular president? Or is it a fact-finding mission to establish the need for and extent of legislation that could change the way the world’s biggest companies make money? My take, is, probably both. Let’s explore.
If the product is free, you’re the product.
If you were born before the internet kicked off, this is a relatively new concept. The whole idea of swapping service for data as a commercial arrangement is something most people don’t think about. But that’s how it works. Facebook, Google, Instagram, Twitter, Instagram, Snapchat, you name it. These massive ‘connection’ platforms give everyday people (and businesses) the chance to build networks. And the only cost to use them is personal data.
Challenge is, not everybody likes the idea of their data being used to help sell them stuff. It feels invasive. Zuckerberg had a brilliant answer on relevance “we know that not everyone likes ads, but we also know they like irrelevant ads even less". But his answer on opting out was less clear. Facebook isn’t a business without advertising. And there is no Facebook advertising without data. The big question is, whose data? And how are they using it?
The problem with Cambridge Analytica.
A cynic could suggest that the biggest problem with Cambridge Analytica is that they helped elect the ‘wrong’ president. But politics aside. Cambridge Analytica is a data analytics company. The questions being asked are all about where they got their data from and whether they had permission. The simple answer seems to be lots of places and probably not. Then they got busted and asked to stop doing what they do. And they didn’t. But how can one business really force another to do something that’s commercially detrimental? Ultimately, they can’t. It’s an argument for legislation.
“I’ve read and understood the terms and conditions”
The real problem with Facebook.
When you listen to his opening address, it’s hard not to feel sorry for Zuck. It’s not about the money. The world’s fifth-richest man positions himself as a nerd in a dorm room trying to make the world a better place. “Facebook is an idealistic and optimistic company,” he tells us “for most of our existence, we focussed on all the good that connecting people can do.” He lost me when he went on to claim the #metoo movement. But his point was interesting. We built something for all the right reasons and we didn’t even think about the harm.
The real problem with Facebook is its scale. That’s attractive to bad people. And bad people do bad things with good toys. Trucks are really useful until you use them for terrorism. Nuclear energy has benefits. Nuclear weapons less so. The challenge facing Facebook and Congress - and the world is that not everyone is in it for good reasons. It’s naïve to think that they are and dangerous build a new frontier without any credible police force.
The big picture for big data.
There are three fundamental business models on the internet: using technology to make efficient connections and clip a commercial ticket (TradeMe, Amazon) selling a product or service by subscription (Netflix, Xero) or building a wide audience with the purpose of mining their data and selling it to the highest bidder – like Facebook and Google.
Most people understand (or don’t care about) the use of their data ‘in platform’. But big data begins with the term “third-party”. That’s when the lines get blurred and people get cross and governments call committees to consider legislation. But it’s also the whole point of "big data". The things I know about you have some value. But the promise of “big data” is the gold mine you can open when you inferred or actual permission to cross-check one data set with another. That’s exactly what Cambridge Analytica did and the world hated it.
And that’s why the people vs Facebook is so important. Particularly in marketing. Because if more governments introduce legislation to protect consumers from big data, it will change the way businesses like Google, Facebook and their data-hungry friends do business.
That’s what I reckon, what do you think?
- Michael Goldthorpe is managing partner at Hunch.