An Unlikely Villain Emerges In The Data Privacy Debate

An Unlikely Villain Emerges In The Data Privacy Debate

Facebook has taken a lot of heat lately, as the media has turned its spotlight onto their collection and distribution of user data.

The common response to this revelation has surrounded advertising. Facebook is a free product. As with many SAAS companies, if users aren't paying for the product, it is because they are the product.

As is the obvious case with Facebook. User data is the asset for which Facebook’s evaluation is set. And while some have argued they move to a subscription model, where users pay for their Facebook account instead of being subjected to ads, there is a zero percent chance that will ever happen.

Facebook brings in roughly $40 Billion dollars in ad revenue in 2017. With 2 Billion active users, each would have to pay $20 per year for their account. Most would not do that, driving the active user count down and annual subscription costs up even higher.

As we widen our focus from Facebook, a new villain has emerged in the data privacy discussion - wireless providers. AT&T, Sprint, T-Mobile, and Verizon all collect real-time location data from any user on their network.

This data collection is done under the guise of using location data to improve their wireless service. That would be great if they were not also selling the data to aggregators who repackaged it to advertisers.

The issue to this is two-fold:

  1. Users can not opt-out. Wireless providers do not allow users to opt-out of sharing their location data - again, under the guise of improving network performance.
  2. The aggregators wireless companies are selling data to are not protecting it very well. 🚨 Understatement Alert 🚨

To give you a real-life context for this…

A few months back, I was providing AdWords services to an out-of-state pediatrics group who became very interested in hyper-geolocation targeting. They were approached by a firm who offered the ability to track users who spent considerable time in the labor & delivery wings of nearby hospitals, targeting them with ads for the pediatricians.

This kind of targeting is made possible by wireless providers and without user consent - not to mention the HIPAA implications.

Real-Time Follow Up

Regulators continue to pull the thread of the data privacy quilt. Earlier this week, the NYT reported that Facebook was furthering this incestuous mess, as they provided device manufacturers with “deep access” to user data:

Facebook allowed the device companies access to the data of users’ friends without their explicit consent, even after declaring that it would no longer share such information with outsiders. Some device makers could retrieve personal information even from users’ friends who believed they had barred any sharing, The New York Times found.

Yesterday, in a follow up piece, the NYT uncovered that four of the 60+ device manufacturers were Chinese companies, including:

Huawei, a telecommunications equipment company that has been flagged by American intelligence officials as a national security threat

Ironically, Facebook has been banned in China since 2009. Additionally, Huawei’s founder, Ren Zhengfei, is a former engineer in the People’s Liberation Army.

Just when the smoke was clearing on the Facebook fire, the ashes were stirred.

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