Privacy

It’s rather sardonically amusing that, even amid the latest uproar around giant tech companies’ violations of user privacy, most people don’t really seem to care all that much about their privacy. Exchanging one’s browsing history and app usage for free access to such great tools such as Gmail, Google Drive, Facebook and the like still seems a good bargain. (As a dedicated Google ecosystem user, I am a perfect example.) Now, it would seem like people SHOULD care more than they do. You don’t know what you got till it’s gone, right? Corporations’ and governments’ intentions may seem fairly benign now, but what could happen should we willingly compromise our complete identity digitally?

The way it appears to me is that there are a few potential paths forward. First, slowly but surely, regulations such as the EU’s GDPR are enacted that curb or at least set the boundaries for data collection and usage, and the worst remaining threats to citizens’ privacy remain governing bodies. Second, an uneasy equilibrium between governments and corporations emerges, wherein citizens gain some greater agency via market mechanisms, with incumbents cleaning up their practices in order to retain consumers, e.g. Google shifting Chrome features somewhat to forestall DuckDuckGo’s encroachment upon its turf. Last but not least, however, the status quo could essentially worsen, as the majority of consumers simply cease to care about said violations of privacy. What’s interesting about that last potential outcome is that if consumers simply begin or continue to presume that surrendering their data is the effective price they pay for greater convenience (such as more effective ads on various websites), how will it effectively translate into negative outcomes?

Presuming every centralized data hoard eventually suffers a system breach, leakage of confidential information is the most likely negative outcome that has already been demonstrated. The allure of being able to access and then auction off personal data is only likely to increase as the quantity and quality of said personal data increases. But you could argue that such an occurrence is all but inevitable. The only plausible alternative is for each person to securely manage access to their own information…which could still lead to security breaches, potentially, but at far lower probability. Few are willing to invest much time or effort in such security. So the majority of users are likely also willing to endure such occurrences, as long as they remain tolerably rare. But it’s key to note that this essential tacit auction of personal data will also only persist as long as users feel they are being compensated adequately. Amazon must continue to give Prime members discounts, free shipping, access to more channels and more, if it is to continue tracking and targeting. In fact, Amazon will likely have to ramp up its features to retain and continue to attract users, simply as Prime members become accustomed to such perks. If companies do not keep up, in short, they are likely to see their user base contract. Facebook may well face such a challenge in the next year or so on its core platform, negated only by its potential growth in Asia and Africa.

So it appears that there definitely exists a market value for privacy that we are willing to pay, but over time, scope creep among what we expect to be compensated for surrendering our personal information is to be expected. This is where things get even more interesting. Where could equilibrium eventually emerge?

All forms of digital commerce seem the most likely realm for equilibrium. Rewards and membership programs are proven to work exceedingly well, as psychologically they do not violate longstanding sociocultural norms, and usually entail only the types of information gathering that most of us are fairly amenable to (many people, for example, could presume that I am interested in exotic coffees and thrillers based on just a few minutes’ conversation). Competition between such buy-in via subscription platforms will then result in services at various degrees of convenience and varying treatments of privacy, with additional services coming at the cost of additional layers of completion to companies’ physical and psychological profiles of users.

Social media is a much trickier proposition. One of the reasons I think LinkedIn has largely escaped as much scrutiny as Facebook is a) Facebook’s more aggressive approach; and b) the fact Facebook has tried to truly bill itself as a network of true, personal connections, as opposed to business-oriented networking. Facebook shouldn’t be viewed as “feel-good” in any sense; it is just as ruthless as any other company. But the disconnect between its marketing and its unveiled reality is more jarring on some subliminal level, I believe, which provokes more visceral reactions such as leaving Facebook (or barely using it, which could still prove deleterious to Facebook’s core business, eventually). But Facebook itself needn’t perish as long it can provide a decent-enough service and clarify to users what it is really doing with its data to the extent digital commerce companies do. Again, people are willing to part with privacy to a certain extent of compensation. An amazing UI, handy events scheduling feature and easy buy-in could well prove sufficient for many. What Facebook has been failing at is figuring out where its limits truly lie.

Let’s presume, however, that the limits to not just Facebook but also other services are far less than they may currently seem. Let’s return to that original third premise wherein consumers simply cease to care really at all about privacy. What type of market compensation would be required for consumers to willingly surrender nearly all their information, if not all? Even governments don’t have that much information (at least outside of China, soon enough). I presume it would be a multi-service platform offering unprecedented convenience, with enough security cachet it could coax even wary users into compliance.

Let’s start with a base case of Amazon Prime, and dial it up to where Bezos seems to want to take it in about five years. First, groceries and basic medications would be provided for additional prices (still discounted) to Prime customers, whom then would be coaxed into giving up their eating patterns and potential additional physical information. This in turn would of course only improve the predictive power and matching of advertising within Amazon for all other products. (More vegetables being ordered? Why not purchase this scale to help with your weight loss efforts?) The next step would be a more holistic psychological profile via analysis of streaming patterns based on the types of food most recently consumed and medications taken. How frequently does this person eat junk food and then stream for 17% longer later into the night? Does this spark melatonin supplement purchases?

As you can see, the cascading effect could only continue in what would seem the perfectly virtuous cycle from the company’s perspective. The trick would be to assuage any consumer concerns by ensuring excellent quality across the board (or at least a tolerable range) as well as potentially take a radical step of providing a monthly summary of data tracked and opt-in or out…accompanied by clear warnings of what would be surrendered each time. This could best work if a company is determined at creating its own complete marketplace/one-stop shop, as opposed to serving as the entry point instead of vendor, a la Google. It could both soothe users’ fears and inculcate in them a sense of comfort that the company is always willing to engage with their needs (not to mention an illusory sense of control, frankly).

Frankly, that’s the outcome I view as most likely, simply because buying in to ecosystems is going to become nearly irresistible unless decentralization efforts can become much more compelling and of sufficient quality. It’s a bit disturbing to contemplate, but does seem more likely, given the current landscape.

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