Facebook and the dark side of data

It is easy to go for days or weeks without realising how fundamental trading in our personal information has become to the functioning of some of the biggest companies in the world, and in many ways to the functioning of the world economy itself – but trading in personal data has become the business model of the internet, and as the internet has grown in importance, it has become core to the global economy.

We use services such as Google search, free webmail, Facebook and Twitter every day without paying a fee to any of them – but each company spends millions every day in costs to deliver these services. Whether paying for the cost of data transmission, hosting, moderation of messages, or customer service, none of what we get for free comes cheap.

The reason we don’t pay for it is that in the online economy most of us are not the customer of the tech giants – we are the product they sell. By packaging our interests, estimates of our locations, earnings, and more, to advertisers, companies that have never charged a penny for their core services are now some of the world’s biggest. Last year Google’s revenues topped $100 billion, while Facebook made more than $40 billion – all without charging the vast majority of their billions of users a penny.

This is the backdrop to the scandal engulfing Cambridge Analytica and Facebook this week: across the world, outraged headlines are talking about how the data of 50 million people was harvested – many even talk of a ‘data breach’ – in order to send hyper-targeted political adverts in the 2016 US primary elections, and then the presidential race.

The scandal creates a huge dilemma and challenge for Facebook, Google, and thousands of other companies working in the advertising and information economy – which globally is worth trillions of dollars.

The data collected by Cambridge Analytica was harvested to help the company better target its political adverts and messages online to people likely to be receptive to the messages that they send.

Creating well-targeted adverts is the core of the entire online advertising industry, and the business model of almost all of the largest online companies (barring Apple, which makes money selling us premium devices) – so if the public is outraged by Cambridge Analytica’s targeting efforts, the entire online industry will have to ask itself serious questions.

There are many ways in which what Cambridge Analytica did was not business-as-usual. The way it built its database of 50 million users, mainly in the US, will feel unethical to most of us, whether or not it is eventually found to have breached the law in the US or UK.

The data was harvested through an online personality quiz, which offered a financial reward to anyone taking it, which was eventually taken by 270,000 people. The quiz, however, did not just collect the Facebook information of the people who took it, but rather used their profiles to collect information on all of their friends. As the typical Facebook user has more than 300 friends, this let them amass data on more than 50 million people.

The risk for the online giants is trying to work out which bits of what is happening is the cause of public outrage. If it is the collecting of data from public Facebook profiles without consent, the fallout of the scandal might be quite containable for them: Facebook changed its rules on how apps collect information several years ago to prevent this type of collection, and has suspended Cambridge Analytica from its platform.

If, though, people aren’t happy about the way their social media profile is used to make guesses about their personality, interests, income and more, to send personalised adverts, then huge global industries have a massive problem – as Cambridge Analytica is not known for doing anything particularly special or unusual. All political campaigning companies try to send specifically targeted adverts, as do all other marketers. If the public aren’t happy with how the data is used in this instance, there is much more going on that is viewed as business-as-usual which could cause a backlash: companies trade in our online and offline information to try to match our social media profiles to our real world identity, often including our address, profession, and sometimes even credit score.

Cambridge Analytica has emerged as something of a malevolent clown show, particularly in the light of the dogged reporting of Carole Cadwalladr in the Observer, the claims of whistleblower Chris Wylie, and, most recently, Channel 4’s release of secret filming of executives from the firm speaking to an undercover reporter posing as a fixer for a wealthy client hoping to get candidates elected in Sri Lanka. Cambridge Analytica denies any wrongdoing and says it routinely undertakes conversations with prospective clients to try to tease out any unethical or illegal intentions. But the firm’s sales pitches appear so wildly boastful – and their lack of scruples so obviously on show – that it is hard for them to now try to claim that they didn’t really have any special powers versus other advertising and consultancy firms. Few people will shed a tear if the company folds among this scandal, as seems all but inevitable.

But in reality, the company was almost certainly not the reason Brexit happened, or the reason Donald Trump got elected – they were just one company among hundreds working in the new online advertising environment. The most alarming thing for us as consumers – and for the multi-billion dollar information industry – isn’t the ways in which Cambridge Analytica were egregious. It’s the way in which they were mundane. This may be the crisis that forces us all to engage with an internet reliant on trading our personal data. Did we really know what we were giving up when we clicked ‘Yes’ on the terms and conditions during sign-up?