The Privacy Bargain

All lasting social contracts must provide benefits to those who engage in them. This is common sense, right? If some parties receive no benefits in the bargain, the contract has a way of evaporating quite rapidly.

Social contracts work best when the benefits are clearly laid out. You pay your taxes and the government ostensibly protects your property, your greater economic interests, and even your life. It’s not entirely unlike Big Al’s cousin Vince and his baseball bat offering you protection for a modest fee, except in Vince’s case the only benefit is an absence of malice. The government does actually do some good for people, which is why we elect to keep it around, even though we may occasionally elect professional clowns who undermine that goal.

When it comes to internet companies, the bargain should be even more explicit. Many of these companies don’t bill you, so the true cost  (and I guarantee there is is one, if there is a benefit to the company) is murky at best. For Google, the employees honestly believe (and they could be somewhat right) that serving you better, more relevant ads is in your interest and is therefore totally win/win for everyone. If more relevant ads means fewer ads, then I’d tend to agree.

Of course, they make billions of dollars off your eyeballs and you may save only a little time or effort, so it’s hardly a 50/50 split. Microsoft is a little more up front about the bargain. Use Bing to buy stuff, they say, and they’ll give you a small cut of the proceeds, some "cash back." Well, they can certainly afford it. Who knows if it’s working, but at least it’s the kind of bargain I can get behind.

But Facebook is another story. I’ve been getting a lot more friend requests lately, and I never turn old friends down, even though I don’t ever use the site for actual social networking. I’m willing to grant Facebook knowledge of whom I know, but little else.

Why? Because they don’t offer much of a bargain. In fact, it’s kind of crappy.

Their terms are basically this: tell us everything about yourself and we’ll use that for whatever we can dream up to make money with your info. Oh, and you get the opportunity to talk more often to your friends, whom you knew before Facebook but it was just too much trouble to keep in touch. So hit the ‘like’ button and we’ll do it for you.

Let’s face it, we’re lazy. And for our sloth, we grant Facebook a virtual monopoly on our personal social data, which is invaluable to any company engaged in marketing. How invaluable? Knowing who and what we like is a recipe for picking the best ad to show us, which equals big bucks because companies who sell things will pay a much larger percentage of their profits for a more guaranteed sale. Just ask Google. This is a sixty billion dollar bet. This is gold.

But is the bargain even real? I could (and did) write algorithms to take your social graph, find who you trust and how you trust them, and basically automate the process of recommending things from friends, friends of friends and so on — i.e., automated word of mouth, like the stuff we do every day when someone suggests a restaurant.

Next up after that, one could imagine automated wall and status posts, making it clear to all your friends how much you value their friendship using some AI agent that comes up with interesting things on your behalf. No, I’m not working on that. I work in XBox now, where you may simply choose to pay us for entertainment — a much more straightforward bargain.

So let’s recap. The benefit of Facebook to you is the feeling of social connectedness. The cost is your privacy. The benefit to Facebook is billions of dollars from people who want to sell you something.

Let’s ask Eric Schmidt, CEO of Google, about the subject of privacy:

…Google CEO Eric Schmidt (who once blacklisted CNet for publishing info about him that was found through Google) in a CNBC interview recently said, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” Eric goes on to say, “But if you really need that kind of privacy, the reality is that search engines – including Google – do retain this information for some time. And it’s important, for example, that we’re all subject in the United States to the Patriot Act… it is possible that that information could be made available to the authorities.”

Ah, there’s the government again. So not only is every drunken photo going to wind up in a job application file some day, but we have to now consider that some future authoritarian regime will use whatever we say or do to find us worthy of investigation or worse because simply of who we know, what they did or didn’t do, etcetera, ad nauseum. What you say or do now will be known forever, and you’ll have no chance to go back and retroactively delete what you don’t want out there.

There goes the tin foil hat alert, full glint, right? Unfortunately, this scenario already happened, not too long ago. The Bush administration collected call records from our phone companies, not the contents of the calls (though maybe that too in too-broadly a manner), but at the very least the database of who called who — in other words, the social network, of the same sort that Facebook collects. Phone companies are theoretically regulated from abusing your call data to make money. Facebook, not so much.

Anyway, on a cheerier note, there’s a pretty simple solution to this whole privacy mess. Facebook, Google, Microsoft, and others should declare that any user data they collect from or about you is implicitly owned by you, licensed to them for certain business uses, but all other rights are reserved by you. That’s it. That’s the world’s biggest change in terms of service since the EULA began. Treat your data like property, which it essentially is.

What it would do is require companies to be explicit about what rights they want to take from you, and you could consider more carefully whether it’s a bargain or not. Companies would also have a much higher burden to give your property to the government. It’s your property, after all, not theirs. And companies would become more like banks (not that banks are the shining star of industry at the moment) in that banks have a contract to protect and return your money when you ask, though they can use your money/data to make money/data as long as they provide interest, dividends or similar in return.

To the extent that investment banks bet against the better interests of the economy they operate in, they broke the social contract. To the extent that Facebook poisons the well of trust about what can and can’t be shared online, they do no better than Goldman Sachs. Facebook doesn’t yet have a license to print money, run their loyalists into key White House roles, but give them enough time and they will.

Yes, in that not too distant speculative fiction future, we’ll all be required by law to have accounts, record our daily thoughts and activities, and our automated friend bots will tell everyone how much we love them.



* as always, my opinions are my own and not my employer’s.


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