Do People Become Products If They Use Free Online Services?
In a recent message to customers about Apple’s commitment to privacy, Apple CEO Time Cook said, "A few years ago, users of Internet services began to realize that when an online service is free, you’re not the customer. You’re the product."
This comment raises the question: Do people really become products if they use free online services such as Facebook or Google?
Before answering this question, you have to look at the ways that Internet-based businesses make money. According to a recent The New York Times article, there are only a few proven ways. Ecommerce companies such as Amazon and eBay make a profit from marketplace transactions. There's the freemium model, such as LinkeIn, which offers some features free, and users pay for advanced features. And for most companies, it more or less boils down to online advertising.
As explained in the book How Google Works, there is a differentiation between Google's users and customers. Its customers are the advertisers who leverage Google's platform to showcase ads to its users. Its users are the people who use its services, such as search and Android phones.
For a social networking site like Facebook, you are probably both the customer and the product. Facebook sells ads to its customers, who are advertisers, and uses your data as a hook to bring in the customers. So it’s not you, but clearly the data that you create that becomes a product.
The key question now is: Is it necessarily bad if people or their data are considered to be products by these companies?
It’s not the first time that people are being referred to as products. Much of the TV industry works on an advertising-funded model. The only difference is that while TV banks on viewership data, it does not necessarily use its users' data to make profits.
Online companies often argue that the free services benefit users, and advertising is one of the ways to provide value while generating revenue. The emerging social networking site Ello was built to cash in on Facebook’s perceived weakness when it comes to using users' data. Even though Ello says that it won’t sell your data to advertisers, the fact remains that it still has your data.
The purpose for which your data is used is equally important. Generally, businesses tend to categorize your data in the buckets of similar data and display promotions in an efficient way. They don’t necessarily care who you are, but if the government accesses your data, who has a larger mission of providing security and protection, then they may be interested in knowing more about you.
Interestigngly, Facebook has an empathy team that teaches employees that users are human beings. Not products? The fact remains that Facebook is free. People can join it at will, and people are not obligated to stay. Moreover, it’s not a secret that Facebook earns revenue by embracing online advertising.
Are you still comfortable using free online services?
