“Information is power. But like all power, there are those who want to keep it for themselves.” This is how Aaron Swartz‘s Guerilla Open Access Manifesto begins. His manifesto concentrates on free access to scientific publications. I certainly sympathize for that view, but that is not exactly the topic I want to talk about. The idea of this post is to start from the quotation above and analyze it in the context of personal data. This topic has been in the spotlight for quite some time now, in particular after the NSA scandal. However, here I am not directly concerned about governments collecting data for intelligence, I am more concerned about firms whose business is strictly related to data collection.
With the risk of stretching things a little bit, it seems to me that we are slowly going towards a society that is divided into two parts. Those who own behavioral information about their users and the users who provide it. This to me is somehow reminiscent of the class division that was experienced during the first industrial revolution. By analogy with capitalists and workers, I am going to call the information owners, informationists, and the people who provide the data, users (in a first version of this post I tried to called them “daters”, that in my opinion was a more appealing name, but then I realized that they sounded more like latin lovers than data providers). Some people might argue that this has always been the case: To a certain extent, companies has always been informationists and consumers has always been users. Companies always tried to collect as much information as possible in order to target their products and price discriminate among consumers. For example, a thing that few people know is that the message: “This phone call may be recorded for quality assurance purposes”, does not imply that there might be a supervisor listening to the phone call, or that the phone call is going to be used in some training session. In many cases, it actually implies that the conversation is used to train an artificial intelligence that listens to customer calls together with the operator and based on her tone of voice and answers, it suggests which offer the user is more likely to accept. So, it is probably true, that even more traditional businesses have always collect data about their costumers to target their products, but in the last 10 years, thanks to the Internet and an exponentially increasing computational power, informationists have been able to collect an unprecedented amount of information about the behavior of their users. Now, they do not only know what products I am buying, they know when I wake up in the morning. Moreover, the business model of informationists is completely different. Traditional companies collect information to sell real products, informationists usually offer free products to collect behavioral data. Data are no more the mean, they are the goal. Just last week IBM announced they are going to offer an AI service in the cloud to allow mobile developers to make use of artificial intelligence more heavily. Artificial intelligence needs user data in order to learn and do meaningful things.
Now, do not get me wrong I do not want to sound like a Luddite. I think this process is irreversible (like industrialization was) and that is actually going to be beneficial for users in the long run. However, I reckon that this process is not free of difficulties. Control of something like behavioral data might be quite dangerous and create big differences between who has access to the data and who has not. We should start studying more closely this phenomenon and similarly to what was done in the last century create some sort of associations to protect users rights. The power of informationists comes from their monopoly over information. What if users started collecting data themselves in a systematic and anonymous way and share them freely? Similarly, we might need commissions that monitor what kind of data are collected and for which purposes. It might be said that this would slow down innovation, but in the end medical/pharmaceutical research has had to comply with pretty high ethical standards for some decades now and, still, it remains a quite innovative field. At least, we would probably need independent people (i.e., people not paid by informationists) who start thinking about some issues related to AIs that are more and more able to predict our behavior (see for example Google Now) and therefore, potentially, to behave like us. For example, what is going to happen if we were to reach a point close to the technological singularity? Who would be in charge? Should development be stopped at that point? Governments should probably be responsible to provide answers to these questions (in the end it is key for their survival, too), but I doubt that we are going to see any step in this direction as long as policy makers do not even know the difference between the IPv4 and the IPv6. I am not saying that everyone should know it, just someone in the legislative process. But this is probably going to be the topic of another post.
Thinking in these terms gives a whole new view of high-tech companies. When Facebook was quoted on stock markets its market capitalization was around 90 billion of dollars (more than 170 now). Some people started screaming “Bubble!” and, to be honest, I was one of them. I could not understand how a social network like Facebook which at that time was not doing much profits could be quoted that high. Rethinking about this now, I was looking at the thing from the wrong point of view. “Information is power”. And power easily transforms into money, I would add. It is not important how much actual money a high-tech company is doing. An informationist by its own nature is only concerned with the number of users it has. That is the only thing that matters. Sooner or later those data will become of some use. Maybe (probably) in ways we have not thought of, yet.
“An informationist by its own nature is only concerned with the number of users it has.”
Indeed. In fact, the only way I am able to get a WhatsApp valuation that squares with what was paid out is on a pure user-growth perspective.
The doubt I have is on the lasting value that an individual user has for an ‘informationist’. Facebook can advertise and it can add value by personalising the adverts a user is shown. GM, say, can display ads to a demographic that is more likely to react to an ad so it is worth the value for them. But in a broader picture, what could the value to GM really be of owning my personal data?
So what if General Motors knows how many times I brush my teeth every day or where I am exactly and how often? Maybe the data is only meaningful as brokered by a middleman who specialises in collecting it. In some sense it could well mirror the value of a merchant in the oil industry – making sure X barrels get from A to B as cheaply and safely as possible.
And here’s another hypothetical – suppose GM collects intimate personal information about how you use a car. It does this for millions of vehicles on the streets. Conceivably it could use this data to see what works and what doesn’t and tweak next years models. But assuming it relies on averages or clusters of data points, it’s still only really catering to the lowest common denominator which is exactly what it does today anyway. So what is it worth to a company to know everything about everyone?
I suppose I ask these questions because we are still only in the infancy of the real ‘data age’ and I can’t believe that advertising is the only business model that is going to provide lasting value from the deluge of information.
Yes, I totally agree: for traditional firms (let’s stick your example and use GM) additional data have only limited use. But, pay attention, in my definition, informationists are exactly the middle men you are describing: companies like Facebook or Google whose entire business is based on data collection. Informationists typically offer free (or at production price) products just to collect behavioral information about the users. That is the only thing that count for them. On the other hand, if GM was to collect data to, say, produce cars more appealing to the consumers, the goal would be to sell more cars _thanks to_ the data and not sell more cars _in order to_ collect data. I think this is a key distinction between traditional firms and informationists.
Now, you might ask: Why are they doing that? Just to target ads? That is a good question and I think you have a good point when you say “I can’t believe that advertising is the only business model that is going to provide lasting value from the deluge of information”. Maybe they have a plan but they need more data and/or computing power to put it into place. More likely they don’t know either. What they probably know is that information is power and sooner or later these data will come handy… somehow. And, in the end, why should they bother why they are collecting so much data as long as they are making billions of dollars in ad revenues? Still, my concern is that when they’ll exactly figure out how to systematically use the data they have in their hands is going to be big and we will be unprepared to deal with it just because we never thought about it.
I would like to start from a fact: I personally don’t care if evil companies know at what time I brush my teeth. And nobody cares. That’s the problem. When we provide our personal data to companies (in exchange for the possibility of using frivolous apps) we generate an externality. No company would have an incentive to collect information about me if she didn’t have access to information about millions of other users.
My guess is that users differ from workers exactly in this dimension. Workers could strike for their right to be provided medical insurance and a 40 hours weeks, that is, to have drastic improvements in their life condition (ok, this is not what Marx was looking for, but this is what happened anyway). What should users fight for? Maybe their right not to use social network? At most, their right not to have their hygiene time recorded?
So far, no internalization, no solution.
Anyhow, great post. I hope this weblog keeps such quality forever.
Actually, I wouldn’t label informationists as evil. On the contrary, I think that technologies that make massive use of behavioral data might be beneficial for our future progress and well-being. Also, I completely agree that the incentives that users have are different from those that workers had a century ago. Still, there are risks involved in this transition, risks that go well beyond the lack of medical insurance: Where do we stop the development of AIs? Should we stop it at a certain point? What is ethical and what is not in this context? Who’ll be the owner of these AIs? Google? I don’t have an answer and I recognize that it is unlikely that the answer is going to be given by a single user (as you say because of a lack of incentives). That is why I think it should be the role of (the) government(s) to institute a committee to start thinking about these questions, so that when (if) we reach (say) the singularity we will not be caught out of balance.
I am glad you appreciated the post, jump on board and I am sure that the quality will only increase.