April 29th, 2010



Privacy is Expensive.

All of the commentary around the recent Facebook announcements from their f8 conference has been really fascinating (Senators care?), specifically the relationship between the new FB and privacy. It just seems to me that FB is under absolutely no obligation to provide any sort of privacy protection to its users.  It’s an opt-in service. It’s free to sign-up and their site is awesome!  Photo sharing is so fast and all my friends are on there!

But wait, they employ approx 1000 people, prolly more at this point. They are a business. So if I’m not paying them anything, how am I in any position to make demands?  Sadly, although I am every bit as “entitled” as every other Gen-Y-er out there (thank you Jason Calacanis), I really can’t.

If their business model is to take my data and do whatever they please with it, I have almost no negotiating power to tell them to do otherwise, except maybe delete my account and try to convince my friends to do the same. Like any other business, if you don’t like what they’re doing you vote with your feet.

I don’t think “privacy is dead”, but I do think that just like in the real, physical world, privacy is expensive. And the internet is moving that way.

If you want to eat at a restaurant in a room all by yourself, you have to pay extra for that. If you want a house that’s so secluded that you can’t see any of your neighbors, you pay for that too.  If you want your phone number unlisted?  Extra $$$. Security systems, big hotel rooms, etc. etc. etc. all require cash.

So then how is it that privacy on the internet is anyone’s obligation?  I love privacy and I love all those internet business that don’t sell my email address to porn and Viagra peddlers. But they don’t do that because they have to – they do it because it has been a competitive advantage to do so and telling your users that their data is safe with you is a way to get more users (and in my opinion part of what makes the internet great).

While Facebook started out by exploiting this desire for privacy, I think they’ve realized that it’s just not a sustainable business model – privacy costs money, yo! And living in an internet utopia sponsored by Digital Sky Technologies just can’t last forever.

What this change has created – in my mind – is a very unique opportunity that I’m sure many savvy entrepreneurs will exploit.  As much as I hoped the internet would continue to remain this amazing force where privacy is assumed and valued and treasured, I think that – just like in the physical world – privacy will become something strictly available to the haves, and there will be this new kind of “digital-divide” where instead of just an issue of broadband access, it’s a divide centered around the types of services that you use and their level of privacy.

It’s an unsettling thought, because for me the reason why I love the internet as an industry is because of its quirky dissimilarity to real-world businesses, and I really hoped it would stay that way.  Guess I was wrong.

Share This Post:

         
  • GlennLEU

    Facebook wants to kill privacy and become the store for all data online, but thankfully at least we have the option of restricting what information gets placed on our walls and block people. Unfortunately, while facebook has been doing this, sites like http://www.dirtyphonebook.com are letting people post anything about anybody online and there's no way to remove data from there. Now that to me is frightening.

  • Jameson

    This post seems to be disingenuous. When facebook started it was a walled garden and privacy to some extent was not only expected it was automatic due to the restrictive nature of signups. The users that are on the site today may have very likely joined prior to Facebook performing many of their unannounced, or poorly announced privacy removal updates. This is very often where the expectation of privacy comes from.

    The issue needs to be looked at from several angles. One of the largest potential revenue sources for Facebook comes from locking people into its platforms, especially by providing identity and authentication ability. As Facebook has opened up the data of their users to application developers, advertisers, and anyone else with money to spend they have not been up front about what information would be publicized. Facebook has also gone forward with an opt-in default configuration for these changes in the US but opt-out for countries that have privacy laws disallowing these changes without an opt-in. This, in my opinion, shows that Facebook does not have their users interests in mind at all and are simply trying to further their business interests. The problem is that without their users they have no business and it may come to a revolt as happened when beacon was launched in order for Facebook to see the error in this default opt-in policy.

    One of the most unfortunate aspects of all of these changes that Facebook has made is that the vast majority of their users don't know about them, nor do they understand them. Facebook has also made many of these options difficult to find, and has not clearly defined that some information cannot be made private regardless of the strictest privacy settings the user can activate. Facebook is acting is acting in the best interests of it's revenue streams, but not in the best interest of the generators and holders of the raw data that their customers are interested in. Let's not fool ourselves here, the users of Facebook are not the customers of Facebook. The users are simply cattle to be taken to slaughter.

    Facebook will die a slower, and probably more painful, death than myspace. Their current actions however dictate that there can really be no other outcome. Zuckerbergs statements and actions indicate that he doesn't understand the problems with his actions, or simply doesn't care.

  • Robert

    Truth is e-commerce companies have been arguing for years that laws protecting purchasing information including CC numbers are to strict for the exact same reasons. If you shop there, you accept the risk, privacy is dead anyway, and lets face it… why should the company care?

    Reality is that people and those responsible for the fallout of misuse (eventually the court system) need to figure things out and how to deal with them.

  • http://www.twitter.com/cristinacordova Cristina Cordova

    I'd agree with with you… if and only if Facebook users signed up for the service in the last few weeks. If this were true, Facebook would have no obligation to protect the privacy of users, as their privacy policies/TOS were agreed upon at the start of the user-service provider relationship.

    I've been using Facebook for about four years now and it is a very different service than the service I signed up for. Most of this is due to the fact that I was opted into Facebook's added publicity settings over the years. I never gave my explicit consent and my information was compromised. Facebook has the obligation to be the service I legally agreed to and not share the information without my meaningful consent. Anything less would be unethical.

    In February 2009, Mark Zuckerberg responded to privacy concerns raised by The Consumerits,”In reality, we wouldn't share your information in a way you wouldn't want. The trust you place in us as a safe place to share information is the most important part of what makes Facebook work.”

    Today, Facebook makes plenty of decisions with my information, sharing it in ways that I don't want – forcing me to go back and change privacy settings again and again. Privacy should be viewed as control and Facebook has made repeated attempts to eliminate privacy and claim that users have more control… when they have actually lost it. Facebook is required to notify users of the ways it uses information, which it neglects to do when users must opt-out after the information has already been made public. With opt-out, users have no choice other than after the fact.

    Users must also have a choice – to stick with the service they signed up for originally and opt-out of making their information public. Anything less is a refusal of service. For example, if you opt-out of Facebook's “Connected Profiles” feature, the service notifies you that “your profile information will be removed and your profile page will be left empty.” When someone agrees to the feature because they don't want to lose their information, it is not meaningful consent to share.

    Facebook is really the only player in the game, making it too difficult to get up and walk away from the service. This makes Facebook very powerful and its actions very profit-hungry and ethically questionable.

    - Cristina

  • http://www.mynext.co.uk mynext

    Would be interesting to see a paid facebook where they allowed you a better level of privacy. I think you make a good point about their model being give us your data.

    Thanks