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Monetizing User Data: The Case of Clickable Consent

privacy issues

privacy issues

You probably don’t realize how valuable your information is to an online business. Every website owner who knows how to market monetizes user data for future marketing campaigns.

When you enter any kind of information into an online form, the information is stored, processed and analyzed into several different reports.

Big Companies, Big Data and Monetization

Big and small websites monetize your data. Small companies use your data to grow sales. Large corporations can use data mining and big data to store terabytes of information. Big data analysis has become so intelligent that the data can tell companies what products you are more compelled to purchase, what your demographics mean to sales and what products to upsell to you when you make purchases.

Even though small companies use your data, big companies are the ones that make the news. Companies such as Google, Yahoo, Facebook and LinkedIn are the latest to make the news with new lawsuits filed in the State of California.

The issue is not just the information that you agree to allow these companies to use. The issue is that you probably don’t know the extent at which companies data mine and how much of your personal information is stored. Your address and name aren’t the only pieces of information stored.

Companies use personal photos, email content, private messages and your contact lists. Online companies made an estimated $40 billion in 2013 based off of sales from your private data. Of that $40 billion, Google is said to have made 40% of the revenue. This information includes your social media photos, email content and personal contact lists.

Big Companies and Ongoing Privacy Investigations and Lawsuits

The lawsuit complaints mostly mention social media data. Social media users are naively open to posting personal information to social media accounts thinking they are only sharing with friends and relatives. Facebook was one of the first companies to face allegations and lawsuits over privacy concerns. Facebook introduced ads to its social media network in 2006. In order to target ads on your Facebook pages, the company needed to mine your data. The company took it too far when it decided to use data you post to your wall and the images you upload to the site.

A Swiss security company investigated these big companies to identify if they were scanning data. The company used several secret URLs never used previously and entered them on 50 web companies’ social networking pages. In its investigation, Google, Facebook and Twitter opened these URLs, proving that they were scanning and reading information sent through supposed private channels.

Privacy concerns just don’t stop at URLs. Social media sites use photos and messages to identify your interests. When you tag a friend in a photo, the company can also analyze your interests with your friends’ to then target your friends. Facebook was sued over the issue in 2011. The result cost Facebook $20 million, and the company was forced to rewrite rules for its users to read. Facebook was also forced to implement features into the the app that allowed users to have more control over how information was mined and used to serve ads. The lawsuit is now in the appeal process.

More recently, Google has been named in a lawsuit that alleged the company scanned email to serve up ads. Google has two ad networks: Adwords and Adsense. Adwords is used by advertisers to buy ads in the search engine results pages or on content sites that use Adsense. Adsense is the content network that pays website owners to display these ads on their websites. Google admitted to scanning email in the company’s Gmail system. When you open a Gmail email, the company scans for certain keywords and uses these keywords to display ads. The result is your data stored in Google’s databases and allegedly sold to advertisers to target your interests.

LinkedIn is the latest to join the fray. LinkedIn was found to scan and use its users’ private external contact lists. One current LinkedIn user discovered that the company was using data from his contact list on an abandoned private domain email account. The user claims he created a LinkedIn account using an email address that was never used. He alleges that LinkedIn read his contact list information without his permission while he was logged in to LinkedIn’s website.

Pressure from the UK

The UK has stricter privacy laws than the US. Because these three web giants are US-based companies, the UK is increasing its pressure on these companies to provide better awareness for users and decrease the use of private information data mining for marketing. The UK already has stricter cookie laws. To comply with UK laws, website owners must notify readers that the site places cookies on the user’s computer. The notification window must ask for the user’s permission to implement cookies or the website owner can face a penalty.

The European Union is also rewriting rules that can cost US companies millions in fines if they do not comply with privacy regulations. The EU wants to fine companies up to 100 million euros for violating privacy laws.

Even with these lawsuits and the possibility of better transparency when capturing data, you can still be proactive and protect your privacy. If you use social media sites, be careful what type of data you share over the Internet. When you enter information into online forms, enter only the very minimum amount of private information. For even better security, block cookies if they aren’t needed for a website to function. Sites such as Google use cookies for personalized results, but you don’t need cookies for the search engine to function.

Always keep your data encrypted if you pass it through platforms such as email or instant messaging. Finally, read the fine print when you agree to let a company use your information in marketing campaigns.

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  1. Mobile Technology News, May 16, 2014 | DigitalWorkshed - May 16, 2014

    […] and sell data to third party ad networks. In 2013, the data sales industry generated about $40 billion in revenue and Google received about 40 percent of […]

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