People's behavioral data has become the largest source of business. Shoshana Zuboffh’s book The Age of Surveillance Capitalism is based on this very question. Whatever we choose to call this period, we now live in a time when “Big Data” and, in particular, behavioural data, has become the world’s major source of business. What is it all about? Where, when and how did it start?
Article by Giorgio Merli
Surveillance Capitalism began the moment the dot.com bubble burst, when Google tried to increase its advertising revenue by using its exclusive access to a source of largely ignored data, the “log” left by users’ online searches and navigation. Google discovered that this data could be analysed with predictive models that would give definite indications about the users’ interests. It went further: these users could be sent advertisements that would influence their behaviour as consumers. This is how Google was able to reuse the “excess” behavioural data, instead of normal search activity, and developed new aggressive methodologies to access such information.
The Users’ experience of free raw material is converted into behavioural data and then sold as “forecast products” on a new market, that of the behavioural data commerce. Not only are our minds exploited in order to obtain data, but they are influenced to control future behaviour through the well-known framing effect or conditioned directly via technology (for example by blocking a car if the insurance has not been paid).
Its power derives not from weapons or armies, but from a computational architecture of intelligent devices, of things (Internet of Things), and of connected spaces. In such a framework, we are not seen as people but as users. Users that become “the source” of a crucial added value for surveillance capitalism and subject to a technologically advanced and ever more inevitable process of extraction of raw material. Users – in spite of themselves – become the producers of data. Their (that is our) behaviour is collated based on the search or purchase clicks, and becomes a product in itself to be then sold or exchanged with other companies.
New forms of monetizing user data
Google Maps was Google’s way into this new business; Google Maps evolved and expanded into Google Street View (that photographically mapped every street), and eventually into the Pokémon Go game. With Street View, Google took possession – free of charge and without asking anyone’s permission – of all public space. And with Pokémon Go, while a player thinks he is chasing a Pokémon in his own area, he is in fact being driven towards a precise destination. In fact, what the player does not know is that a particular shop has paid so the game will steer him towards its location. This system is very different from traditional advertising…
The game is an evolution of the pay-per-click system, already commonly used in online advertising, but transferred to the physical world. The real customer for Niantic (the company who has created the game and a Google subsidiary) is the advertiser and not the player (who is instead the object of the business) – an advertiser who will pay only when the player reaches the target area. Therefore, this is a pay-per-visit system where what creates revenue is the player’s action influenced by the “game” that will do all it can to steer him where his route will produce most profit.
It’s not surprising then to discover that the Roomba robot vacuum cleaner can create a map of the user’s house and pass it to Google Maps, which then finds a way of mapping the private space which in turn, becomes a new territory to conquer. Of course, we can refuse the terms of service of the vacuum cleaner and so block the transfer of data, but then we have to forgo various functions such as remote activation via a smartphone app. From the consumer’s point of view, this is a serious distortion of the contract that usually binds the consumer to the manufacturer: in the case of the wear and tear of the purchased product, the warranty works 100% only on certain conditions.
In November 2018, Jim Hackett, CEO of Ford Motors Company, during an interview expressed a new paradigm for car manufacturers, stating that in the future we shall have a whole wealth of data coming from vehicles, from the users of said vehicles, from the cities speaking about these vehicles, and from company competitors, adding that Ford has “100 million people in vehicles today that are sitting in Ford blue-oval vehicles. That’s the case for monetizing opportunity versus an upstart (es. Tesla) who maybe has, I don’t know, what, they got 120,000 or 200,000 vehicles in place now”. “We know what people make […] we know where they work […] we know if they’re married, we know how long they’ve lived in their house […] “And that” he concluded “is the leverage we got here with the data”. Commenting on this an analyst of the sector has affirmed that Ford “could make a fortune monetizing data. They won’t need engineers, factories or dealers to do it. It’s almost pure profit”. The value of one mobility data unit such as that cited by Ford seems to be worth around 100 USD.
More awareness to protect your data
Everything Zuboff says in her book about Google and Ford, obviously also applies (maybe even more so) to all the e-commerce (Amazon, Alibaba, Ebay etc…), telecommunications, and social network players.
It is to be noted how recent facts highlighted by the media on the incorrect management of data by the social networks have caused the defection of a large number of users. A degree of awareness and fear, therefore, does already exist, but the trend of the development of this new form of “capitalism” seems to be unstoppable…
This context does not leave much space for optimism about the possible evolutions of these “surveillance” mechanisms (especially as to who will be doing the surveillance and to what end). It is not a matter of Cybersecurity (even though these technologies could help), but rather a question of implementing new “rules of the game”. It is a matter of urgency that we regain as much control as we can of our privacy and of the use that is made of our data.
Customers/citizens must be free to manage their own data as sole owners of the same, together with self-management of one’s own privacy (“I decide who I give my data to”) and with an economic return for the concession to third parties for the use of such data. All in conformity with the GDPR (General Data Protection Regulation), but possibly with greater self-protection over privacy and covert exploitation of data. Such new logic implies the use of blockchain based on the clients’ ownership of the flow of encrypted data being only available to authorised companies, in exchange for tokens or comparative advantages (discounts, additional services, etc…). And all this must come about through appropriate smart contracts signed by the parties involved.
Developments of this sort already exist. Let’s hope the power of the “Capitalism of Surveillance” does not bring them to a halt!
Source: Parole di Management, newspaper of Culture and Business – ESTE edition
About the author:
Giorgio Merli, author of numerous books and articles on Management published in Europe and USA, consultant to Multinationals and Governments, teacher in several Universities in Italy and abroad. Formerly Country Leader of IBM Business Consulting Services and CEO of PWCC Italy, is currently Senior VP of EFESO Management Consultants and engaged in several digital transformation projects.