Tech Giants Aggressively Monetize User Data and Why it’s a Problem?

Antitrust case against Facebook
Source: Business Insider

Called as the ‘fuel of the future’, IBM estimates that “we create 2.5 quintillion bytes of data every day“. 90% of today’s data was generated in the past two years. And, where is this data coming from?

Social media posts, pictures, and videos you share online, e-commerce transactions, location data from your cell phone’s GPS, Internet of Things, and ERPs.

The big companies are at war with each other and regulatory bodies to get hold of more data. Take for example the recent antitrust cases against Google, Facebook, Amazon, and Apple.

Spotify and Rocket Internet Slam Apple & Google for Withholding User Data

A recent letter to European Commission by Spotify, Deezer, and German venture builder Rocket Internet reveals how big of a problem it has become.

The CEOs of these companies slam Apple and Google for abusing their privileged position as mobile operating systems, app store owners, and search engines becoming “gatekeepers” instead of “gateways”. It was alleged in the letter that Apple and Google control over 90 per cent of mobile operating systems, and that they enforce unfair contractual clauses on the smaller businesses which host their smartphone applications on these platforms.

At the heart of this issue is a call to overhaul Europe’s digital policy. The smaller players have asked the European Commission to devise sector-specific codes of conduct or an independent dispute settlement body which can mediate when smaller business users have a complaint against bigger platforms.

This means that come future the app platforms like iStore and Google Play may be forced, under the existing US and EU competition laws to offer better data-access terms to smaller business users of the app stores.

Facebook’s Use of WhatsApp User Data

Facebook Inc. may soon be fined by the European Commission (EC) for the company recently announced to use its advertising platforms on Facebook and Instagram to draw upon data from WhatsApp“, reports Bloomberg.

This is 180 degrees contrary to what Facebook announced in 2014 when it acquired WhatsApp. At the time of acquisition, Facebook told regulators “that it wouldn’t be able to establish” reliable automated matching between the two companies’ user accounts,” a practice that would have allowed Facebook to use data of WhatsApp users for targeting ads.

The breach of European privacy laws can result in Facebook being fined as high as 1 percent of annual sales. Another incident last year involved Facebook restricted by the  UK Information Commission from using UK WhatsApp users’ data for advertising and product improvement purposes.

Regulators across the European Union are asking Facebook and WhatsApp for committing to clearly explain app users on how their data will be used these companies.

A New Consortium in the Data Race

A consortium of German companies that includes Allianz, Axel Springer, Daimler and Deutsche Bank is setting up a single sign-on platform that will allow users to use one login for a range of online services“, reported  Handelsblatt, a leading German language business newspaper.

You should not be surprised. Imagine the amount and quality of data the consortium will obtain when millions of users will sign-up for thousands of services using the consortium’s single sign-on platform. This way the consortium plans to break the monopoly of Google, Facebook over data.

Facebook TV

Facebook is about to launch a new TV service whereby the company will venture into original programming to rival Netflix, Amazon, and Hulu. Imagine the amount of data that Facebook will obtain through the new service and how it may use it to optimize and monetize its other services as well (as has been the case in WhatsApp’s data being used for Facebook and Instagram advertising).

Information Age Needs New Antirust and Competition Laws

Intellectuals and regulatory bodies across the US and EU are asking for upgrading the antitrust laws given that the nature of businesses has changed.

Google, Facebook, Apple, and Amazon thrive on the use of data that their platform and product users generate. The access to vast amounts of user data gives these companies an unfair competitive advantage over the smaller companies.

The Economist argues that concept of competition should be revised.

“Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the “data economy”.

Information technology giants such as Apple, Google, Facebook, and Amazon use raw digital information of their users to detect patterns, predictions, and other insights. As per The Economist, when Facebook acquired WhatsApp for $22 billion, it should have flagged a concern among the regulators. Sound that the publication is right. Facebook is now under scrutiny for using WhatsApp user data in its other platforms such as Instagram and Facebook advertising.

“Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the “data economy”, The Economist.


Whether it is Spotify alleging Apple to use ‘app rules’ as weapons, or the European Commission and the U.K Information Commission asking Facebook to come clean on its use of WhatsApp user data, the trend is clear and problematic.

The tech giants will only devise new ways of using user data to gain even more revenues from the use of data. Regulators will play catch-up, or worse collude with big companies as in the case of US FCC’s move to allow broadband companies to sell user data. The Net Neutrality is already in danger thanks to a liberal regulatory regime of President Donald Trump.

This is where you as a user can decide to take your online privacy in your own hand. Start by taking simple steps such as checking how much access you give to apps your use on Smartphone or Desktop. You can restrict it to minimal. Whether it means using a

Whether it means using a trusted VPN service to secure your digital footprints or using cloud backup services to protect your data from being hacked, the way forward is clear. You cannot trust regulators and corporate giants to protect your privacy rights because they make money by selling your data.

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Categories: Internet Security and Privacy News