WhatsApp’s recent revision of their privacy policy that will allow Facebook — WhatsApp’s parent company — to access user information that includes IP addresses, smartphone models, usage data, battery status, status updates, etc. raised a lot of uproar among the user base.
However, this situation is a lot more complicated beyond the criticism it has received and is a bad reflection of the value that data sharing economies represent. So here’s the real question:
Is data-sharing a bad thing?
For consumers in a data-centric world, there are a plethora of products and services that are free. Given that we live in an age where we can leverage technologies to build this reality, we need to understand why human data is commodified.
Instagram is a free platform for its users and has no limit or paywall to access the features of the application. If you were to look at freemium tools like Mailchimp or Slack, you’d see that you can use their basic service offering for free but there would be a limit to the number of emails or messages that you can send on the platform if you’re not paying for it.
Most tech-based platforms rely on gathering and analyzing user data to glean important insights to personalize customer experiences, improve services with hyper-targeting and share data with third-party services for ads, integrations, etc. This way, they can source their revenue by monetizing user data they get on their platform.
Service providers like WhatsApp and Facebook provide free platforms for the consumers by monetizing the data that they gather for the sake of third party service offerings that are a part of their platforms. Case in point is the advertisements.
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On taking a closer look, data-sharing economies where consumers exchange their data with service providers for free services is not in itself an evil practice. Consumers getting free, robust and engaging applications that add value to their lives, in exchange for data that will be used ethically, is not a bad thing.
However, the issue here is about a lack of ethics, accountability and transparency. WhatsApp’s change in its privacy policy along with Facebook’s reputation illustrates our need for a healthy ecosystem to nurture data economies; the solution lies in incentivizing consent.
Incentivizing consent with decentralized data economies
This could be a mutually beneficial, symbiotic relationship if it weren’t for the unethical data trade that goes on under our very noses, with no help from nuanced privacy policies. And most importantly, the consumer — from whom the data is harvested — doesn’t get the share of the profits that the company makes. The move to alternatives like Signal is an early warning sign of this phenomenon.
To run these businesses ethically, we need to incentivize consent at scale. To stress on this perspective, it’s not enough that businesses ask for permission to use customer data, but they must also give them an incentive to keep the economy running. Notably, the change in user experience might be minuscule on WhatsApp because of this revised privacy policy. Moreover, there is a huge overlap between Facebook, Instagram, Messenger and WhatsApp users anyway. The reaction is coming from the inequities in the data economy.
Solutions to these problems thrive in emerging technologies and a thorough understanding of practicing ethics. The added transparency in blockchains and other decentralized technologies will provide databases where the user data gathered is encrypted. This will empower users with the full purview of what data is recorded, how it is used and ultimately, making them the true gatekeepers of their data.
See related article: Data privacy is forever changed. Zero-knowledge proofs are enterprise’s solution
Data aggregators must also consider tokenizing data sharing as a measure to make users primary stakeholders. Utility tokens pegged to blockchains are a significant point of reference for a sustainable business model in this space. This way, businesses can be fully transparent about the data that they need, the purpose it serves and how they will use it. Accordingly, the tokens that are generated on the blockchain can be used as incentives awarded to customers for sharing their data. These tokens can further be swapped for cryptocurrencies like bitcoin or ethereum.
Moreover, in lieu of aggregating data in silos, entrepreneurs should consider data unions where businesses provide avenues that allow people to easily gather and sell their real-time data and earn incentives for the same. Through data unions users are able to pool their data together and earn revenue via crowdselling. The data streams or sets are then offered to brokers on marketplaces. There are solution providers in this space who enable these decentralized data-sharing economies.
Data enables business organizations to maintain a competitive edge as a strategic asset. Such consumer-inclusive practices will not only make the world a data privacy-preserving place, but it will also overcome the lack of ethics among large corporations like WhatsApp and Facebook.