Monday, February 23, 2015

The Real Price of "Free" Services


What’s the price you pay for a “free” product?  A free eBook will cost an email address.  A free coupon or gift certificate may cost 10-15 minutes filling out a survey.  What is the cost of the free use of Gmail, YouTube, and Google Analytics?  Information.  With every mouse click, Google is collecting information about what users search for, what ads are clicked on, what users write about, what they watch, and what apps they like (Dickey, 2014).  





The information Google has collected from their customers has given them a perspective of customers in regards to their online behavior. As they develop driverless cars and Google Glass, Google aims to have a better understanding of customers’ lives off-line as well.  Their quest to be innovative and integrated into customers’ lives has put them under fire because of their questionable collection and utilization of customer information.

The controversial component with Google is whether or not the customers are aware of what they’re “paying” for these free services.  Many times privacy policies are long and challenging to read.  Sometimes companies, such as Google, disregard their privacy settings and collect information in ways that make their customers uncomfortable.

Google in the News

Google has been in the news numerous times for their questionable data collection tactics.  Many of their products and services have woven their way into our daily lives and as they continue to do so, more and more customers disagree with how and why their data is being collected.  Acquisitions and lawsuits have caused customers to be wary of Google’s data collection. 

Google’s acquisition of Skybox Imaging (which includes satellites and high-resolution imagery and videos from around the world) means that they can watch everything in real-time.  Google positioned the acquisition of Skybox as a tool that will help keep maps and other technology up-to-date for customers.  However, Google can also use the intelligence to determine when competing products will be released based on shipments coming to and from their warehouses (Dickey, 2014).  Being able to gain that information about their competitors means they can gain other valuable information from their customers.  Google hasn’t been upfront about the information they gather from customers, which has landed them in a number of lawsuits.

In 2013, 38 states filed a lawsuit against Google for “causally scooping up passwords, e-mail and other personal information from unsuspecting computer users” with their Street View mapping cars (Streitfeld, 2013).

Additionally, Google was under scrutiny for “prying and spying” as they analyzed users’ messages on their network and sold the byproducts to advertisers.  Users that were impacted sued Google saying that the invasion violated federal wiretap laws (Rosenfeld, 2014).  The privacy accusations weren’t limited to Google products and services. 

Google was directed to pay $17 million to settle a lawsuit that claimed that they bypassed privacy settings in Apple’s Safari browser.  Safari was set up to block third-party ad cookies and Google found a way to get around those settings and track user behavior without their consent (Tung, 2013). 

Privacy

An evaluation of the 50 most popular American Web sites revealed that their privacy policies were composed of 145, 641 words and that it would take the average internet user between 181 and 304 hours to read the privacy statements for the Web sites that they visit each year (Moretti & Naughton, 2014).  On top of that, policies may change on a yearly basis, which means customers would have to reread that information annually. 

Privacy information responsibility needs to be shared between the service provider and customers.  Customers need to be aware of the privacy information prior to pressing accept and using the service.  The discouraging part is that providers don’t make the process easy for customers to understand how their data is being used.    

Providers
Providers intentionally make it difficult for customers to understand what they’re reading.  According to Moretti and Naughton (2014), they do this for two reasons.  First, being vague and “elastic” in their language helps to protect themselves against lawsuits and fines.  The second reason is that gathering this kind of information includes a significant financial incentive, which results in companies making it difficult for customers to opt-out.

Co-founder of Disconnect (an app that blocks third-party Web sites from gathering data), Casey Oppenheim said, “They know that if they tell people every single way they’re collecting information and using it, then most users will share less information, which would mean less money for them.” 

Users
According to a study by Pew, “half of Americans are worried about the amount of personal information about them that is online” (as cited in Moretti & Naughton, 2014).  However, a 2015 US Consumer Confidence Privacy Research report found that only 23 percent of people had read the privacy policy on a Web site or app (as cited in PR Newswire, 2015). 

With technology making peoples’ lives easier everyday, customers need to take time to understand how companies are using their information.  Web sites need to share in the responsibility and make sure that they’re doing what they can in order to make it easy for customers to understand the privacy policies for their sites.  When customers are well informed about how their information is used, they can better decide if continuing to use the service at no cost is worth the company gathering their information.

My Take

Data collection can be used to make customer lives easier and more enjoyable.  Sites such as Amazon and Netflix use customer data to make suggestions that allow customers to find new products and shows.  Google offers many industry-leading services free of charge because the data they collect from customers has a great deal of value.  In my opinion, customers need to be aware of the information that’s being collected and how that information will be used.  It’s valuable for customers to know the difference between collecting data that is anonymous and data that has personal information attached to it.

As previously mentioned, the responsibility must be shared.  I do not think it’s right for providers to create privacy statements that customers do not have time to read and cannot understand the language.  They are not providing customers with the information and tools necessary to be able to make an educated decision about the tradeoff that comes with data collection.  For some customers the “free” price tag on these services might not be a greater benefit than the data that companies are collecting.


References:

Dickey, M. (2014, June 18) It’s time to admit the amount of information google gathers about us is terrifying. Business Insider.  Retrieved from http://www.businessinsider.com/the-information-google-is-gathering-about-us-is-terrifying-2014-6

Moretti, M. & Naughton, M., (2014, September 5) Why privacy policies are so inscrutable. The Atlantic. Retrieved from http://www.theatlantic.com/technology/archive/2014/09/why-privacy-policies-are-so-inscrutable/379615/

Streitfeld, D., (2013, March 12) Google concedes that drive-by prying violated privacy. New York Times. Retrieved from http://www.nytimes.com/2013/03/13/technology/google-pays-fine-over-street-view-privacy-breach.html?_r=0

PR Newswire. (2015, January 28). 45 percent of americans think online privacy is more important than national security. PR Newswire. Retrieved from http://www.prnewswire.com/news-releases/45-percent-of-americans-think-online-privacy-is-more-important-than-national-security-300026808.html

Rosenfeld, S., (2014, February 5) 4 ways google is destroying privacy and collecting your data. Retrieved from http://www.salon.com/2014/02/05/4_ways_google_is_destroying_privacy_and_collecting_your_data_partner/

Tung,  L., (2013, November 19). Google pays $17m to settle safari cookie privacy-bypass charge. Retrieved from http://www.zdnet.com/article/google-pays-17m-to-settle-safari-cookie-privacy-bypass-charge/