Everything is "Free" - Part II - The Data Cake

Issue

Everything is free, then the user is the "product" - a phrase that many people have heard somewhere. Most people are willing to create free products to attract users and then find ways to make money from this user base. This way is very common in the present because it is easy to approach and attract users. While they don't have to pay to use, the data they provide is the premise for other revenue-generating activities, such as advertising.

Let's take two of the largest examples in the data-driven advertising industry, Facebook and Google.

Facebook provides free social networking services to billions of users worldwide. The company makes money mainly from selling ads, and the largest source of revenue comes from collecting user data, analyzing their behavior and preferences for advertising purposes.

Facebook uses a lot of personal information that users share to create detailed profiles. These profiles are analyzed to display personalized ads, aiming to increase click-through rates and purchases. Imagine that you are interested in a product, but you don't tell Facebook, and just a minute later, the social networking site is flooded with ads for that product.

Similarly, Google offers a range of free services such as search engines, Gmail, Google Maps, YouTube... The main source of revenue for Google also comes from online advertising through the Google Ads platform. In the first quarter of 2024, Alphabet (Google's parent company) reported $80.5 billion in revenue, with total advertising revenue of $61.66 billion, which is enough to see how strong their advertising activities are.

Like Facebook, Google collects data from search queries, emails, browsing history, geographic location, and user interactions. This data is used to build user profiles and display ads tailored to individual preferences and behavior. Moreover, Google's ecosystem is very strong as they can collect user behavior through multiple channels.

But what are the effects on free users?

Impact from Free Software

In 2018, when it was reported that Cambridge Analytica had collected and used Facebook user data without their consent, millions of people were affected. Cambridge Analytica collected data from approximately 87 million users without permission.

Cambridge Analytica used the collected data to develop targeted advertising strategies aimed at manipulating political activities. The company used the data to aim ads at individual users with the intention of manipulating their behavior.

As a result, Facebook's CEO, Mark Zuckerberg, had to testify and admit mistakes in managing user data. Cambridge Analytica was dissolved. Countries and organizations worldwide also began implementing stricter data protection measures, such as the General Data Protection Regulation (GDPR) of the European Union.

Similarly, Google's data breach in 2018 was a major scandal regarding data privacy. In this incident, the Google+ API revealed private data of over 500,000 users. Chrome, the most popular free web browser, has been accused of collecting user information quietly and discreetly.

In summary, the data of free users is being used to make money based on targeted advertising. Moreover, user data is at risk of being leaked or used for malicious purposes.

While data-driven advertising is legal, the scandals revolve around data breaches and misuse for malicious purposes. In contrast, free software or even free reading is on the opposite side of the scale.

Impact from Pirated Software

Pirated software also makes money through advertising. Websites that collect pirated software display ads throughout their pages. Unlike legitimate advertising, these ads are extreme and contain unhealthy content. Moreover, these ads are often malicious and misleading, resulting in users downloading malware instead of the intended software.

Furthermore, pirated software is often stored on low-quality websites that require users to pay to download, otherwise, they will be forced to download at extremely slow speeds. The purpose of this practice is to display ads and receive a commission if the user chooses to pay for the download.

The more accessible pirated software is, the more dangerous it becomes. The software can contain various types of malware, serving different purposes, such as displaying ads, keyloggers, cookie thieves, identity thieves, or even turning computers into part of a botnet for large-scale attacks. In summary, if a computer is infected with malware, the consequences can be devastating.

But that's not all; using pirated software is harmful to individuals and legitimate businesses alike. Every time someone uses pirated software, they are encouraging others to follow suit, thereby undermining the creative economy, discouraging developers, artists, and content creators from producing high-quality content. By using pirated software, users do not contribute to its development, improvement, or security, thus hurting legitimate developers and causing their work to lose its purpose and spirit.

Reference:

• Facebook–Cambridge Analytica data scandal
• 2018 Google data breach
• Software Management: Security Imperative, Business Opportunity | pdf