Over the last few months, there have been some rather disturbing reports of social networking giants and large Internet companies going to extraordinary lengths to collect what most people would consider private data. One example of this is a story that broke earlier this year, alleging that Facebook sent a physician to major hospitals in an effort to negotiate the bulk release of patient medical data. Facebook claimed that the medical records, which would have been redacted to remove patient names, were being used solely for research purposes. However, some people have speculated that the massive amount of data that Facebook has collected might be sufficient to establish patterns that would allow the company to figure out whose medical records are whose. According to eWeek, however, “Facebook has been pitching the ability to target potential users of medications to pharmaceutical companies for advertising.”
Another example of an attempt to collect seemingly private information is Facebook’s recent attempt to collect detailed financial data from major banks. According to the Wall Street Journal, “the social media giant has asked large U.S. banks to share detailed financial information about their customers, including credit card transactions and checking-account balances, as part of an effort to offer new services to users.” Facebook claims that the data is not to be used for advertising purposes but rather as a way of providing various banking-related services through its Messenger app. And then there’s the case of Facebook looking to collect nude photos of you, something we detailed here at TechGenix earlier this year.
If we are to take Facebook at its word, then its data-collection efforts are completely benign. After all, redacted medical data is used in studies all the time, and banking apps are certainly nothing new. Even so, the sensitivity of the information that is being collected warrants at least a bit of skepticism.
A bit of historical perspective
I have worked in the IT field since the early 1990s, which predates the Internet going mainstream. In 1994, I was working as a network administrator for a large insurance company. One day, my boss came to me and told me that he was sending me out of town for a few days because he wanted me to attend a seminar on how to set up a website.
Now there are two things that you need to understand about this. First, large hosting companies such as GoDaddy did not exist back then. If you wanted a website, you had to host the site yourself, in your own datacenter. The other thing that you have to understand about that period of time is that Internet access was something of a rarity. Even though I worked in IT and knew what the Internet was, I had never actually seen a website before.
Not surprisingly, the first couple of hours of the seminar were spent giving attendees a tour of the Internet. The presenter wanted to show us the difference between a good website and a poorly constructed website and to give us a realistic idea of what was and was not possible given the technological limitations of the time.
As the presenter took us from one site to another to another, he kept saying that the best part of the Internet was that all of the Internet’s content was accessible for free (minus the rather expensive, per-minute charges for connecting to the Internet).
Later that afternoon, the presenter began discussing the architecture that would be required to set up a website. This involved things like redundant Web servers, a hardware firewall, and the list goes on. I left that particular discussion with a case of sticker shock. Each of the required items cost many thousands of dollars at the time (at least according to the estimates given by the presenter), and the presenter also said that you could expect to spend at least $1,500 per month on Internet connectivity, although the bandwidth charges were often substantially higher.
I left the seminar completely bewildered. On one hand, the presenter had indicated that a website would require a major investment in hardware and software and that keeping the website online could cost thousands of dollars each month. On the other hand, I couldn’t understand why anyone would spend that kind of money and put a lot of effort into creating a website, only to allow the world to use the site for free. It just didn’t make sense.
I could accept that there might be a few people who are so passionate about a particular topic that they would bear the cost just to be able to share their beloved content with the world. I also understood that a large company like the one that I worked for at the time would be using its web presence as an advertising tool. However, I just couldn’t figure out how others could justify the cost of a website.
Back to today
Obviously, there are a lot of things that have changed since the mid-1990s. One thing that has not changed, however, is that many of the online resources that we use every day are made freely available to us. It does not cost us anything, for example, to do a Google search, to upload a status update to Facebook, or to post a video to YouTube. But with that said, just imagine how much money it must cost those companies to develop, support, and host those services.
A couple of years ago, I had the chance to see one such operation for myself when I was invited on a tour of one of the Microsoft datacenters. Unfortunately, I had to sign a nondisclosure agreement, so I can’t tell you where the datacenter was (it is a long way from Redmond), or which cloud service was being hosted at that datacenter, but I can tell you that the operation was absolutely massive. I cannot even begin to guess how many acres the datacenter consumed.
So just imagine what it must cost to build and operate something like that, and yet many of the biggest tech companies make their services available to us for free. So how can they afford to do that?
While it is true that revenues are often ad-driven, there is a more basic (and sobering) explanation. I’m not referring to any specific companies here, but generally speaking, when a social network or a search engine makes their services available to you for free, you are not the customer. Instead, you may be the product. A web company may be serving you targeted ads based on what it knows about you, or it may be outright selling your personal information. Policies and practices vary from one company to the next and being that privacy statements are jam-packed with legal jargon and seldom read, there is just no telling how a given company may be using your data.
Does Facebook deserve the benefit of the doubt?
It is completely plausible that Facebook’s attempted collection of medical records and financial transactions is both legal and benign. To the best of my knowledge, nobody has made any allegations of wrong-doing related to these data-collection efforts, so I am willing to give the company the benefit of a doubt. Even so, I definitely find some of the data-mining efforts that various tech companies have engaged in over the last few years to be unsettling, especially when you consider how a good AI engine might be able to use what it knows about you to fill in any gaps in its knowledge. Let’s just hope that these companies never decide to join forces with one another and merge their databases.
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