In the last years, data has become an asset which can result in massive profit for businesses of all kind. This has resulted in companies creating massive reserves of data for it’s potential to generate revenue. But how exactly do companies collect data, and how is profit generated?
Data can commonly be collected in two ways. Firstly, by directly asking costumers, such as signing up for a social media app or service and filling in the required information fields which commonly ask for personal information such as a name, postcode and date of birth. (Uzialko, 2018). This process usually also involves users giving consent to the company’s terms of service, which research has shown that the majority of people skip and are not fully aware of the terms they are consenting to (see Privacy Policy blog).
Data can also be collected indirectly and without user’s consent. An example of this is the popular messaging application, What’s App, sharing users’ names and phone numbers to its’ parent company, Facebook, so they can create targeted advertisements for users (Tynan, 2016).
Another example is geolocation, which uses the IP adress of an internet connected device in order to build a personalised profile for users, for example, recording which shops users visit the most, or their route to and from work (Uzialko, 2018).
Lastly, data can also be collected unbeknownst of users, from their browsing and clicking activity when they are visiting certain websites. This is called “clickstream” data, which records activity such as pages visited and time spent on said pages (Baumann et al. 2019) . This kind of data collection is commonly used by e-shops, as well the marketing and website development sector, by creating user profiles which are then used for advertisement purposes.
In addition to that, some online advertising companies, such as DoubleClick, collect clickstream data across users’ whole browsing histories, invading people’s privacy for the purposes of targeted advertisements and other services.
Apart from targeted advertisements, companies also use this data for developing a costumer care plan suitable for their clientele, refining their marketing strategies so that they are able to attract more costumers (Uzialko, 2018).
Furthermore, DataBrokers, a newly formed industry, buy and distribute sensitive costumer information, creating a massive revenue, to marketing companies or even the government without the consent of users (Kroft, 2014).
Although there are laws in place for the protection of private data, such as the General Data Protection Regulation (GDPR) which states that people have the right of access, portability and erasure of their personal information from databases, it is becoming increasingly difficult for consumers to exercise these rights, as it is impossible for them to know what kind of private data has been collected or processed without their knowledge or consent (Hert et al, 2018).
Furthermore, a few exemptions within the regulation it self, such as the right to deny erasure if the effort to do so would be too great and disproportionate, really highlight the fact that consumers are not at all in control of their personal data (Ooijen et al. 2019).
References:
Ooijen, V., Vrabec, H. (2019) Does the GDPR Enhance Consumers’ Control over Personal Data? An Analysis from a Behavioural Perspective. Journal Of Consumer Policy. Vol. 42 Issue 1, pp 91-107
Baumann, A., Haupt, J., Gebert, H., and Lessmann, H. (2018) The Price of Privacy: An Evaluation of the Economic Value of Collecting Clickstream Data. Business & Information Systems Engineering. Volume 61, pp s413–431
Uzialko, A. (2018) How Businesses Are Collecting Data (And What They’re Doing With It) [online]. Business News Daily. Available from: https://www.businessnewsdaily.com/10625-businesses-collecting-data.html [Accessed 8 April 2020]
Kroft, S. (2014) The Data Brokers: Selling your personal information [online]. CBS News. Available from: https://www.cbsnews.com/news/the-data-brokers-selling-your-personal-information/ [Accessed 8 April 2020]
Tynan, D. (2016) WhatsApp privacy backlash: Facebook Angers Users by Harvesting Their Data [online]. The Guardian. Available from:https://www.theguardian.com/technology/2016/aug/25/whatsapp-backlash-facebook-data-privacy-users [Accessed 8 April 2020]
Hert, P., Papakostantinou, V., Malgieri, G., Beslay, L. and Snchez, I. (2018) The Right to Data Portability in the GDPR: Towards User-Centric Interoperability of Digital Services. Computer Law & Security Review. Volume 43, issue 2, pp 193, 203
Interaction Design Blog 