Is there any ethical and profitable alternative for cos like Facebook

In the past fortnight, Facebook, the embattled social media giant, lost around $100 billion in market capitalisation, faced irate regulators and delayed the launch of a bunch of new services. Big corporate names, including Apple CEO Tim Cook and his counterpart at Tesla, Elon Musk, have lashed out at the Menlo Park, California-headquartered company, with Musk tweeting, “Just don’t like Facebook. Gives me the willies.”As Mark Zuckerberg, cofounder and CEO of Facebook, steels himself for a protracted face-off with governments and regulators over questionable use of its user data, critics are already circling the industry’s core business model — centred around targeted advertising, which accounted for 98% of its revenues in 2017 — and wondering if other social media and consumer-focused tech firms, too, will get dragged into the muck. On the face of it, the big guns seem to be safe, for now.But as citizens, governments and regulators get tougher on them, the best they can hope for is that it’s a temporary blip and the worst a protracted siege, with their revenue model coming under serious threat.In India, a key market for social media and consumer tech giants, these companies will hope their existing business models can hold up to far greater regulatory scrutiny. Already Union Information Technology Minister Ravi Shankar Prasad has signalled the government’s hardened stance on unauthorised use of Indians’ private data and many of these behemoths will want to fall in line, rather than risk a bruising fight with regulators — remember Facebook’s futile campaign against net neutrality in 2015-16.Sceptics, however, point out that Indian consumers, millions of whom are first-time internet users and social media novices may be easily gulled into parting with their data. Demanding greater caution from them may be difficult, and until now, social media companies, led by Facebook, have shied away from more probity around their affairs. 63561349 Questions sent by ET Magazine to Facebook, Google and Microsoft went unanswered. An Amazon spokesperson told ET Magazine: “Customer trust is one of our top priorities. We never sell our customers’ personal information. We only share our customers’ personal information as described in our privacy policy.”“Commercial Surveillance Network” On May 24, new regulations from the EU may pose the most serious challenge yet to the dominance of internet companies. “It’s not social media but really all of digital media,” says Jeffery Chester, executive director, Center for Digital Democracy, a non-governmental outfit in Washington, DC, which has battled tech companies over how they use and manage consumer data.“The new EU data protection law creates an unprecedented opportunity to restore the balance between the giants that are gathering data, like Google and Facebook, and the individual.” He believes companies will increasingly be held accountable and forced to change how they do data-driven digital marketing. “The Facebook/Cambridge Analytica scandal is emblematic of what goes on all over the world when people go online.They become part of a seamless commercial surveillance network.” Facebook has said it was doing away with a product that enabled data providers help advertisers target Facebook users.Other critics of Facebook and tech companies’ intrusive collection of personal information are quick to latch onto these worsening problems for the industry. “This (harvesting of user data) is not a necessary evil and is not acceptable.Facebook has gone too far in capturing our data and marketing these data to unscrupulous players. Facebook has weaponised social media,” says Vivek Wadhwa, distinguished fellow, Carnegie Mellon University Engineering. “It has been the Wild Wild West, with no rules and regulations. It is time to fix this. They need to be urgently regulated.They are damaging the fabric of society.” Alessandro Acquisti, professor of information technology and public policy at the Heinz College, Carnegie Mellon University, thinks this kind of intrusiveness is starting to have an adverse effect on consumers and to the detriment of social media and technology giants.“There seems to be, at least in the US, at the moment, a change in the collective stance over privacy,” he says. “The recent scandals seem to have provided a definite answer to the question: does privacy matter?” It may, however, be too early to judge if the current stance towards privacy will be lasting or fleeting — whether our privacy behaviours will change, or whether we will be back to droning on about the latest app.While there is a growing clamour over the direction internet companies are headed in, few people see a viable, alternative business model emerging. If you are not interested in an advertising-supported social network or search engine, the most obvious alternative is paying a one-time or periodic fee to have an ad-free experience. The implication is that since you are paying, the company does not have to share your data with advertisers.Vidya Narayanan, research director for Oxford University’s Computational Propaganda Project, believes that after a buccaneering ride for the past decade, these companies may need to take a more introspective route now. Led by Facebook’s reassessing its privacy policies and procedures, these behemoths may be in for a long slog. Facebook has vowed to make privacy settings easier to access. “There’s also a need to raise awareness among people about the ways in which data can be accessed by third-party apps using Facebook APIs and how the data collected by the tech biggies is being shared with advertisers and campaign managers who use that for micro-targeting,” she says. (API or application program interface is the software intermediary that allows two applications to talk to each other.)As these companies evolve, stricter regulation is inevitable. “These companies need to be regulated…(they) have evolved from being simply search engines or platforms for social interaction, to becoming arbiters of our world view,” adds Narayanan. If EU’s data protection law is a step in that direction — the US and India are, among others, mulling tougher legislation — consumers could benefit in several ways.These include not getting manipulated, gaining some understanding of how individual news feed is determined and how search results are sorted and recommendations generated. Users then need not view the world through a prism that’s designed by big tech companies based solely on user preferences. Regulators could also prevent hate speech and misinformation campaigns influencing elections.While this may be one way to look at things, some new social media ventures like Vero are toying with alternative business models like subscription. However, subscription-based social media platforms have not worked or remain very niche. Vero is also trying out another way to monetise its user network, by letting merchants sell their wares to users and charging them a transaction fee. But this means users could be shown products based on their posts.Vero has been around since 2015 but saw its iOS user base quadruple to 2,00,000 after the Facebook scandal. (Vero is also available on Android). Vero is not charging its first million users — it had yet to decide a fee for the rest. 63561353 The company is led by billionaire Ayman Hariri, son of slain former Lebanese PM Rafic Hariri. Minds, a privacy-focused open-source and crowdfunded social networking service, is not very popular. There are bound to be more attempts to create “more responsible” competitors to Facebook — a few days back, industrialist Anand Mahindra tweeted that he would financially back Indian startups in the social media space, if there were any.Some industry watchers, however, think these initiatives may be half-baked. Balaji Venkateshwar, a cybersecurity expert, says subscription is not a viable business model for social media and messaging platforms. He refers to WhatsApp’s decision to withdraw its token $1 a year subscription fee in 2016, citing difficulty in making online payments in many countries. (WhatsApp is owned by Facebook.) 63561357 “These companies can’t scale up with subscription, and users will have to realise there is no free lunch. They get to use social media for free because their data is being sold to advertisers,” he says. “More important than subscription is localisation of data. For instance, Indians’ data should be stored in India. Otherwise, the Indian government cannot do much in case of a breach.”Social media maven Karthik Srinivasan believes these giants are too big to fail, even if they are compelled to tweak their tech backbone and privacy policies to better protect their users. He says the current angst is isolated and if there were to be a serious wave of disenchantment, large number of users would log out. “(Platforms like) Facebook and Google are too big to fail, and people have gotten thoroughly used to their networks and conveniences on these platforms,” he adds. “So, forgetting them will not be easy like what happened to Myspace or Orkut, which had lost their utility value long before they shut shop.” 63561401 63561405 Social media, then, may be here to stay, even if an agreeable business model is a work in progress. “Social media has become an essential part of our lives and in its best form enables public engagement with socio-political causes and supports freedom of speech,” says Narayanan of Oxford University. “As many Indians come online for the first time, social media can be a powerful force for empowerment and freedom from traditional hierarchies.”Nailing down this business model may be harder than it appears. Just paying to access a website or an app does not necessarily mean the company is not going to use your data. Take, for instance, video-streaming platforms like Netflix, Amazon Prime Video and Hotstar. They charge a subscription fee to allow access to their whole library, but they accumulate data on what you watch, based on which they recommend films and series.It is accentuated in the case of a platform like Google-owned YouTube, which has a wildly popular free version with ads before and in the middle of videos, but also has an ad-free subscription option. YouTube has millions of user generated videos and if you have searched for clips skewed towards a particular ideology, chances are you will be shown a lot of similar videos. 63561417 63561423 In several cases, not revealing details like your ISP address and location — by not logging in or by using a virtual private network — means you are giving up on convenience. For instance, you may not be able to auto-complete web addresses and searches.Narayanan says the business models of most of these companies may be rooted in access to public information and their long-term success may be dependent on educating consumers about protecting their privacy and ensuring that they read the fine print in all data consent forms.“Meanwhile the onus is on policymakers and researchers to apply suitable pressure on big tech companies to follow an ethical data gathering, harvesting and sharing policy,” she adds. “There’s also an urgent need for these companies to be transparent about the external companies and political parties that they might be sharing their data with.

from The Economic Times https://ift.tt/2pRUQtK