Enjoy the data while it lasts. It won’t for too long

Behind your back, a fierce battle is being fought between actors of all kinds over who owns you. It will end soon. But a price will have to be paid. That includes our privacy

Charles Assisi

[By Gerd Altmann (CC0 1.0), Via Pixabay]

Last week was an interesting one. Much debate in India around privacy transpired. A lot of sound and fury has followed since the Supreme Court ruled it is a fundamental right under the Constitution of India. Many people are tracking the implications of it all with much interest. Even as this verdict was delivered, war has erupted on two turfs. It has permeated our lives in insidious ways. We, however, remain unaware about the nuances.

On one side of the ring are new-generation technology companies powered by artificial intelligence and ingenious algorithms. On the other side are incumbent entities like telecom companies that have invested huge amounts of monies to create infrastructure that the newer entities ride on.

Both these warring sides want to take over our lives. But the rules by which they seem to be playing seem beyond our comprehension. What are they really doing? To begin to understand that, we need to start with some perspective.

The many kinds of people

News reports have it that phone tariffs in India are among the lowest in the world—if not the lowest already. If we are to go by World Bank data, on average, it costs $2.80 (as computed in 2014) to operate a cellular phone. We know the latest numbers are lower. But because I thought this the most credible, allow me stay with it for the moment. At the current exchange rate, it works out to just about Rs 180 a month. How does this average out?

On the back of some informal conversations, it turns out, there are different kinds of people.

  1. Literate doofuses like me who pay in the region of Rs 3,000 or more each month for plans they had subscribed to at some point in time and haven’t bothered to check on since then.
  2. The prudent ones who will pay between Rs 500-1,000 each month to get as much bang as they can for the buck.
  3. Then there are the illiterate ones, like my neighbourhood tea and cigarette vendor whom I was chatting up early this Sunday morning. My eyes popped when he told me he spends as much as Rs 22,000 each month to call his wife and relatives back home in his native Uttar Pradesh. He carries a dumb phone, does not consume data, and is on a prepaid connection. He’d love to get a smartphone, but his perspective is that devices like this “bade logon ke liye hai” (are for rich people who can afford them).
  4. And the prudent illiterate like the domestic help at home who spends anywhere between Rs 100 and Rs 250 a month—the kinds who have mastered that now famous Indian thing of a “missed call” and hope to be called back.

Why I am a doofus was evident. It was inevitable then that calls start going out from my phone to all carriers. Overnight, the tables turned. Each operator wanted me on their network. Sops of all kinds were on offer. I didn’t know until then that unlimited talk time with free national roaming facilities for a normal price are now a norm.

What got me by surprise though was the ferocity with which every carrier tried to outdo each other with high speed data plans. Not just that, the tariffs on offer were slashed to less than a third of what I currently pay.

When and how did this battle to acquire insignificant people like me become as ferocious? Entities like telecom operators are bankrolled and valued in the billions of dollars. Why do they want me so bad? If one were to sit and do the math on the back of the tariffs on offer, from an operator’s perspective, these numbers don’t make sense.

But apparently, companies not just want to retain creatures like me, they are willing to bludgeon their balance sheets with even more blood than what is already on it. On the face of it, it sounds stupid.

Some pointers to why things are the way they are may lie in the numbers.

The one kind of companies

The first table shows the world’s largest companies by market capitalisation in 2012.

[Source: KPCB 2017 Internet Trends] 

But that was 2012. And five years is a long time. Seven of the top 10 companies in the world are now embedded in technology. The lone energy company has not just slipped down the ladder, but has lost out on market capitalisation as well while others have slipped out of sight to make way for a new world order.

 

[Source: KPCB 2017 Internet Trends] 

When thought about, what this means is that for all practical purposes, technology companies driven by data have now colonised the world. This is well documented.  What is not documented and taken as seriously though is that they now control how you and I think as well. Since 2012, our world has not just gotten flatter, but smaller as well.

The irony was not lost on me. It was only in March last year that I had argued why platforms like Facebook, Twitter and LinkedIn are snarky ones. My limited submission then was that the earlier you get out of platforms like these, the better off you are. Facebook amplifies biases, the environment on Twitter is abusive and LinkedIn violates privacy (as do the others). What I hadn’t put on the list then is the nature of the beasts that are Google and Apple. My paranoia insisted I get off all these places. But as things are, and as I have confessed in the past, I am back on most of these platforms. Not for anything else, but because I’m trapped.

Some pointers to why “trapped” is documented by Eli Pariser in his best-selling book around a phenomenon called the “Filter Bubble”, a theme on which he has delivered multiple talks as well.  

Very simply put, Pariser’s studies clearly suggest that if you and I are to post a query on Google, the results that emerge will be very different for each of us.

For that matter, the feeds you see on Facebook will be different as well.

Why? Because, Pariser explains, the algorithms that power these companies are doing their best to create, “a unique universe of algorithms for each of us…this fundamentally alters the way we encounter ideas and information.”

“Filter Bubble” driven conversations

Again, it is pertinent that we ask why. When you visit any platform that promises to offer a personalised experience, among the first things we are asked to do is sign up. And to do that, we part with information. This includes what sounds trivial like our names, age, location and gender among other things. Over time though, this information is extrapolated against the places we visit, what we do on the sites we visit and how we behave there, via pieces of software called cookies. These keep track of every move we make and capture data. Eventually, it gets to know us better as individuals than our mothers or spouses imagine they do.

Again, why should this matter?

Because we are a function of what we see and the people we interact with.

To get the import of that, step outside the digital world for a moment and look around where you live. What do you see around? Whom do you talk to? Where do you work? What are your interests? What gets your attention? What is your preferred mode of commuting? What and whom are you emotionally attached to? All of this comes together to weave a network that is our world and shapes our world view.

In the offline world, we are moulded by the voices of those whom we choose to surround ourselves with. Why should this be any different in the online world? To that extent, as Pariser observes, “Your computer monitor is a kind of one-way mirror, reflecting your own interests while algorithmic observers watch what you click.”

Now, what do they do after having watched us as closely?

Pariser has some pointers.

“…the top 50 internet sites, from CNN to Yahoo to MSN, install an average of 64 data-laden cookies and personal tracking beacons each. Search for a word like “depression” on Dictionary. com, and the site installs up to 223 tracking cookies and beacons on your computer so that other websites can target you with antidepressants. Share an article about cooking on ABC News, and you may be chased around the Web by ads for Teflon-coated pots. Open—even for an instant—a page listing signs that your spouse may be cheating and prepare to be haunted with DNA paternity-test ads.”

If that isn’t enough, consider this.

“When you read books on your Kindle, the data about which phrases you highlight, which pages you turn, and whether you read straight through or skip around are all fed back into Amazon’s servers and can be used to indicate what books you might like next. When you log in after a day reading Kindle e-books at the beach, Amazon can subtly customise its site to appeal to what you’ve read: If you’ve spent a lot of time with the latest James Patterson, but only glanced at that new diet guide, you might see more commercial thrillers and fewer health books.”

All of this is not new. Pariser’s findings have been in the public domain for a while now. In fact, that is one among the many reasons why in earlier writings I had urged we turn instead to engines like DuckDuckGo and away from platforms like Facebook. But I capitulated. Why did that happen?

As recently as last week, a Canadian news channel reported multiple concerns around what is going on. By way of example, the author writes:

“What ‘the big five’ are selling—or not selling, as in the case of free services like Google or Facebook—is access. As we use their platforms, the corporate giants are collecting information about every aspect of our lives, our behaviour and our decision-making. All that data gives them tremendous power. And that power begets more power, and more profit.

“On one hand, the data can be used to make their tools and services better, which is good for consumers. These companies are able to learn what we want based on the way we use their products, and can adjust them in response to those needs.

“ "It enables certain companies with orders of magnitude more surveillance capacity than rivals to develop a 360-degree view of the strengths and vulnerabilities of their suppliers, competitors and customers," says Frank Pasquale, professor of law at the University of Maryland and author of The Black Box Society.

“Access to such sweeping amounts of data also allows these giants to spot trends early and move on them, which sometimes involves buying up a smaller company before it can become a competitive threat.”

What it means is that while DuckDuckGo may have its heart in the right place, the search engine is an exasperating one to work with. It does not have enough muscle yet to index as much information as Google can. The latter has grown so big and can do as much as it can now because it controls 81% of the market for search. The closest competitor it has is Microsoft’s Bing—which, with all the resources at its disposal, attracts just about 7% of the world’s population who go online. DuckDuckGo does not fit into anybody’s scheme of things.

In much the same way, there is no escaping Facebook. Two billion people are on it. What chance does any social networking site stand against the might of these kind of numbers? These are the kind of numbers that make Google and Facebook larger than India or China, the world’s most populated nations.

When looked at from a business perspective, Standard Oil, the world’s largest oil refinery at its peak in the 1890s commanded 79% of the global market share before anti-trust authorities felt compelled to step in to control the monopoly. They then thought the entity a danger to the sovereign. In that sense, the big five tech companies are bigger, and perhaps more powerful than nations like India, China or the US.

So, if data is being offered on tap and seemingly at throwaway prices, it is an illusion. It is the new currency that the nations that are Facebook or Google need to lubricate their economies. And they do it via innovative business models that use the networks built by telecom operators. These operators have no choice but to capitulate and work at creating models that appease the demands placed by these “nation-states”.

In other words, “free data” is the currency to swap the “free-will”. Essentially, by accepting it, we sign off on that we are comfortable living in a filter bubble that entities like these create.

Is this desirable? Whoever would have imagined a day like this would come? Can we now think of a world without Google or Facebook?

The many possible futures

Let’s be pragmatic about this. These are seriously powerful entities that have come up the hard way by thinking through ingenious models. Whether they are evil or not is a matter of perspective. As things are, may I submit that taking on technology with more technology is pointless. On the contrary, it may just add to the noise.

What are we to do and what may the future of these entities look like?

Pointer #1: We are human

So that we may begin to understand what may the implications of all this on the future of privacy, we thought it may be a good idea to spend time with Rahul Matthan, of Trilegal. He is well known for his commentaries on these themes. And to make the conversation richer, we invited some very fine minds who are tuned in to the Founding Fuel platform to engage in a free-wheeling online conversation that started on a Friday morning. If you may have missed the deep engagement that lasted pretty much all day, you can still browse through the rich discourse and resources that emerged.

Because Matthan trained as a lawyer, while he tried to look at the multiple issues on the table from a legal prism, he also pointed out that we understand and be aware that we are human.

Pointer #2: Regulation is out of the question

On the ferocity of arguments over who is right and who is wrong, his take was a simple one. “We live in an age of incredible closeness. Technology has made it such that we can watch what is happening in Houston (down to Melania’s high heels) just as Houston can see what is happening in Mumbai. So, the discussions are much more ferocious than it ever was….”

Is it possible to regulate then?

“It is actually very hard to regulate in these environments. Because—let’s face it—there is no right answer to these questions. We can suggest solutions.”

Pointer #3: Bias is inevitable

Then, as Matthan puts it, once upon a time, “….we assumed that machines, being unmotivated by human emotion, are incapable of bias. But we are now beginning to realise this is not true. It has the same biases we have. And some more. It is this realisation that has forced us to re-think the trust we have reposed in machine-based decision making…. But with machines, the consequences can be greater because given the scale at which these decisions are made, the biases are often hard to detect.”

Pointer #4: Nothing lasts forever

Like it was articulated upfront, incumbents are heavily invested into the infrastructure. But investors have paid a premium by way of hefty valuations to those who have innovated on these pipes. Just that I may understand why, I turned to Haresh Chawla, a partner at True North, one of India’s most respected private equity funds and which manages over $1.5 billion.

He offered some sharp insights.

  • From a consumer’s perspective, the cost of switching as we traditionally understand it, from one platform to another, is zero and comes minus any friction. It is inevitable then they will move to whatever offers them what they perceive is the best offer.
  • If the five big technology companies are valued at what they are now, it is because they expended a disproportionate amount of time and effort to innovate, convince consumers they offer the most value, at zero cost and minus any friction.
  • As for incumbents like telecom operators among others who see the writing and may want to morph into creatures that can take on these entities, they are wired differently. That is why, he hypothesises, that their attempts to monetise people by trying to morph into algorithm-driven entities like Amazon, Facebook or Google will not work. “They are wired differently,” he says. By way of a metaphor, he suggests that the business model of an entity that builds tunnels through which automobiles may pass is very different from that of an automobile manufacturer.
  • If some more perspective may be needed, as technologies advance, the cost of building better and faster pipes will go up on the one hand. To that extent, it is a capital-intensive business. Management bandwidth and much money is needed to do that. What is supplied through those pipes requires people who can wear another hat and think differently.

Pointer #5: Some things are inevitable

When looked at from these lenses, two things look inevitable.

  1. Because the cost of switching is zero and frictionless, the big five technology companies will have to innovate relentlessly. To do that, they may have to resort to every trick in the book. They are creatures of paranoia. Remember Orkut? It was the social media darling until Facebook came along. What it boils down to is that if survival includes compromising on user privacy, through overt or covert means, so be it. It is entirely possible then at some point, the government intervenes. The Supreme Court ruling on protecting citizen rights is a case in point.
  2. As for incumbents who build infrastructure, as things are, given the kind of costs it takes to service a network and keep it state-of-the-art, they will need more monies. To do that though, they will have to earn more. Before they get to do that, they will first have to consolidate. There is no room for 10 of them to co-exist in a country when the content that flows through their pipes are dominated by five entities.

What is to be expected then? Consolidation, mergers, acquisitions, exits, for sure. Not to forget, selling your personal data as well for less than a rupee to whoever may want it. It is inevitable again then that state actors will step in in the form of the judiciary or the legislature.

Post consolidation and after the dust settles, much like the world is dominated by five giants, pipelines will be controlled by fewer players. The fewer the players, higher the chances of them colluding to ramp up tariffs.

Until then, enjoy the cheap bandwidth.

(This is an adapted version of Why don’t we have rainbow-coloured people? that was published in Livemint)

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About the author

Charles Assisi
Charles Assisi

Co-founder and Director

Founding Fuel

Charles Assisi is an award-winning journalist with two decades of experience to back him. He is currently co-founder and director at Founding Fuel. He writes a weekly column as well under the slug Life Hacks in Mint, India's most influential business newspaper. He is vocal in his views on journalism and what shape it ought to take in India. He speaks on the theme at various forums and is often invited by various organizations to teach their teams how to write.

In his last assignment, he wore two hats: That of Managing Editor at Forbes India and Editor at ForbesLife India. As part of the leadership team, his mandate was to create a distinctive business title in a market many thought was saturated. When Forbes India was finally launched after much brainstorming and thinking through, it broke through the ranks and got to be recognized as the most influential business magazine in the country. He did much the same thing with ForbesLife India where he broke from convention and launched the title to critical acclaim.

Before that, he was National Technology Editor and National Business Editor at the Times of India, during the great newspaper wars of 2005. He was part of the team that ensured Times of India maintained top dog status in Mumbai on the face of assaults by DNA and Hindustan Times.

His first big gig came in his late twenties when German media house Vogel Burda marked its India debut with CHIP a wildly popular technology magazine. He was appointed Editor and given a free run to create what he wanted. During this stint, he worked and interacted with all of Vogel Burda's various newsrooms across Europe and Asia.

Charles holds a Masters in Economics from Mumbai Universtity and an MBA in Finance. Along the way he earned the Madhu Valluri Award for Excellence in Journalism and the Polestar Award for Excellence in Business Journalism.

In his spare time, he reads voraciously across the board, but is biased towards psychology and the social sciences. He dabbles in various things that catch his fancy at various points. But as fancies go, many evaporate as often as they fall on him.

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