An easy-breezy attitude to sharing personal data is the only thing keeping the app economy alive

Not just Facebook, it's absolutely everyone

Someone deleting their Facebook account

Analysis Since the number of users slurped by third-party data harvesters only seems to rise, the ugly truth for Facebook may be that its growth-at-all-costs culture has led to a dramatic loss in personal privacy.

But the even uglier truth is that such data-sharing practices may be the only way the mobile app economy can sustain itself.

In the wake of Cambridge Analytica, we've taken to blaming Facebook for a problem that is actually endemic within mobile apps. Facebook may be the dominant app and, as such, the dominant dealer of your data.

Removing Facebook doesn't remove the problem, which is that the current system can't exist without copious quantities of personal data sold to the highest bidder. Nor have alternative revenue models proven any better at not leeching off personal data.

It's not a bug. It's the system

Facebook exists "to connect people," wrote executive Andrew Bosworth in 2016. He went on to describe just how far the company would go to do that.

"We connect people. Period. That's why all the work we do in growth is justified. All the questionable contact importing practices. All the subtle language that helps people stay searchable by friends. All of the work we do to bring more communication in. The work we will likely have to do in China some day. All of it."

Along the way, he said, Facebook's imperative could lead to bad things happening. He wasn't, of course, in favour of that, but he also challenged anyone to get in the way given the apparent importance of Facebook's mission. "We believe in connecting people so deeply that anything that allows us to connect more people more often is de facto good," he wrote. Not good for Facebook or its stock price, he continued, but rather for the good of connecting people.

Which is, of course, complete and utter rubbish.

Facebook is, after all, a peddler of private data. It has built a gargantuan business, driven mostly by data-generating mobile apps, by trading what it knows about its users to advertisers or, as Cambridge Analytica uncovered, other apps that participate in the personal data Ponzi scheme.

That is the whole point of Facebook. To connect people so that Facebook can profit from their data. Period. But this also describes the revenue model for most of today's app economy. If anything, it's just going to get worse, given the money at stake. As Flak42 CEO Lonn Johnston writes: "All that 'free' email, storage, music, social networking is worth at least the market cap combined of SNAP ($19B), GOOG ($720B), TWTR ($22B), FB ($464B). Your 'privacy' to four public companies is worth more than $1.2Trn."

With the app user base expected to double to 6.3 billion people by 2021, according to App Annie, and the value of each user projected to nearly triple, there's simply too much money at stake for app developers to pull back.

The app (read: personal data) economy

Consumers spend an awful lot of time on mobile and, when jacked into their devices, 87 per cent of that time is spent on Facebook. Facebook is the number-one app by far with 81 per cent penetration on mobile devices and significantly more engagement than any other app. Facebook has also been acquiring other top-10 apps like Instagram.

Let's not kid ourselves, however, this isn't just a Facebook problem. The app economy has worked like this: I give you a free app, you give me your data. Even when money is exchanged, data is used to drive more "engagement", whatever the cost. Back in 2012 I wrote about my son's addiction "to a massively multiplayer game, one that he can't seem to stop playing, in large part because the game's developer is crunching massive quantities of big data to learn exactly what will keep him on the hook."

This is the new normal. It's the very foundation of today's app economy, whether app developers are pulling data from their loose-lipped friend, Facebook, or directly gathering it through their own apps. With few exceptions, we don't pay for products in app land. We pay by prostituting our personal privacy to the app developer.

Sure, Mark Zuckerberg has issued a heartfelt mea culpa. He made a "huge" – "huge" I tell you – mistake not focusing on the kinds of abuse alluded to and dismissed by Bosworth. We've seen Facebook say it's going to tighten controls on remarkably loose and unaudited sharing of its users' data. He has promised users the same tools and controls required under European privacy rules. He could be referring to the European Union's General Data Protection Regulation (GDPR) but it's not clear. We'll probably even see a moment of genuflection to the idea of personal privacy by Facebook and other app vendors. It won't last. As noted, there's just too much money at stake.

Apple CEO Tim Cook has taken Facebook to task for its voracious appetite for creating "these detailed profiles of people ... patched together from several sources". Facebook has said it can self-regulate away the temptation, but Cook rightly argues that "we're beyond that".

Facebook doesn't know how to stop in its quest for more data. Neither, apparently, does anyone else. Indeed, as ex-pat software executive Kirk Wylie points out, it may be that Silicon Valley is the absolute last place on Earth where credible conversations about self-restraint and data can happen. The data privacy conversation "needs distance from the bubble to make it real. Getting Jack [Dorsey] and Zuck to address a group of Bay Area techies is totally non-probative".

Even if Silicon Valley could police itself, can we? As much as we may bluster, we really don't know how to quit Facebook. It has become so intertwined with how the world works – from using credentials to log into other sites to using it for school and sometimes even work. As Taylor Lorenz has written, unplugging can be more trouble than it's worth.

That's where government regulation may help.

Call in the bureaucrats

Every app developer must now see this coming. While consumers generally lack the coordination (and will?) to protect their privacy, politicians may see app regulation as an easy way to score votes.

Such regulation wouldn't shut down a service like Facebook, but closing the data spigot it provides to other apps seems like an easy win. For all those apps currently gorging themselves on Facebook user data, where do they go from here?

That's actually a question for every business in our data-obsessed world, though it's particularly germane to the app economy. As governments begin to apply old-economy regulations to the new economy (e.g. look at Uber's city-by-city transport regulator issues or consider that The Register can be sued for what it publishes but Facebook cannot), app developers will find it increasingly difficult to subsist on a steady diet of user data. This might mean, horror of horrors, that they just might have to charge for their apps, or for services accessed through those apps.

How very retro...

If you think about it for a minute, most of the $6tn App Annie sees flowing through apps by 2021 won't come from Facebook matching up advertising against personal data, or gaming companies selling virtual goods through in-app purchases. Most of that app economy involves real-world things like plane tickets (bought through an app) or clothes or books or music, you name it.

The early app economy has largely depended on social media to consume our attention, and we've shelled out our data to pay for it. But the next revolution in mobile won't require us to sell ourselves in order to get "free" access to services. No, we'll pay, but we'll pay for real things that we can enjoy with real friends in real life.

Maybe Facebook will continue to be a part of that, but odds are good that it won't be able to continue to sell our identities to the highest bidder, not with regulation looming and consumers increasingly leery. ®




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