For the first time, it seems that you might be able to pay Facebook money instead of giving it your personal information to show you ads. During Mark Zuckerberg’s Senate hearing last Tuesday, two senators, Orrin Hatch and Bill Nelson, asked Zuckerberg if he would let Facebook users pay for the service, instead of relying on collecting data to fuel the current ad-supported business model. To these questions, Zuckerberg responded that “there will always be a version of Facebook that is free.”
This implies that having two versions of Facebook, one paid and one free, is in fact a possibility. Shortly after, Facebook COO Sheryl Sandberg said in an interview that a paid product is not out of the question. This is big news because moving away from the purely ad-supported business model means moving away from how most of the internet is currently financed.
By now, many have suggested that we move from a targeted-ad-supported internet to a pay-for-the-service internet or that we should otherwise monetize our personal information. Some simply divide Facebook’s annual revenue by its number of users. So if Facebook made $40.1 billion last year, and it has 2.2 billion users, each could pay $18.50 annually — although to know how much your data is contributing to Facebook’s revenue, you should adjust that by region and every other demographic it has about you. Others point to companies with different business models, like Salon, which profits from using consumers’ computers to mine bitcoin instead of mining their data. In the House Committee hearing, Congressman Paul Tonko suggested another approach, asking Zuckerberg, “Why doesn’t Facebook pay its users for their incredibly valuable data?” The problem with these proposals, and with the suggestion of a paid and privacy-respecting Facebook that many hope might someday happen, is that you can’t simply monetize your data. Monetizing your Facebook data might be unworkable, it’s not profitable for Facebook, and it might even cause further problems.
Monetizing your Facebook data is difficult because, unlike money, data gives endless profit possibilities in the long run. For example, if Facebook served me ads for ultra-comfort sneakers, modern furniture, and sportswear (don’t judge me), it’s because Facebook has decided I might buy these products. But Facebook decided this not based on information it gathered this session, or this week, or this year. Facebook’s targeting choices are based on information collected about me since I joined the platform back in 2007. Whatever Facebook shows me now reflects years of mining my data. Therefore, what is most valuable to Facebook today is not the few minutes of my attention when I visited the website, but the accumulation of hundreds of those minutes in which it learned about me.
Moreover, monetizing your privacy is not only about what it’s worth to Facebook but also about what it’s worth to you, and this is difficult to see because pieces of information combine in unexpected ways to reveal more information about you. Facebook and other companies following the same business model, such as Google, can learn a host of unexpected things about us from the different pieces of information that we give them. For example, if you use any wearables, combining data from an accelerometer and a gyroscope determines if your movements are steady or shaky, so can inform your level of relaxation at any time. A company that has as much information about us as Facebook and Google do takes this unexpected assembling of information to a whole new level. This is crucial for monetization because the way that information combines makes it close to impossible to say how much information is worth to a company or to you. Of course, full knowledge of all future aggregations would solve this. But this is hardly possible because adding up what is collected now and what was collected yesterday depends on context, and no one knows what new information will arrive in the future.
As if that were not enough, your Facebook information combines not only with other information about you but also with information about others. Information about other users is crucial to how Facebook extracts profit from you because that is how it guesses what you might like. The company knows that a person with my demographics might like modern furniture because a lot of other people with my demographics have demonstrated that preference on Facebook. For that reason, if half of the people with these demographics drop out of an information-supported Facebook into a pay-per-month Facebook, the ad-supported profit derived from all the rest of us wouldn’t simply be half of what it currently is; it would be much lower.
Lastly, the value of my information to Facebook, and its value to me, depends not only on what information is collected, but also on how it’s used. The Cambridge Analytica scandal is the perfect illustration of this. Even if we overcame all of the difficulties mentioned above, to monetize someone’s personal information we would need to know exactly how it will be used.
So this is the bad news: While Facebook might offer an option to pay instead of having targeted ads shown, it’s also likely that people purchasing such an option will have their personal information collected anyway. Zuckerberg hinted there might be a version of Facebook that is not free, but he never hinted that he might stop collecting your data. And Facebook is only one example of a ubiquitous business model.
The reason this is bad news is that the most important problem with the current business model is not renting out spots for targeted ads. The problem is what is done to make these spots valuable: collecting users’ personal information indiscriminately. Not viewing ads might make for a more pleasant browsing experience, but it will not solve Facebook’s privacy problem.
The way forward is not to get rid of ads through payment or regulation but to better enforce norms on appropriate collection and dissemination of our private information. Ridding social media of ads will not prevent the next Cambridge Analytica. Understanding what are appropriate ways to collect and disseminate consumers’ personal information to support them might.
Ignacio Cofone is a postdoctoral research fellow at the NYU Information Law Institute. His research focuses on information privacy law and behavioral economics. Before joining NYU, he was a resident fellow at the Yale Information Society Project and a legal advisor to the City of Buenos Aires.