Surveillance capitalism: social media’s economic model

Social media corporations are extremely profitable. Facebook’s revenue jumped from $2 billion in 2010 to $70 billion in 2019 (Statista 2020). Unlike other corporations, the social media platform’s “users” are not clients or customers. The platform’s customers are corporate and political advertisers with interests in persuading and manipulating the public towards specific goals. Platforms do not sell a product to their users. The product sold to advertisers is the user’s personal experience and data.

Like newspapers, TV' and other media, social media platforms like Twitter, Google, YouTube and Facebook make a profit by selling advertisements. For a fraction of the cost of placing an advertisement on television, newspapers or magazines, ads on Facebook can target specific groups of people. Facebook calls this its “Custom Audiences” program. Social media corporations attract millions of advertisers because they can offer them targeted advertising that allows advertisers to reach the people that might be interested in their product. As of July 2020, nine million advertisers put ads on Facebook (Statista 2020).

Social media platforms provide free communication platforms for people in exchange for extracting information on users. Platforms collect “data points” on everything we do on their platform. They harvest data on users to create psychometric profiles that are then sold to advertisers with interests in persuading and manipulating the public towards specific goals.

Billions of people post information on social media about themselves every day, including information about what they like, who they know, where they are, what groups they belong to and comments and photos of themselves and others. Many posts, especially photos, include information about people who give no consent to having their image posted. These photos, paired with facial recognition technologies, create data points.

Social media companies collect this data to create psychometric profiles of each user. Facebook also collects information from people who do not even have an account on Facebook. Facebook can gather information about nonusers who use other websites or applications that link with Facebook (Ingram 2018). Psychometric profiling provides advertisers with information based on users’ online activity. It includes the biographical data they enter, including their gender, religion, age, etc. It also includes information on their friends, the posts they like or share, their geographical location and any other information gleaned from the user’s social media engagements. This information allows corporate and political advertisers to tailor their ads to these “custom audiences” (Bashyakarla 2018).

Harvard Business School professor Shoshana Zuboff calls this economic model “surveillance capitalism” (Zuboff 2019). Surveillance capitalism harvests private data and experiences and then sells access to this data. This economic model monetises private experiences based on tracking or surveilling their every click on the internet.

Table 1.1 illustrates the costs and benefits for seven stakeholders in social media. Social media platforms give free access to users in exchange for extracting private information and the user’s attention. Non-users are often unaware that social media companies monitor their activity on sites linked with social media platforms. Corporate and political advertisers pay platforms in exchange for access to information that allows them to target certain users and buy access to their attention. Advertisers profit because they can more easily target ads to people who may be interested in their product. Since advertisers can identify potential buyers with much more specificity, they can save money by buying access to the people most likely to buy their products. Facebook data collection also provides information to governments, if Facebook deems the requests are legal and meet their guidelines. It is not clear if governments pay Facebook for this data. And shareholders give investments to social media companies in return for a share of profits.

Table 1.1 Social Media Stakeholder Analysis

Social media platforms like Facebook collect information on billions of people— at least half of the human race. The number of requests by governments to Face- book for user data is steadily increasing as governments seek out information stored as part of Facebook’s profiling data. Facebook’s December 2019 Transparency Report reports that over 100 countries made over 140,000 information requests to Facebook between January 2013 and April 2018 (Facebook 2020).

Facebook’s economic model in the Southern Hemisphere has been to expand the number of people using its platform since every new person using Facebook provides data that can be sold to advertisers. In 2013, Facebook started its “Free Basics” program, which provides restricted internet access free of charge via a Facebook portal. Cell phones sold in these regions would come loaded with Facebook, and people would think of Facebook as the internet itself. Facebook pitched the Free Basics program as increasing internet access, especially for those who cannot afford to buy service. But Free Basics offers a different version of Facebook than available in Western countries. In Cambodia, Bolivia, Sri Lanka and other countries, the Facebook News Feed on Free Basics excluded stories from reputable news sources while in some cases allowing and amplifying fake news stories that people share. This gave the public open access to information agreeable to the government media regulators—including disinformation—but restricted access to accurate news sources (Frenkel, Casey, and Mozur 2018). A Slovenian journalist critiqued Facebook for running massive social media experiments on “small countries with shaky democratic institutions” and “showing a cynical lack of concern for how its decisions affect the most vulnerable” (Dojci- novic 2017). By 2016, India ended Free Basics program in response to outrage from civil society digital rights activists who opposed the program as a violation of net neutrality. But by 2020, Facebook had spread Free Basics to at least 32 countries in Africa, in part by investing in civil society organisations and tech companies in Africa, which seems to have reduced local opposition (Nothias 2020).

Public loyalty is also important to the business model of social media companies. Tarleton Gillespie describes the challenge that social media companies lace in their torn loyalties to “customer-users” and profit-driven investors in his book Custodians of the Internet: Platforms, Content Moderation, and the Hidden Decisions that Shape Social Media. (Gillespie 2018). The public’s loyalty to a social media platform requires trust that users will not unintentionally encounter pornography, hate or violence while scrolling through their news feed. Negative stories about social media’s role in undermining elections and fostering extremism from 2016 to the present also impacts public loyalty. For example, Facebook lost $118 billion of the stock value in July 2018, following news stories of the company’s anti-social roles (Solon 2018). While governments continue to discuss public privacy concerns on social media, the pressure to change the basic economic model is lacking.

Social media companies have more clearly identified their privacy settings and policies. These options give users partial information about what types of information are collected. But often the privacy policies are simply legal signoffs; if a user wants to use the platform, they sign away their privacy rights.