Data Barons: Will tech hoist them on their own petard?

02 Feb,2023



By Ashoke Agarrwal


Ashoke AgarrwalThe past three decades have seen the rise and rise of the Data Barons, chief among them Alphabet and Meta. Like the Robber Barons of old, these giants have infringed on private and public rights and sought to profit even if it meant causing harm to individuals and society at large.


When Google and Facebook started, their implicit pact with consumers was to provide them with quality free services. However, what was in it for them could have been more explicit in the compact. But it wasn’t. I do not believe that Google and Facebook, at first, were clear about their business model. In time, however, they discovered the gold mine, consisting of sneaking in on users, hoarding their data and then using it to permit advertisers and marketers of all sorts to target them with messaging. Apple has, up until now, resisted the temptation to Data Barondom – probably because they are busy mining a gold mine of their own. However, as innovation flags, Apple is seriously considering adding advertising to its revenue stream. Over the past few years, Amazon has also set out on the road to Data Barondom. In the case of Amazon, though, their core compact with consumers of selling them goods and services makes targeting advertising to them a natural corollary. Soon the OTT giants Netflix and Disney Plus will bid for Data Barondom of their own.


However, in a few years, these Data Barons will be reined in. The EU’s GDPR is just a first step. In time the same technology that enables these digital giants to make money based on an individual’s private data will be used to force them into a more equitable arrangement. Hoist on their petard.


Let me explain. Linear TV and print publications serve advertising en masse—the contract to air an advertisement on specified time slots or pages on a specific day or issue. Media planners expect the ad to reach a certain quantity and type of target audience. However, there is no way to isolate the serving of the ad to a specific individual.


On the other hand, every digital screen, be it a smartphone, a tablet, a laptop, a PC or a connected TV, can be linked to a specific user. All the powerful platforms insist on a user signing in before usage.


In this case, the contract is, at the core, to serve an ad to a particular individual. And this fact will allow the platform to share the revenue it generates from the advertisement with the individual! But, of course, this will only happen if forced by regulation. Later versions of rules like GDPR will likely get around to doing so.


These rules will allow an individual to pay upfront for an ad-free service. However, if the individual opts to receive ads, his subscription fee will be deducted from his share of the ad revenue.


While this rule will pay the individual for the use of what is essentially his property – his data and his attention – it will still leave the question of the echo chambers that the algorithms that social media platforms use to increase engagement.


While the harmful effect of these echo chambers is evident, any effort to combat them through regulations runs into the larger argument that free speech is a foundational human right. Every piece of content put out into the public sphere – books, journalism, entertainment – puts out overtly or covertly a point-of-view. It is up to the individual how she responds to that point of view. It is best to combat the rise of echo chambers using the open vistas of free speech.


However, all the above arguments could be moot in a decade or two. Advertising will give way to two-way messaging between an individual’s AI avatar and the AI engine of brands and platforms. I envisaged this in my MxMIndia column dated January 6, 2022 titled ’The Coming Post-Digital Age’.


As for social media algorithms that control what users see, they will go the way of linear TV. Instead, the algorithms will have to negotiate the feed with the individual’s AI avatar. And the individual will control the settings on her avatar. So AI will progress to be not the Big Brother that some people fear but an individual’s brother from another mother – protecting and enabling. Or it could be both. Whichever, we are set for an exciting ride into the AI era.


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