Facebook isn't 'free' when the cost is your data — and Zuckerberg knows it

It began with Tim Cook being interviewed by Kara Swisher and Chris Hayes, following Apple's education event in Chicago.

From Recode:

Cook made that point again today: "The truth is, we could make a ton of money if we monetized our customer — if our customer was our product. We've elected not to do that."Swisher posed a question for Cook: What would he do if he were Facebook CEO Mark Zuckerberg? His answer: "I wouldn't be in this situation."

Mark Zuckerberg responded during a podcast with Ezra Klein.

From Vox:

You know, I find that argument, that if you're not paying that somehow we can't care about you, to be extremely glib and not at all aligned with the truth. The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can't afford to pay. And therefore, as with a lot of media, having an advertising-supported model is the only rational model that can support building this service to reach people.That doesn't mean that we're not primarily focused on serving people. I think probably to the dissatisfaction of our sales team here, I make all of our decisions based on what's going to matter to our community and focus much less on the advertising side of the business.But if you want to build a service which is not just serving rich people, then you need to have something that people can afford. I thought Jeff Bezos had an excellent saying on this in one of his Kindle launches a number of years back. He said, "There are companies that work hard to charge you more, and there are companies that work hard to charge you less." And at Facebook, we are squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use.I don't think at all that that means that we don't care about people. To the contrary, I think it's important that we don't all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you. Because that sounds ridiculous to me.

Then, during Zuckerberg's testimony before the U.S. Senate, photographer Andy Harnik managed to grab a shot of his notes.

From Associated Press:

Tim Cook on biz model

  • Bezos: "Companies that work hard to charge you more and companies that work [hard to charge you] less."
  • Ay FB, we try hard to charge you less. In fact, we're free.
  • [On data, we're similar. When you install an app on your iPhone, you give it [access to] information, just like when you login to FB.
  • Lots of stories about apps misusing Apple data, never seen Apple notify people.
  • important you hold everyone to the same standard.

Where to begin?

No such thing as 'free-as-in-your-data'

Cook's comments, which came on the heels of an education event, are consistent with his and Apple's philosophies and policies going back years. Apple charges for hardware and some software and services, and uses that income to subsidize a much larger pool of software and services, including iOS, macOS, iWork, iLife, free apps on the App Store, the basic level of iCloud, iMessage, Apple News, and more.

When Cook says he wouldn't be in this situation, it's because he's chosen to work at, and continue to operate, a company whose business model allows it to have users that are also customers, and line up behind the privacy and security of those users-as-customers.

Zuckerberg's comments, which came in the midst of whatever the tech CEO equivalent of a celebrity contrition and redemption tour is, felt fresher and more raw. Almost angry. He goes as close as he possibly can to calling Tim Cook a liar without using that word. And it's ironic, given the utter lack of truth in Zuckerberg's comment.

Facebook isn't like Amazon. I won't delve into Amazon's sometimes predatory pricing strategies here, but in essence, it still charges you money for goods or services. Facebook charges you data and attention. And that's not charging anyone "less" at all — depending on your perspective, it's charging much, much more. It's charging something that not everyone may value but that is, in many ways, priceless.

Further, the implication that those who can't afford to pay in money should be grateful they can pay in data is insensitive at best, horrifying at worst.

In essence, Apple charges you for a meal. Facebook gives you a lobster dinner and then sits there, leering at you.

And that isn't "free". "Free-as-in-data-and-attention" isn't "free". Again, depending on your perspective, it's radically more expensive.

Fool me once

On the subject of user data, Apple and Apple developers have certainly made mistakes in the past. Location data, Path, Uber, and Facebook itself have all had incidents. Yet, in each case, Apple added protections, called CEOs to the carpet, and amped up the security of the platform. In other words, Apple worked hard not to make the same mistake repeatedly.

Facebook, on the other hand, has a history littered with incidents followed by apologies that ultimately led to very little change. That Zuckerberg is sitting before the U.S. Senate now shows how seriously he and Facebook have taken privacy up until now. Privacy theater would be a fair way to put it.

And people can tell. Over time, over incidents, the difference becomes apparent. It happened with Eric Schmidt at Google and it's happening with Mark Zuckerberg at Facebook: That subtle shift from when you think they're naive to when you realize they think you're gullible. From when you think they're not being candid to when you realize they think you're too dumb to know they're not being candid.

Data isn't a business model

The truth is, using data to provide services is completely separate from exploiting that data for advertising, marketing, or influence peddling. Using a stream of data for machine learning is completely separate from persisting and hoarding that data for other uses.

You can subsidize deeply personal services the way Facebook (or Google) does, absolutely. But you can also subsidize deeply personal services in other ways, including hardware profits, the way Apple does.

Zuckerberg's whataboutism notwithstanding, Apple and Tim Cook have been long on privacy for years. Even when it looked like people didn't care — that data in exchange for services was a great deal — Apple and Tim Cook believed that the sentiment would change. That it would have to.

What's happening with Facebook right now and the way Mark Zuckerberg is choosing to react to it sure makes it seem like they were right.

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Rene Ritchie
Contributor

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

24 Comments
  • I don’t understand why so many people are upset with Mark Zuckerberg. He is just giving you what you want, although you might be wondering why he collects all your personal information. Turns out Senator Orrin Hatch would like to know… “So, how do you sustain a business model in which users don’t pay for your service?“ asked Sen. Orrin Hatch, the Utah Republican. Zuckerberg could hardly contain a smirk as he replied: “Senator, we run ads.” Two reasons really, one he doesn’t think you care and two he can sell it to cover his expenses. An early email exchange…
    Zuck: Yeah so if you ever need info about anyone at Harvard
    Zuck: Just ask
    Zuck: I have over 4,000 emails, pictures, addresses, SNS
    [Redacted Friend’s Name]: What? How’d you manage that one?
    Zuck: People just submitted it.
    Zuck: I don’t know why.
    Zuck: They “trust me”
    Zuck: Dumb f….(expletive deleted) Now he deletes his sent messages from the recipients computer. Creative Strategies ran a study across 1000 Americans who are representative of the US population in gender and age. "When we asked our panelists if they would be interested in paying for a Facebook version without advertising and with stricter guarantees of privacy protection 59% said no.”
    FaceBooks 2017 revenue was $40 billion with about two billion active users. If 40 percent are willing to pay the cost of a no tracking no ads service it would cost less than $5.00 a month. I pay $5.00 just to read Medium articles and I doubt that advertisers would still want to serve ads to the remaining 59 percenters in any case. Problem Solved
    Duane
  • Aside from the data mining, the fact that Facebook doesn't allow third party clients, the website works like ****, the app works like **** and drains battery, ads are plastered everywhere. I'd say we have many reasons to hate Mark Fuckerberg
  • No you don't. But you do have justification to not use the service.
  • Are you trying to tell me Mark Fuckerberg has no relation to Facebook? Aside from being the co-founder, chairman and CEO of Facebook…
  • Advertisers are stupid if they think they're getting $5 worth of ad viewing from me.
  • The difference between Apple's stance and the Dumb F$#@ is obvious. Zuck and FaceBook simply cannot be trusted and are a danger to democracy. I have deleted my FB account. Have you?
  • Good man! I hope you encourage others to do the say. Consider shared Photos albums for sharing pictures. They can work via website and even support comments.
  • I haven't had one for a long time, but I odn't matter. The fact and the matter is, most people have one and most people care about keeping "in touch" with their "friends" on Facebook. They don't like being out of the loop. They want to be invited to all the parties and get togethers, even if they never go to any. They like being in those groups, and they enjoy the opinion echo chambers because it validates them to some extent. This is why Zuck is right when he said the amount of people that did #DeleteFacebook is not anything they need to worry about. Platforms like Microsoft and Apple could easily build in rudimentary social features (Shared Photo Streams is one, Microsoft used to have Social Features in Windows Live, but removed them... etc.) but these companies are all complicit I ceding this market to Facebook. The fact and the matter is, we had a lot more options and they've actually removed quite a bit of them. Now they're acting like they're some alternative to Facebook, when they aren't. Apple can't replace Facebook - and neither can their services. Same for Microsoft. The only company that legitimately can replace Facebook is Google (with Google+), and that's trading one Big Brother for another. At the end of the day, Users are the cause of their own discontent. The hive mindset that has predominated internet culture is what has enabled companies like Facebook to monopolize entire markets (by dominating them, or buying up the competition i.e. Instagram, WhatsApp) and productize their users. There is way too much emphasis on "Free." This won't change until people are willing to get off the internet, socialize more in the real world, and be willing to actually pay for good products that don't exploit them.
  • Nope. I control my Facebook account. I have no problem with the data collection that is going on or I wouldn't be using the service. Simple as that. All about choices.
  • He isn't wrong about them not being trustworthy and being a danger to democracy, though. Of course, no one is forced to delete their Facebook account, nor should you feel guilty about not doing so
  • Let's not think Apple is totally innocent in this, despite Tim Cook's patronising comments. A piece was published in the Sydney Morning Herald on 11 April by an iPhone user who was more than a little chilled by a traffic advice notification he received from Apple Maps, which he does not use at all. "Here is an app that I don’t use that knows not only where my daughter goes to day care, but seemingly what days she goes and roughly what time we are taking her there."
    https://www.smh.com.au/technology/dear-apple-while-we-re-talking-about-c... While I have never trusted Facebook, and take a number of measures to limit the data it can collect on me, I don't trust Apple or Google either. Google at least has some transparency about collected data, and allows you to view and download it. Apple does not, but they do collect user data. Their legendary secrecy makes them creepier for me, and Tim Cook sanctimoniously preaching concern over privacy doesn't help that.
  • Apple does that all on your phone. It is never sent to Apple. That is simple machine learning.
  • Indeed. Apple really doesn't like you sending information to them when unnecessary, although that does add limitations like Siri's ability to provide relevant information. Apple asks you if you want to share some stats when you first set up your device, but if you disagree, there's really very little that's sent.
  • As DBSync points out, the difference is, the phone does the work, not some server across the country. A misunderstood fact out of context does not lead to any kind of equivalence in this context whatsoever.
  • I agree. I don't have any blind trust in any tech company (or any other company for that matter). So for me, Apple's secrecy is concerning. Transparency is always best. Apple does collect some data, no matter how little they may claim it to be, and transparency would allow the phrase "Trust, but verify" to ring true.
  • The data they collect is detailed when you first set up your phone, at which you can say "please don't collect this data". There is possibly some more, but it is little, and that's not just a claim.
  • Yet, you still don't address the transparency, or lack of. Apple should be transparent about what they collect daily. I should be able to look into my account, just as I do with Google, and see exactly what they data they have regarding my usage of device and services. I mean, are you against transparency or something?
  • I agree Apple should be more transparent. But if I was to ask which was worse out of providing transparency and mining large amounts of data, or not providing transparency but only taking the smallest amount, I'd say the former.
  • While I don't share your sentiment, I can appreciate your point of view.
  • And anyone who says things like, "...and not at all aligned with the truth..." is simply incapable of telling the truth in a straightforward manner. Such language is a clear sign the speaker has something to hide. Smoke and mirrors. I love big words and fancy language, but in such a context, such nonsense is a dead giveaway. What's wrong with, "...not true?" Because it's too literal and less likely to spin in the future when you get caught ignoring the promises you have been making for 14 years Zuckerberg.
  • to explain privacy easy : i buy a car and you can use it. it is free take it BUT i wanna see your driver license first
    i wanna know where you go at all time
    i wanna know who travels with you
    i wanna know where and what you eat
    i wanna know what you buy
    i wanna listen to any conversation inside the car
    i wanna know what music is playing
    i wanna see who is writing you
    i wanna see all pictures you taken on the road trip not sure if i got everything but that what facebook does but they dont give a free car they give an app
  • And a pretty terrible app at that. I continue to use a custom client for Twitter, if Twitter ever blocks custom clients I'd stop using it.
  • More FUD
  • It's more uncertainty and doubt, rather than fear. I don't think anyone is scared of Facebook, but if you're concerned about your data being collected you shouldn't be using it.