Social networking dividend - the privacy angle

When will my social networking dividend cheque show up? If you think about it, participating in a social networking website, like Facebook or Flickr or even Google, is like working for (almost) nothing. When will they start paying us for a) creating all that content, and b) learning what to buy? The time is coming, I predict. And privacy concerns and legislation may hasten its arrival.

Three or four years ago, as social networking sites began to proliferate, I had a little ramble in front of my class about the coming day when we'd be paid to participate in such things. It seemed reasonable, since we were labouring (watching ads) and providing the raw material (posts, photos, search strategies) that was turned into a valuable product (Facebook, Flickr, Google) that was being used to reproduce the whole chain - people are attracted to a popular site.

As appealing as a Flickr/Facebook/Google dividend might sound, it hasn't happened (yet). Why not?

Let's break down the labouring part.

The first part of the argument comes from an extension of the "audience commodity," an insight, from almost three decades ago, by my former teacher and colleague, Dallas Smythe. Dallas was a political economist who worked for the FCC early in his career, moved to Canada in the 1960s and ended up in Vancouver, working for Simon Fraser University in the 1970s. He wrote, in the Canadian Journal of Politcal and Social Theory, that when we are watching television we are working (learning what to buy) and reproducing our labour power (learning that capitalist work is the natural work of all human being) and that work is what networks sell to advertisers.

One of the students I supervised this past year put Smythe's theory - which was anchored in the media environment of the 1970s - together with current web trends and came up with the notion of a "participant commodity." He updated Dallas' ideas for the 21st century and argued that the people who take part in social networking sites are also labouring when they look at all the banner ads surrounding the site.

In our discussions, and as drafts went back and forth, I argued that people were doing more than just working by socializing and watching ads, but they were bringing in the raw materials - the photos, the status updates, even their choices of which "hit" to click on when Google presents a list of ten possible search results. It was like we were being asked to work in the factory (Flickr, say, or Facebook) for free AND we were being asked to bring in the basic materials for the final product. The factory owner was providing the machinery (software, internet connectivity) but none of the labour or the material inputs.

Transfer of information assets is an additional aspect to the argument. All our personal information, transferred to Facebook, Flickr, and Google during the signup process and enhanced as we add to, revise, and extend those profiles - either explicitly by filling in forms or implicitly through patterns of use - is of enormous value and is used to "upsell" advertisers by offering them targeted segments of the population for their ads.

Stephen Anderson included this in his Masters thesis, and I think it is a serious critique of social networking sites. It is probably the most important part of his thesis, in my view, and as soon as a copy if available I will update this post with a link to it. The critique, however, is just a critique and doesn't take us the next step - what should we do about it?

There are two possible next steps. We could throw down our chains and overthrow our capitalist bosses and live a life of socialism. Marx thought that eventually the contradictions of capitalism would be so great that this would be inevitable. So far, that hasn't happened, and it appears less and less likely as the years go by. Capitalism last faltered in the 1970s and currently seems robustly in charge, having "won over" both the Chinese and the Russians. Even Cuba is now selling cell phones.

Alternatively, we could try to mitigate the harm of capitalism and recover some of the lost wages for all this free work we are doing. In other words, the next step is a repayment for all that labour, in the form of a social networking dividend.

Before we get too far in this, we should be clear that people who labour for Flickr / Facebook / Google (and the rest) aren't being entirely exploited. We aren't getting nothing for our time. All of these sites are incredibly useful (or entertaining, another form of value) and they are expensive to build and run. The factory owners have built and maintain a very elaborate factory. And we aren't forced to work there. We update our status in Facebook, upload to Flickr, and search in Google because these sites are giving us something we want. In other words, the argument I am making isn't premised on the notion that people are mindless slaves without any agency (free will).

How would a social networking dividend work? A few people see it from a very entrepreneurial perspective and imagine an alternative, competing universe of social networking web sites that provide cash-back to the members. This might work indirectly, like airline or grocery store points systems, or more beneficially as happens in a co-operative. If you use a system like that you get something back at the end of the year or month.

Google provides a version of this in their AdSense program and Amazon has their "affiliate" program. Neither of these is focused on end users, however, and is targeted at the "middleman" who creates a blog or otherwise works to create complementary assets (e.g., blog posts or book reviews).

End users, I suspect, are too diffuse and hard to track, and perhaps the amounts would be too trivial to bother calculating. And, of course, users have no leverage in terms of negotiations with these large internet companies. Who has time to work out an agreement, and who would want to implement some sort of additional tracking mechanism, even if you could. The logistical, practical, and privacy implications are clearly "deal breakers" for such an initiative.

And yet.

Surely we don't have to be resigned to the current state of affairs. What if there was a mechanism that didn't require individuals to go through additional hoops, and a mechanism that enhanced their privacy, rather than eroded it? I think such a mechnanism is possible, at least for people who are members of some real-world community with technical resources, like a large company or university or - conceivably - an ISP.

The three ingredients to making this happen are aggregation, privacy enhancing technologies, and information liability concerns.

First, aggregating users needs and negotiating a better deal for everyone is something that large organizations already do, typically in the form of group insurance benefits such as extended health or life insurance. My own institution does this and it results in lower premiums and better coverage than I could negotiate on my own. Employee groups typically negotiate this sort of benefit, which enhances employee health and peace of mind, and that makes for a happier work situation for everyone. Although often sparked by a union, staff associations, and even just corporations without a union, also seek these sorts of agreements since they are a "perk" that employees look for when being hired. It helps with acquisition and retention of employees.

Second, we have to realize that privacy enhancing technologies do exist. The best of these run in the background and protect us even without us thinking about it. A typical one is the encryption that banks and online retailers use to ensure that transactions through the web are protected between the browser and the server, no matter what segment of the internet you are using. Corporations with employees in the field typically extend this sort of protection to all internet activity through the use of "virtual private network" (VPN) technology between a remote laptop or home worker and the corporate network. The proliferation of wireless networks, in particular, has led to the development of "802.1X" technology allowing organizations to reach out to their staff and provide them with a secure network connection no matter where they are.

Third, we have to think of social networking software and web sites, even google searches, as vectors of personal information "leakage," and thus a potential liability. When you participate in a site like Facebook, Flickr, or Google, you are conveying a large and growing amount of information about yourself, to them. As noted above, this information is used by social networking sites to raise your value to advertisers. In that sense it is an asset to them. But it could also be a liability, if you come to harm through the use or misuse of that information. To the extent that you are a member of a community (firm, university, even customers of an internet service provider), and your use of the internet is facilitated by that organization, then misuse of your information may be a liability on their part, too.

I think we have to think about information sharing in terms of risks and liabilities and we have to hold the providers of internet connectivity as potentially complicit in that process. In other words, it is in their interests to protect you.

Protecting all the customers of an ISP, employees of a firm, or members of a university community sounds like a daunting and expensive task, but it needn’t be. And even if it is costly and difficult, it is the right thing to do and if it is done right it might even be the pathway to a dividend for our use of social networking software. In other words, we could make protection pay off for a group of people who participate. Here is how it might work.

If a large organization is providing internet connectivity to its members, as universities do for example, then it is already aggregating demand and providing a single “pipe” to the internet for those members. If we add privacy enhancing technologies to that pipe, we can reduce personal and institutional liabilities for any information leakage that might occur and we can consider negotiating dividends for the members who participate in those sites. These sorts of dividends, in the form of lower premiums for participants in group life insurance for example, are already part of the institutional practice and individuals’ work experience. Why shouldn’t we get them from Facebook, Flickr, and Google?

There may be legal as well as financial reasons for moving in this direction. Privacy legislation in British Columbia (Freedom of Information and Protection of Privacy Act, 1993) limit the ability of BC organizations to have personal data stored or processed outside of Canada. Proposed revisions to the act go further:

“(a) organizations are responsible for the personal information they transfer to a third party for processing or for providing services to or on behalf of the transferring organization; and
(b) organizations must use contractual or other means to ensure compliance with PIPA, or to provide a comparable level of protection, for personal information they transfer to a third party for processing or for providing services to or on behalf of the transferring organization.” (Streamlining British Columbia's Private Sector Privacy Law).

If these come into force, they could be interpreted to require organizations to step in when their employees or members participate in social networking or otherwise engage in the transfer of personal information.

This is already happening, to a limited extent. It is technically possible to present users of third party web sites as being “authentic” without any personally identifying characteristics being transferred. My own university is doing this with the iTunesU service, by sending an encrypted certificate to Apple’s servers, rather than a user name and password. All Apple knows is that someone SFU has authorized has visited the site.

A few years ago, when I first proposed this idea to my students, it sounded pretty fanciful. I was imagining some sort of co-op arrangement where people would spontaneously band together and negotiate better benefits for being forced to watch banner advertising (which was the innovation I was reacting to at the time, little did I know how much worse commercialization of the internet could and would get in the years to come). I didn't know about the technology that might allow a large organization to anonymize its users, nor did I anticipate the effect of privacy legislation as making personal information leakage an institutional as well as a personal liability. Technological advances in privacy enhancing technologies, along with legal changes that make information leakage a liability and therefore a motivation to institutions, seem to be bringing this idea closer to fruition.

In my own organization, I have proposed the idea to our head of network services. I will continue to press forward for a working example of this, and perhaps it is something that will take off in other jurisdictions and among other organizations. Several firms already provide VPN on demand services, so it should be possible for them to also offer this type of aggregation in return for dividends (liabilities down, financial returns up).

Updates:

Clay's original post continues to attract attention long after. Here is an example:

http://communities_dominate.blogs.com/brands/2008/05/gin-television.html