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The business with our Social Media data

It’s an open secret that Facebook and Co. know more about us than we would like. But how exactly do they collect and use our personal data?

The social media platforms Facebook, Twitter, WhatAapp, Instagram or YouTube have one thing in common: Selling personal data is part of their core business. Last year, Facebook made a staggering 39 billion of its 40$ billion revenue by selling data to advertising companies. And there is no sign of the huge demand for personal data letting off in the future.

But how exactly is our personal data collected and sold? Let’s take Facebook as an example again: The social media giant also owns Instagram and WhatsApp and devours everything in the way of personal data it can get its hands on, even beyond the scope of its platforms. This includes websites that have a Facebook "like" button, where Facebook can gather data about website visitors (even those who have never even visited, such as the time and duration of their visit, their IP address and browser type.

Facebook has the ultimate Cookie

The situation is even more extreme for the more than 1 billion Facebook users: Once they have signed up, a so-called "cookie" is installed – a software snippet that logs a user’s browser activities and search history and sends the data back to its creator. In online marketing, these highly disputed, albeit legal tracking tools have become standard practice. What’s more, Facebook users are not only identified by their IP address, but also by a personal ID that makes them traceable across the internet, even when they have signed out of their Facebook profile.

The Facebook ID presents an interesting business opportunity because it provides a link to personal data from a user’s Facebook profile, such as age, gender, interests (based on clicks, likes, etc.), relationship status, friends, or even political views. Add to that the data gathered on Instagram and WhatsApp and in the numerous smartphone apps that users sign into using their Facebook account (because it’s so much easier than creating another account). Who does what with whom, where, and for how long? All of that is interesting information, and paired with our surfing behavior, it gives companies a very precise picture of who we are.

This is as exciting as it is scary: A psychological study carried out by the University of Cambridge showed that it is possible to determine an internet user’s characteristics – i.e. whether they are introverted, extroverted, self-confident, shy, curious, or conservative – based on just 10 Facebook likes. Based on 70 likes, Facebook supposedly knows a person better than their friends do, 150 likes give Facebook better insight than a person’s parents have and from 300 likes, the algorithm is apparently able to predict a person’s behavior better than their partner can.

The target audience in clear sight

No other data dealers can offer such a comprehensive package. Facebook allows advertising clients to pick and choose a target audience from a catalogue of options and place advertisements exactly where potential buyers will see them.

Here is an example: Company XY wants to target single males aged 20 to 30 who live in Switzerland, have a university degree and are interested in the newest gadgets and technological developments. On top of that, they want to present the target audience with sponsored posts made to look like blog posts rather than traditional advertisements. All it takes is a Facebook company account and the tool “Ads Manager”. With just a few clicks, numerous other parameters can be adapted in order to tailor the advertisement exactly to the intended target audience’s interests and place it accordingly. Possible parameters include the actual time spent on a website or visiting certain third party websites. Such a high degree of targeting is unparalleled and drives the price of advertising on Facebook up. Depending on the client’s budget, Facebook also creates custom packages.

Of course, other players such as Twitter and YouTube also want a slice of the pie. They mainly offer personalized ads which, in Twitter’s case, take into account a user’s location or the apps they have installed on their phone. YouTube’s user data, in turn, is forwarded to Google – to read more about how the other internet giant deals with privacy, click here.

The dawn of a new privacy era

On May 25th 2018, the new EU General Data Protection Regulation (GDPR) will enter into force. It aims at standardizing data protection and adapting it to the current internet situation by tightening the regulations for companies dealing in personal data, among other measures. Non-compliance may result in fines up to 4 percent of yearly revenue.

Data processing is generally prohibited without consent from the person affected. With the new regulation, this consent may not be granted in advance by checking a box during the sign-up process. What’s more, all default settings in a profile must result in as little processing of personal data as possible, and only for the particular purpose stated. The new regulation also governs numerous other aspects concerning personal data and the way they are processed. For more details on the GDPR (which also applies to many Swiss companies), click here.

What changes will the new regulation entail for social media users? And are platforms such as Facebook or YouTube even usable without leaving behind a trail of personal data? That remains to be seen.

How to slow down the data miners

These tricks and tools can help you escape the reach of Facebook and Co. at least partially.

- On Facebook, check your settings for "Ad preferences based on my settings" and "Ad preferences".

- Install a tracking blocker such as uBlock Origin in your browser to stop data leeches.

- Change the privacy settings in your Facebook profile. There is a lot of room for improvement.

- Use messenger apps like Threema or Signal as an alternative to WhatsApp. WhatsApp messages are encrypted, but the app keeps track of who you chat with and when, and even accesses data from your list of contacts.

- On Twitter, set the "Personalisation and Data" setting to "deactivate all".  This way, location data and third party apps you use will not be recorded anymore.

- Enable "private browsing" in your browser – or use Firefox: Mozilla’s browser offers numerous privacy settings for surfing without leaving a trail of data that could be exploited by advertising companies.