Philosophy

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BUSINESS ETHICS QUIZ 3 PROFESSOR McSHANE

DUE THURSDAY, MARCH 17, 2022 BEFORE CLASS.

Read the article from Harvard Business Review below as well as the article by Shoshana Zuboff called “Surveillance Capitalism and Social Media” that follows it.

Then answer the questions at the end.

Write one paragraph for each question.

Email your responses to [email protected]

ARTICLE 1.

ONLINE ADVERTISING AND PERSONAL PRIVACY (Harvard Business Review)

Executive Summary

Data gathered on the web has vastly enhanced the capabilities of marketers. With people regularly sharing personal details online and internet cookies tracking every click, companies can now gain unprecedented insight into individual consumers and target them with tailored ads. But when this practice feels invasive to people, it can prompt a strong backlash. Marketers today need to understand where to the draw the line.

The good news is that psychologists already know a lot about what triggers privacy concerns off-line. These norms—and the authors’ research—strongly suggest that firms steer clear of two ad-targeting techniques generally disliked by consumers: using information obtained on a third-party site rather than on the site on which an ad appears, which is akin to talking behind someone’s back; and deducing information about people (such as a pregnancy) from analytics when they haven’t declared it themselves.

If marketers avoid those tactics, use data judiciously, focus on increasing trust and transparency, and offer people control over their personal data, their ads are much more likely to be accepted by consumers and help raise interest in engaging with a company and its products.

In Brief

The Change

The widespread sharing and collection of personal data online has given marketers unprecedented insight into individual consumers, enabling them to serve up solutions finely targeted to each person’s needs. But there is also evidence that this practice can lead to a consumer backlash.

The Digital Dilemma

Marketers need to understand when personalized ads will be met with acceptance or annoyance. Social scientists already know a lot about what triggers privacy concerns, and these norms can inform marketers’ actions online.

The Insight

Consumers dislike two techniques: using information obtained on a third-party website rather than the site on which the ad appears; and using inferred information about the consumer (for instance, about a pregnancy). Understanding their objections can help companies create ads that honor consumers’ privacy expectations.

ONLINE ADVERTISING AND PERSONAL PRIVACY

The internet has dramatically expanded the modern marketer’s tool kit, in large part because of one simple but transformative development: digital data. With users regularly sharing personal data online and web cookies tracking every click, marketers have been able to gain unprecedented insight into consumers and serve up solutions tailored to their individual needs. The results have been impressive. Research has shown that digital targeting meaningfully improves the response to advertisements and that ad performance declines when marketers’ access to consumer data is reduced. But there is also evidence that using online “surveillance” to sell products can lead to a consumer backlash. The research supporting ad personalization has tended to study consumers who were largely unaware that their data dictated which ads they saw. Today such naïveté is increasingly rare. Public outcry over company data breaches and the use of targeting to spread fake news and inflame political partisanship have, understandably, put consumers on alert. And personal experiences with highly specific ads (such as one for pet food that begins, “As a dog owner, you might like…”) or ads that follow users across websites have made it clear that marketers often know exactly who is on the receiving end of their digital messages. Now regulators in some countries are starting to mandate that firms disclose how they gather and use consumers’ personal information.

This throws a whole new dynamic into the mix: How will targeted ads fare in the face of increased consumer awareness? On one hand, awareness could increase ad performance if it makes customers feel that the products they see are personally relevant. Supporters of cookies and other surveillance tools say that more-relevant advertising leads to a more valuable, enjoyable internet experience. On the other hand, awareness could decrease ad performance if it activates concerns about privacy and provokes consumer opposition.

The latter outcome seems more likely if marketers continue with a business-as-usual approach. One study revealed that when a law that required websites to inform visitors of covert tracking started to be enforced in the Netherlands, in 2013, advertisement click-through rates dropped. Controlled experiments have found similar results.

Some firms have done better than others in anticipating how customers will react to personalization. Amazon features shopping ads throughout its site, making product recommendations based explicitly—and often conspicuously—on individual users’ search data, without seeming to draw any consumer ire whatsoever. However, in a now-infamous example, when Target followed a similar practice by creating promotions that were based on individual shoppers’ consumption data, the response was not so benign. The retailer sent coupons for maternity-related products to women it inferred were pregnant. They included a teenager whose father was incensed—and then abashed to discover that his daughter was, in fact, expecting. When the New York Times reported the incident, many consumers were outraged, and the chain had a PR problem on its hands. Similarly, Urban Outfitters walked back the gender-based personalization of its home page after customers complained. “We saw customer frustration at being targeted outweigh any benefit,” Dmitri Siegel, the marketing executive in charge of the initiative, concluded in an interview with the Times.

For the consumer who prefers relevant ads over irrelevant ones (an ad-free experience is not realistic in today’s ad-supported web landscape), it’s important that marketers get the balance right. Digital marketers need to understand when the use of consumer data to personalize ads will be met with acceptance or annoyance so that they can honor consumers’ expectations about how their information should be used. The good news is that social scientists already know a lot about what triggers privacy concerns off-line, and new research that we and others have performed demonstrates that these norms can inform marketers’ actions in the digital sphere. Through a series of experiments, we have begun to understand what causes consumers to object to targeting and how marketers can use personalization while respecting people’s privacy.

The Privacy Paradox

People don’t always behave logically when it comes to privacy. For example, we often share intimate details with total strangers while we keep secrets from loved ones. Nevertheless, social scientists have identified several factors that predict whether people will be comfortable with the use of their personal information. One of these factors is fairly straightforward—the nature of the information. Common sense holds that the more intimate it is (data on sex, health, and finances is especially sensitive), the less comfortable people are with others knowing it.

A second, more nuanced factor involves the manner in which consumers’ personal information changes hands—what social scientists call “information flows.” One such norm is, to put it colloquially, “Don’t talk about people behind their backs.” While people may be comfortable disclosing personal information directly (what scientists call “first-person sharing”), they may become uneasy when that information is passed along without their knowledge (what we term “third-party sharing”). If you learned that a friend had revealed something personal about you to another, mutual friend, you’d probably be upset—even though you might have no problem with both parties knowing the information. It can also be taboo to openly infer information about someone, even if those inferences are accurate. For example, a woman may inform a close colleague of her early-term pregnancy, but she’d likely find it unacceptable if that coworker told her he thought she was pregnant before she’d disclosed anything.

In our recent studies we learned that those norms about information also apply in the digital space. In our first study, we collected a list of common ways in which Google and Facebook use consumers’ personal data to generate ads. We then asked consumers to rate how acceptable they found each method to be, and—employing a statistical technique called factor analysis—identified clusters of practices that consumers tended to dislike, which mirrored practices that made people uncomfortable off-line:

· Obtaining information outside the website on which an ad appears, which is akin to talking behind someone’s back

· Deducing information about someone from analytics, which is akin to inferring information.

Next, we wanted to see what effect adherence to—or violation of—privacy norms would have on ad performance. So we divided participants in our study into three groups. In a simulation of acceptable, first-person sharing, one group first browsed a website; on that same site we later displayed an ad accompanied by the disclosure “You are seeing this ad based on the products you clicked on while browsing our website.” In a simulation of unacceptable, third-party sharing, another group browsed a website and then visited a second site, where we displayed an ad accompanied by the disclosure “You are seeing this ad based on the products you clicked on while browsing a third-party website.” The final group served as a control; like the other groups, these participants engaged in a browsing task and were then shown a targeted ad, but without a message. In all groups, we measured interest in purchasing the advertised product as well as the likelihood that participants would visit the advertiser’s website. Additionally, to understand how these three ad scenarios affected consumers’ attitudes, we asked all participants which they valued more: the personalization of ads or the privacy of their data.

If people dislike the way their information is shared, purchase interest drops.

We found that when unacceptable, third-party sharing had occurred, concerns about privacy outweighed people’s appreciation for ad personalization. Those attitudes in turn predicted interest in purchasing, which was approximately 24% lower in the group exposed to unacceptable sharing than in both the first-party sharing and the control groups—a clear indication of backlash.

We then conducted a similar test using declared (acceptable) versus inferred (unacceptable) information. After completing an online shopper profile, one group saw an ad that was accompanied by the disclosure “You are seeing this ad based on information that you provided about yourself.” After filling out the same form, a second group of subjects saw an ad but were told, “You are seeing this ad based on information that we inferred about you.” A final control group saw the ad without any disclosure. The group that viewed the ad generated through inferences showed 17% less interest in purchasing than the other groups did—even though the ads were exactly the same across groups. In sum, these experiments offer evidence that when consumers realize that their personal information is flowing in ways they dislike, purchase interest declines.

Mitigating Backlash

But it’s not all bad news. Three factors can increase the upside of targeted ads for both marketers and consumers. Taking them into account will help marketers provide personalized ads that inform consumers of products they want and need but in a way that feels acceptable.

1. Trust.

A common practice that advertisers currently use to preempt targeting backlash is to offer voluntary ad transparency. Many now display an AdChoices icon, a blue symbol indicating that the accompanying ad has been tailored to the individual recipient’s characteristics. In some cases, consumers can click on the icon to find out why the ad has been displayed to them. In 2014, Facebook introduced a similar “Why am I seeing this ad?” feature on its site.

Such disclosure can be beneficial when targeting is performed in an acceptable manner—especially if the platform delivering the ad is otherwise trusted by its customers. In one experiment conducted with Facebook users, we first asked participants how much they trusted the social media company. Next, we directed them to find the first advertisement in their Facebook news feed and read its accompanying transparency message. We asked them to indicate whether the message conveyed that the ad had been generated using first- or third-party information and using declared or inferred information. Then we inquired about how interested they were in purchasing the advertised product and engaging with the advertiser in general (by, say, visiting its website or liking its Facebook page). Overall, ads from unacceptable flows performed worse than those from acceptable flows. However, trust enhanced consumers’ receptiveness: People who trusted Facebook and saw ads based on acceptable flows expressed the highest interest in purchasing the product and engaging with the advertiser.

We also found that when trust was high, disclosing acceptable flows actually boosted click-through rates. In a set of field experiments, we partnered with Maritz Motivation Solutions, which runs redemption websites for loyalty programs such as airline frequent-flier programs, a context in which consumer trust tends to be high. These sites use the same technology as the large e-commerce sites, except that the currency is points instead of money. In one experiment, when we revealed first-party sharing by telling shoppers that an advertisement was based on their activity on the site, click-through rates increased by 11%, the time spent viewing the advertised product rose by 34%, and revenue from the product grew by 38%.

2. Control.

Central to many privacy concerns is the loss of control. Consumers may not object to information being used in a particular context, but they worry about their inability to dictate who else might get access to it and how it will be used down the line.

In a novel experiment, MIT’s Catherine Tucker partnered with a nonprofit that advertised on Facebook. The nonprofit targeted 1.2 million Facebook users with calls to action such as “Help girls in East Africa change their lives through education.” For half those users, the ad was also personalized, openly invoking an attribute that a user had revealed on Facebook. For example, an ad might read, “As a fan of Beyoncé, you know that strong women matter,” if a user had liked the popular singer on Facebook. Midway through this experiment, Facebook instated new privacy features that gave users more control over their personal information (without changing the attributes that advertisers could use to target people). The social media platform allowed people to keep their connections private and to manage their privacy settings more easily. Before this policy change, the personalized ads did not perform particularly well; if anything, users were slightly less likely to click on them than on generic ads. After the change, however, the personalized ads were almost twice as effective as the generic ones. In other words, when consumers are given greater say over what happens with the information they’ve consciously shared, transparently incorporating it can actually increase ad performance.

With personalized ads, there’s a fine line between creepy and delightful.

In another experiment we showed participants a targeted advertisement, systematically varying the disclosures appearing alongside it. With one group of participants, the ad was accompanied by a message saying that (unacceptable) third-party information had been used to generate it. A second group of participants saw the same transparency message—plus a prompt reminding them that they could set their ad preferences. A third group simply saw the ad. Purchase interest was lower in the first group than in the last group. However, in the second group—consumers who were reminded that they could dictate their ad preferences—purchase interest was just as high as in the group that had seen no message. In other words, reminding consumers that they can meaningfully control their privacy settings buffered any backlash to unacceptable data collection. However, there was also a fourth group in this experiment—whose reactions unfortunately highlight the potential for consumers to be misled. This group’s members also received the ad transparency message and a prompt about managing their information. This time, however, participants were merely reminded that they could choose their profile picture. Purchase interest in this group, too, was just as high as in the group that had seen no message.

Control over personal data is becoming increasingly important in today’s online world, where protracted, multilayered data collection is now common. For instance, data brokers aggregate all kinds of personal information—from platforms like Facebook as well as internet shopping sites, store loyalty programs, and even credit card companies. Therefore, as targeted advertising becomes more sophisticated and specific—and consumers’ awareness of the ways in which their privacy may be compromised grows—offering people meaningful control over their information will likely improve ad performance.

3. Justification.

Revealing why personal data has been used to generate ads can help consumers realize the upside of targeted ads. In one experiment by Tiffany Barnett White of the University of Illinois and her colleagues, a personalized ad by a movie rental company that invoked users’ physical locations backfired, but its performance improved when the copy explained why the physical location was important: The consumer was eligible for a service not available in all places. A commitment to provide justification can also foster appropriate use of data. If you have difficulty coming up with a good reason for the way you use consumers’ data, it should give you pause.

Guidelines for Digital Marketers

When it comes to ad personalization, there’s a fine line between creepy and delightful, so it could be tempting to conclude that the safest approach is to keep people in the dark—to obscure the fact that personal information is being used to target consumers, especially when advertising products of a more sensitive nature. Indeed, that’s what Target reportedly tried after its pregnancy promotion scandal: It started arbitrarily inserting coupons for random items in its mailings to expecting mothers, so the baby-products ads would look incidental and less conspicuous. It might also be tempting to manipulate consumers by giving them meaningless opportunities to feel in control that create a false sense of empowerment.

While such tactics may work in the short term, we believe they are ultimately misguided. Even setting aside the potential ethical issues, deceit erodes trust if it is discovered. And as our experiments show, trust enhances the positive effects of using personal information in ways consumers deem acceptable. Research into other areas also suggests that trust has spillover benefits. For example, with Bhavya Mohan and Ryan Buell, one of us (Leslie) has done research on pricing—another area where concealment and manipulation can boost profits in the short term—showing that when firms are transparent about the variable costs involved in producing a good, their consumers’ trust grows and sales rise. Finally, it’s doubtful that concealment will remain a viable tactic; consumers are becoming savvier, and regulators are pressuring companies to reveal their data-collection practices. An off-line analogue may be useful here as a guide: You might gain temporary advantage by deceiving a friend, but the damage if the deception is discovered is deep and lasting. Relationships are stronger if they are honest.

So what suggestions would we make to digital marketers looking to maximize the potential of ad targeting? We offer five:

1. Stay away from sensitive information.

In particular, try to avoid using anything about health conditions, sexual orientation, and so on. Google, for example, doesn’t allow advertisers to target on the basis of sexual interests or “personal hardships.” Similarly, Facebook recently updated its policies, preventing advertisers from basing their targeting on personal attributes such as race, sexual orientation, and medical conditions. This move presents challenges to companies that sell sensitive goods—which may want to avoid targeting altogether. Rather, such firms should consider finding their customers in ways that don’t involve using personal data—by advertising on websites those customers are likely to visit, for example.

2. Commit to at least a minimum amount of transparency.

There is a wide spectrum between concealment and full disclosure, with many acceptable points between the two. As a general rule of thumb, we suggest that marketers at least be willing to provide information about data-use practices upon request. Such disclosures should be clear and easily accessible. This is one of the purposes of the AdChoices icon; interested consumers can click on it to learn why they are seeing an ad (or to opt out of targeted advertising), but the icon isn’t disruptive to consumers who are less privacy-sensitive. Simply having it on a website can be beneficial and in and of itself can foster trust. However, if a transparency initiative fails to deliver on its promise—by, for example, offering confusing or opaque explanations for why an ad is being shown—its value to the consumer will erode. A genuine commitment to disclosure may also serve as a kind of organizational prophylactic against abuse, by ensuring that employees understand that data practices must always be customer-centric and ethical. As the saying goes, sunlight is the best disinfectant.

3. Use data judiciously.

Data collection opens up all sorts of innovative and clever insights into customers, but again we counsel restraint. Consumers react poorly when personal information is used to generate a recommendation or an advertisement that feels intrusive or inappropriate. Conversely, they will give advertisers more leeway if they are delighted by recommendations. For example, Stitch Fix, the subscription-service clothing retailer, knows a lot about its customers, including information people typically prefer to keep private, such as their weight and bra size. But this information is extremely useful to the site’s service of curating a package of clothing pieces that suit the customer, delivered to her doorstep. Because Stitch Fix’s use of personal information is appropriate and helpful, it doesn’t feel invasive.

Consumers may even be willing to forgive unacceptable data collection if they benefit from it in a compelling way. For example, the dating app Tinder tells a user how many Facebook friends he has in common with a given prospect, making it clear that third-party sharing is occurring, which would usually result in a backlash. However, in this case the sharing is clearly valued by users, so they seem to accept the practice.

4. Justify your data collection.

We also suggest that marketers explain why they are collecting personal information—and how it will generate more appropriate and useful ads. This is especially true when it might not be obvious to consumers why a given piece of information is necessary. LinkedIn justifies its data usage policy as follows: “We use the data that we have about you to provide, support, personalize and make our services (including ads) more relevant and useful to you and others.” Such disclosures can also act as a mission statement of sorts for employees—again helping to prevent abuse.

5. Try traditional data collection first.

Marketers should not forget that they can (and should) still gather information from customers the old-fashioned way—without digital surveillance. While Stitch Fix draws a great deal of inferences about consumers’ preferences from their online behavior, it also makes extensive use of surveys in which consumers can reveal at will their tastes and physical attributes. Other firms that rely heavily on making accurate recommendations to customers—such as Amazon and Netflix—also give consumers an opportunity to directly state their preferences. Supplementing less-transparent ways of using consumers’ information with more-open ones can decrease feelings of invasiveness. More important, it can also provide a richer picture of the customer, facilitating even better recommendations. Of course, gathering data directly from consumers is costly and may sometimes be impractical (for one, response rates to consumer surveys are notoriously low). But if they have to resort to third-party information, marketers can give consumers meaningful control over how it will be used. For example, both Google and Facebook let users have considerable say about the ways they can be targeted.

CONCLUSION

There’s still a lot we don’t know about how people respond to online data collection and ad targeting, and norms around privacy may change over time as young digital natives become consumers and technology further penetrates our lives. For the time being, applying norms from the off-line world can help companies predict what practices consumers will accept. In the end, all ad targeting should be customer-centric—in the service of creating value for consumers.

A version of this article appeared in the January–February 2018 issue (pp.62–69) of Harvard Business Review.

Leslie K. John is an associate professor of business administration at Harvard Business School. Twitter: @lesliekjohn.

Tami Kim is an assistant professor of marketing at Darden School of Business at the University of Virginia.

Kate Barasz is an assistant professor of marketing at IESE Business School in Barcelona.

ARTICLE 2

Surveillance Capitalism, Social Media, and Personal Data Extraction

Nov. 12, 2021

Top of Form

Bottom of Form

By Shoshana Zuboff

Dr. Zuboff is a professor emeritus at Harvard Business School and the author of “The Age of Surveillance Capitalism.”

Facebook is not just any corporation. It reached  trillion-dollar status  in a single decade by applying the logic of what I call surveillance capitalism — an economic system built on the secret extraction and manipulation of human data — to its vision of connecting the entire world. Facebook and other leading surveillance capitalist corporations now control information flows and communication infrastructures across the world.

These infrastructures are critical to the possibility of a democratic society, yet our democracies have allowed these companies to own, operate and mediate our information spaces unconstrained by public law. The result has been a hidden revolution in how information is produced, circulated and acted upon. A parade of  revelations since 2016 , amplified by the whistle-blower  Frances Haugen ’s documentation and personal testimony, bears witness to the consequences of this revolution.

The world’s liberal democracies now confront a tragedy of the “un-commons.” Information spaces that people assume to be public are strictly ruled by private commercial interests for maximum profit. The internet as a self-regulating market has been revealed as a failed experiment. Surveillance capitalism leaves a trail of social wreckage in its wake: the wholesale destruction of privacy, the intensification of social inequality, the poisoning of social discourse with defactualized information, the demolition of social norms and the weakening of democratic institutions.

These social harms are not random. They are tightly coupled effects of evolving economic operations. Each harm paves the way for the next and is dependent on what went before.

There is no way to escape the machine systems that surveil us, whether we are shopping, driving or walking in the park. All roads to economic and social participation now lead through surveillance capitalism’s profit-maximizing institutional terrain, a condition that has intensified during nearly two years of global plague.

Will Facebook’s digital violence finally trigger our commitment to take back the “un-commons”? Will we confront the fundamental but long ignored questions of an information civilization: How should we organize and govern the information and communication spaces of the digital century in ways that sustain and advance democratic values and principles?

Search and Seizure

Facebook as we now know it was fashioned from Google’s rib. Mark Zuckerberg’s start-up did not invent surveillance capitalism. Google did that. In 2000, when  only 25 percent of the world’s information was stored digitally , Google was a tiny start-up with a great search product but little revenue.

By 2001, in the teeth of the dot-com bust, Google’s leaders found their breakthrough in a series of inventions that would transform advertising. Their team learned how to combine massive data flows of personal information with advanced computational analyses to predict where an ad should be placed for maximum “click through.” Predictions were computed initially by analyzing data trails that users unknowingly left behind in the company’s servers as they searched and browsed Google’s pages. Google’s scientists learned how to extract predictive metadata from this “data exhaust” and use it to analyze likely patterns of future behavior.

Prediction was the first imperative that determined the second imperative: extraction. Lucrative predictions required flows of human data at unimaginable scale. Users did not suspect that their data was secretly hunted and captured from every corner of the internet and, later, from apps, smartphones, devices, cameras and sensors. User ignorance was understood as crucial to success. Each new product was a means to more “engagement,” a euphemism used to conceal illicit extraction operations.

When asked “What is Google?” the co-founder Larry Page laid it out in 2001, according to a detailed account by Douglas Edwards, Google’s first brand manager, in his book “I’m Feeling Lucky”: “Storage is cheap. Cameras are cheap. People will generate enormous amounts of data,” Mr. Page said. “Everything you’ve ever heard or seen or experienced will become searchable. Your whole life will be searchable.”

Instead of selling search to users, Google survived by turning its search engine into a sophisticated surveillance medium for seizing human data. Company executives worked to keep these economic operations secret, hidden from users, lawmakers, and competitors. Mr. Page opposed anything that might “stir the privacy pot and endanger our ability to gather data,” Mr. Edwards wrote.

Massive-scale extraction operations were the keystone to the new economic edifice and superseded other considerations, beginning with the quality of information, because in the logic of surveillance capitalism, information integrity is not correlated with revenue.

This is the economic context in which disinformation wins. As recently as 2017, Eric  Schmidt, the executive chairman of Google’s parent company, Alphabet, acknowledged  the role of Google’s algorithmic ranking operations in spreading corrupt information. “ There is a line  that we can’t really get across,” he said. “It is very difficult for us to understand truth.” A company with a mission to organize and make accessible all the world’s information using the most sophisticated machine systems cannot discern corrupt information.

Facebook, the First Follower

Mr. Zuckerberg began his entrepreneurial career in 2003 while a student at Harvard. His website, Facemash, invited visitors to rate other students’ attractiveness. It quickly drew outrage from his peers and was shuttered. Then came TheFacebook in 2004 and Facebook  in 2005 , when Zuckerberg acquired his first professional investors.

Facebook’s user numbers quickly grew; its revenues did not. Like Google a few years earlier, Mr. Zuckerberg could not turn popularity into profit. Instead,  he careened  from blunder to blunder. His crude violations of users’ privacy expectations provoked intense  public backlash , petitions and class-action suits. Mr. Zuckerberg seemed to understand that the answer to his problems involved human data extraction without consent for the sake of advertisers’ advantage, but the complexities of the new logic eluded him.

He turned to Google for answers.

In March 2008, Mr. Zuckerberg hired Google’s head of global online advertising,  Sheryl Sandberg , as his second in command. Ms. Sandberg had joined Google in 2001 and was a key player in the surveillance capitalism revolution.  She led the build-out  of Google’s advertising engine, AdWords, and its AdSense program, which together accounted for most of the company’s $16.6 billion in revenue in 2007.

A Google multimillionaire by the time she met Mr. Zuckerberg, Ms. Sandberg had a canny appreciation of Facebook’s immense opportunities for extraction of rich predictive data. “We have better information than anyone else. We know gender, age, location, and it’s real data as opposed to the stuff other people infer,” Ms. Sandberg explained, according to David Kirkpatrick in “The Facebook Effect.”

The company had “better data” and “real data” because it had a front-row seat to what Mr. Page had called “your whole life.”

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Facebook paved the way for surveillance economics with new privacy policies in late 2009. The  Electronic Frontier Foundation  warned that new “Everyone” settings eliminated options to restrict the visibility of personal data, instead treating it as publicly available information.

TechCrunch  summarized the corporation’s strategy: “Facebook is forcing users to choose their new privacy options to promote the ‘Everyone’ update, and to clear itself of any potential wrongdoing going forward. If there is significant backlash against the social network, it can claim that users willingly made the choice to share their information with everyone.”

Weeks later, Mr. Zuckerberg  defended  these moves to a TechCrunch interviewer. “A lot of companies would be trapped by the conventions and their legacies,” he boasted. “We decided that these would be the social norms now, and we just went for it.”

Mr. Zuckerberg “just went for it” because there were no laws to stop him from joining Google in the wholesale destruction of privacy. If lawmakers wanted to sanction him as a ruthless profit-maximizer willing to use his social network against society, then 2009 to 2010 would have been a good opportunity.

A Sweeping Economic Order

Facebook was the first follower, but not the last. Google, Facebook, Amazon, Microsoft and Apple are private surveillance empires, each with distinct business models. Google and Facebook are data companies and surveillance-capitalist pure plays. The others have varied lines of business that may include data, services, software and physical products. In 2021 these five U.S. tech giants represent five of the six  largest publicly traded companies  by market capitalization in the world.

As we move into the third decade of the 21st century, surveillance capitalism is the dominant economic institution of our time. In the absence of countervailing law, this system successfully mediates nearly every aspect of human engagement with digital information. The promise of the surveillance dividend now draws surveillance economics into the “normal” economy, from insurance, retail, banking and finance to agriculture, automobiles, education, health care and more. Today all apps and software, no matter how benign they appear, are designed to maximize data collection.

Historically, great concentrations of corporate power were associated with economic harms. But when human data are the raw material and predictions of human behavior are the product, then the harms are social rather than economic. The difficulty is that these novel harms are typically understood as separate, even unrelated, problems, which makes them impossible to solve. Instead, each new stage of harm creates the conditions for the next stage.

All of it begins with extraction. An economic order founded on the secret massive-scale extraction of human data assumes the destruction of privacy as a nonnegotiable condition of its business operations. With privacy out of the way, ill-gotten human data are concentrated within private corporations, where they are claimed as corporate assets to be deployed at will.

The social effect is a new form of inequality, reflected in the colossal asymmetry between what these companies know about us and what we know about them. The sheer size of this knowledge gap is conveyed in a leaked  2018 Facebook document , which described its artificial intelligence hub, ingesting trillions of behavioral data points every day and producing six million behavioral predictions each second.

Next, these human data are weaponized as targeting algorithms, engineered to maximize extraction and aimed back at their unsuspecting human sources to increase engagement. Targeting mechanisms change real life, sometimes with grave consequences. For example,  the Facebook Files  depict Mr. Zuckerberg using his algorithms to reinforce or disrupt the behavior of billions of people. Anger is rewarded or ignored. News stories become more trustworthy or unhinged. Publishers prosper or wither. Political discourse turns uglier or more moderate. People live or die.

Occasionally the fog clears to reveal the ultimate harm: the growing power of tech giants willing to use their control over critical information infrastructure to compete with democratically elected lawmakers for societal dominance. Early in the pandemic, for example, Apple and Google  refused to adapt  their operating systems to host contact-tracing apps developed by public health authorities and supported by elected officials. In February,  Facebook shut down  many of its pages in Australia as  a signal of refusal  to negotiate with the Australian Parliament over fees for news content.

That’s why, when it comes to the triumph of surveillance capitalism’s revolution, it is the lawmakers of every liberal democracy, especially in the United States, who bear the greatest burden of responsibility. They allowed private capital to rule our information spaces during two decades of spectacular growth, with no laws to stop it.

Fifty years ago the conservative economist Milton  Friedman exhorted  American executives, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” Even this radical doctrine did not reckon with the possibility of no rules.

Democracy’s Counterrevolution

Democratic societies rived by economic inequality, climate crisis, social exclusion, racism, public health emergency and weakened institutions have a long climb toward healing. We can’t fix all our problems at once, but we won’t fix any of them, ever, unless we reclaim the sanctity of information integrity and trustworthy communications. The abdication of our information and communication spaces to surveillance capitalism has become the meta-crisis of every republic, because it obstructs solutions to all other crises.

Neither Google, nor Facebook, nor any other corporate actor in this new economic order set out to destroy society, any more than the fossil fuel industry set out to destroy the earth. But like global warming, the tech giants and their fellow travelers have been willing to treat their destructive effects on people and society as collateral damage — the unfortunate but unavoidable byproduct of perfectly legal economic operations that have produced some of the wealthiest and most powerful corporations in the history of capitalism.

Where does that leave us? Democracy is the only countervailing institutional order with the legitimate authority and power to change our course. If the ideal of human self-governance is to survive the digital century, then all solutions point to one solution: a democratic counterrevolution. But instead of the usual laundry lists of remedies, lawmakers need to proceed with a clear grasp of the adversary: a single hierarchy of economic causes and their social harms.

We can’t rid ourselves of later-stage social harms unless we outlaw their foundational economic causes. This means we move beyond the current focus on downstream issues such as content moderation and policing illegal content. Such “remedies” only treat the symptoms without challenging the illegitimacy of the human data extraction that funds private control over society’s information spaces. Similarly, structural solutions like “breaking up” the tech giants may be valuable in some cases, but they will not affect the underlying economic operations of surveillance capitalism.

Instead, discussions about regulating big tech should focus on the bedrock of surveillance economics: the secret extraction of human data from realms of life once called “private.” Remedies that focus on regulating extraction are content neutral. They do not threaten freedom of expression. Instead, they liberate social discourse and information flows from the “artificial selection” of profit-maximizing commercial operations that favor information corruption over integrity. They restore the sanctity of social communications and individual expression.

No secret extraction means no illegitimate concentrations of knowledge about people. No concentrations of knowledge means no targeting algorithms. No targeting means that corporations can no longer control and curate information flows and social speech or shape human behavior to favor their interests. Regulating extraction would eliminate the surveillance dividend and with it the financial incentives for surveillance.

While liberal democracies have begun to engage with the challenges of regulating today’s privately owned information spaces, the sober truth is that we need lawmakers ready to engage in a once-a-century exploration of far more basic questions: How should we structure and govern information, connection and communication in a democratic digital century? What new charters of rights, legislative frameworks and institutions are required to ensure that data collection and use serve the genuine needs of individuals and society? What measures will protect citizens from unaccountable power over information, whether it is wielded by private companies or governments?

Liberal democracies should take the lead because they have the power and legitimacy to do so. But they should know that their allies and collaborators include the people of every society struggling against a dystopian future.

The corporation that is Facebook may change its name or its leaders, but it will not voluntarily change its economics.

Will the call to “regulate Facebook” dissuade lawmakers from a deeper reckoning? Or will it prompt a heightened sense of urgency? Will we finally reject the old answers and free ourselves to ask the new questions, beginning with this: What must be done to ensure that democracy survives surveillance capitalism?

Shoshana Zuboff is the author of “The Age of Surveillance Capitalism” and a professor emeritus at Harvard Business School.

QUIZ 3 QUESTIONS:

1. What do the authors of the first article have to say about personal privacy when it comes to targeted digital advertising? What two things do consumers dislike the most?

2. What steps do the authors of the first article recommend that digital advertisers take to avoid consumer backlash from invasion of privacy concerns?

3. Read the second article called “Surveillance Capitalism and Social Media.” What are the author’s main views about surveillance capitalism ? Do you agree or disagree with her? Why?