Privacy concerns under Surveillance Capitalism

Zuboff’s argument is based on Hal Varian’s (2010, 2014) four uses of computer-mediated transactions:

1. Data extraction and analysis

2. New contractual forms due to better monitoring 3. Personalization and customization

4. Continuous experiments

First, as illustrated by the technological paradigms in insurance, information technology has the capacity to automate and informate. This is now institutionalized in millions of new actions within firms every single day. A lot of the data generated in the data paradigm, are purchased, aggregated, analyzed, packaged, and sold by data brokers who operate, in the US at least, in secrecy, outside of statutory consumer protections and without consumers’

knowledge, consent, or rights of privacy and due process (U.S. Commitee on Commerce, Science, and Transportation, 2013). Until now, this thesis has assumed that insurance companies are granted consent in each case to use personal health data in underwriting.

However, today it is common with “click through” agreements (Porter & Heppelmann, 2014), which gives broad consent to collect product data the first time a wearable or IoT product is being used. This procedure essentially allows companies to universally collect product data and use it with few constraints.

Revenue in this paradigm depends upon data assests appropriated through pervasive automated operations. Zuboff (2016) is criticizing these surveillance assets for not producing appropriate reciprocities. I would argue that the real problem is that surveillance capitalists have exploited a lag in social evolution since the constant development of their abilities to aggregate date for profit outrun public understanding and the development of law and regulation. The average consumer does not fully understand the implications this data accumulation has for privacy rights and often they will see it as essential for basic social participation.

Second, as illustrated by the introduction of individual risk assessment and IoT, insurance companies now have the ability to observe behavior that was previously unobservable and write contracts on it. This will inevitably remove uncertainty, which is an important aspect of a contract. Dynamic and individual risk assessment will eliminate the need for trust, and the ability to develop it. Zuboff argues that contracts are “lifted from the social and reimagined as machine process” (2016, p. 81). By automatically adjusting your insurance premium based on your lifestyle actions, surveillance capitalism establishes a new form of power where contract and the rule of law are replaced by the rewards and punishments of a new kind of invisible hand. According to Varian (2014), consumers will agree to invasion of privacy if they get something they want in return. This is not completely true yet. Recall the study by Pickard and Swan (2014), only 14% of consumers were willing to share health and medical

information with insurance companies. It could be argued that the reciprocities are simply not valued enough for people to be swayed, but an important question is also whether these supposed reciprocities are the product of genuine consent. Zuboff (2015) argues that surveillance does not erode privacy but rather redistributes them. Instead of many people having some privacy rights, these rights are now concentrated within the surveillance regime.

Following this line of thought, surveillance capitalism can be thought to replace contracts, the rule of law, and social trust, with the sovereignty of ubiquitous companies. The response from consumers in the data paradigm should be to demand improved contractual frameworks governing their privacy rights.

Third, there is a desire to personalize and customize the services offered to users of digital platforms. This is very much the case with insurance, as explained throughout the analysis of the data paradigm. The problem is that the typical user has little or no knowledge of the business operations of these digital companies, the full range of personal data they contribute to their servers, the retention of those data, or how those data are processed and monetized (Zuboff, 2016). Surveillance capitalism thrives on public ignorance. This trend is disturbing since consumers have few meaningful options for privacy self-management (Solove, 2013).

Another issue with personalization is to be found in the business model of insurance companies. The data paradigm will make it easier for life and health insurance companies to cream skim due to the accumulation of personal data. To some extent, this can be addressed through a regulatory response by guaranteeing access to life and health insurance coverage, automatic renewal of contracts and limiting exclusions for pre-existing conditions. However, in the long run, the model of risk pooling, which is essential to insurance, could be dramatically changed by big data analytics.

Consumers does show some pushback in a survey by the Financial Times, which found that both EU and US citizens are altering their online behavior as they seek more privacy (Kwong, 2014). The concern is that ‘lack of knowledge’ rather than ‘careless attitude towards privacy’

is an important reason why many consumers engage with digital companies in an unconcerned manner.

Finally, big data analytics have the potential to intervene with and modify behavior for profit.

This is why Vitality provides new customers with an activity tracker, discounts on fitness gear and rewards for healthier lifestyles. From the analogue to the data paradigm, reality itself has undergone a metamorphosis: “Now, reality is subjugated to commodification and monetization

and reborn as ‘behavior’” (Zuboff, 2015, p. 85). Data about the behaviors of bodies, health and things are produced in a universal real-time dynamic index of IoTs. This gives all digital companies the possibility to alter the behaviors of people and things for profit and control.

According to Zuboff’s understanding of surveillance capitalism, there are no individuals, only the global organism and all the tiniest elements, people, within it. All consumers with the material, knowledge and financial resources to access the Internet participate in this new genus of capitalism, where people are nothing but targets of data extraction. The game is selling access to the real-time data of your daily life, your reality, in order to influence and modify your behavior for profit.