Monetising Customer Data Without Their Knowledge Is Unethical and Must Stop By Sridhar Iyengar, MD, Zoho Europe

By Sridhar Iyengar, MD, Zoho Europe

Large tech corporations have started turning into surveillance companies, tracking the behaviour of businesses and users who have become heavily reliant on their services and platforms. Through advertising-first business models, Big Tech is increasingly putting user and business data at risk. The more tech companies know about their users, the more they can direct them to goods and services that they are most likely to buy and in turn create more competition in the market.

Bespoke capitalism is what has turned some of the world’s best known tech giants into the wealthiest companies in the world. This motivation for profit has pushed Big Tech to compete in data collection on a large scale. The better the data, the higher the profits.

Adjunct Surveillance

Adjunct surveillance is when a company monitors user behaviour through another business tool. For example, when using some email services, activities are being tracked across the internet the entire time the user is signed in. Other business tools might have a tracker or cookie embedded on webpages or in product, meaning that the app can still track activities, even if the user is not logged in.

B2C practices surrounding customer data are leaking into the B2B world at an alarming rate. Companies such as social networks and search engines are now regularly being used by many businesses, without thought around what the true pay-off is. For example, if using a third party to measure web analytics, companies can expose their customer data through trackers to that third party, who then use it for commercial gain. Customers are not made aware of this.

This is dishonest and corrupt behaviour. How far will boundaries continue to be pushed in concealing this from customers?  We urge SaaS companies to not just focus on their own policy and practices but ensure they can keep their customer data privacy promises through taking note of the practices of any third party applications used on their web properties and ensuring compliance with their policy. Moreover, as per data privacy laws all customer information exposed to any third party has to be done only with the consent of the customer.

Online advertising and privacy do not mix, and some businesses may not truly understand the problems that occur when using third party applications with trackers on their own properties, and these organisations must be educated.

What can be done?

When we created Zoho we wanted to deliver what was best for our customers, not just in terms of functionality but also ensuring that their privacy is always kept safe and secure. In 2019 we removed all tracking software from third parties on our websites and applications and closed loopholes to achieve enhanced privacy for our customers. Other businesses, however, are still exploiting these aspects to generate revenue from third-party ad trackers.

We urge every business to audit their models carefully and ask the following questions:

1. How much customer data do you need in order to serve your customers better without compromising their privacy?
2. How much customer data is exposed to other third parties through your business operations, and is any potential financial gain worth risking the compromise of customer privacy? How transparent are you to your customers on this – has the data been collected with customer consent?
3. What is morally correct in your treatment of customer data, rather than what provides the most immediate commercial gain?
4. What new steps can you take to ensure customer data privacy?

The Problem with Big Tech

The other way that information is being mishandled, involves direct partnerships between technology companies and software vendors.

Most software vendors monitor customers, users, and prospective customers through cookies, or ‘trackers’ placed using simple embedded code. Software companies pay a large fee for advertising online and want to know metrics about whether that investment is translating to increased traffic and revenue. These companies rely on free services such as analytics or tag management or usage stats provided by Big Tech companies and in turn pay by exposing user data. Unrecognised by users, SaaS vendors will run trackers to watch user behaviour, check their click-through rates, and then share that information with third-party ‘surveillance’ companies.

Consumers tend to gravitate towards to Big Tech surveillance companies because their services are offered for free — knowing on some level that they are actually paying with their data. Businesses, however, use these and other surveillance companies’ services because they are mostly free and require minimal work, usually just embed a little code. In this case, businesses are paying with user data often without notifying said user. Both consumers and businesses are putting themselves at risk because the services they or their companies prefer are available for free, or because they are easy to implement, shortening go-to-market time.

How to combat the problem?

The safest strategy businesses can implement concerning software to use is carefully research before continuing to operate. Larger companies may decide to build certain tools that help to ensure that employee data stays safe, but the cost and sophistication of this can be prohibitive for small and midsize companies. Not surprisingly, this option is the least common model of the three.

If today’s businesses do not act on privacy settings soon, they may face many potential risks, such as losing key employees or damaging their company’s reputation. On the flip side, educating employees in good faith has several benefits for business owners, such as attracting talent and building trust with their workforce.

There is great appeal in working for a company that is open and honest about how data and privacy may be affected when on company time, but employers and employees must work together to fight against surveillance and technology that compromises data security and privacy.

The future of Adjunct Surveillance

One solution to this privacy security problem would be for businesses to detach themselves from these companies. In the future, business decision makers will be faced with a choice: to chance their model or continue to be involved with Big Tech’s spying and data collection. Regulation may be what is needed to check on the data being used by Big Tech.

About the Author

Sridhar Iyengar, Managing Director, Zoho Europe. Sridhar heads the European Operations for Zoho Corporation. He has spent over 2 decades building B2B software and has played leadership roles in Product Management, Business Development, Marketing and Engineering. He is no stranger to public forums on topics ranging from building a strong product culture to how technology is changing the world. Being part of the Zoho team since its inception, he has thoroughly enjoyed the journey from a bootstrapped start-up to a global software product company. Follow him @isridhar

Sridhar Iyengar can be reached on twitter at https://twitter.com/iSridhar?s=20 and the company website is https://www.zoho.com/