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User beware

More regulations, savvier consumers of goods and truth may be needed to counter the technology, suggests UW expert


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Revelations this month of a data firm, Cambridge Analytica, using the massive amounts of data collected by Facebook on its users to help swing the 2016 U.S. election was just the latest example of a dubious and invasive industry forming around influencing people with their private information.

Take the data collected from the some 2.2 billion active users of the social media website, or the search histories of an entire population, and companies can tailor their messages specifically for their market like never before. The ubiquity of that data, and the ease with which it is available – after all, users are the ones providing that information for free – has changed the way businesses and other organizations affect their market, says an expert in consumer economics.

Robert Kerton

“If you look at the way technology has changed over the last say 40 years, then two things have happened. It’s got blessings, I don’t want to deny that, but it’s made deception far more effective and proficient,” said Robert Kerton,  professor emeritus in the economics department of the University of Waterloo.

“And at the same time the second thing that’s happened. The cost of collecting a vast number of personal details has plummeted. So you’ve got the cost of collecting all these details going down really quickly, and at the same time the effectiveness of presenting fake information has gone up.”

Together, the two factors can be quite a volatile mix. Marketers are not only able to deliver their messages more easily to their intended audience, they can also determine the exact susceptibilities of their consumers as well. They can find out, based on their audiences’ Internet usage, which people will be more ready to “buy” their product, which can be anything from a specific brand of deodorant to a fake news story or out of context information.

“Big returns can be made by ethical marketers who detect an opportunity in our private details then offer us a product or service with selected information on why their product or service is a solution for needs they identify in our behavior,” said Kerton.

“Our personal details are also valuable to less ethical agents who are very well paid for learning what each individual really cares about, so selected information – or fake news, whatever works – can condition us to the solution being peddled.”

It’s analogous to common price discrimination tactics sellers will employ, explains Kerton. When a consumer walks into a store with little knowledge on what they’re purchasing, they’re more likely to pay more for a product than someone who has searched for alternatives.

In the same way, by looking at your Internet behaviour, data analysts can determine which users fact-check what they read, says Kerton. That can be through credible resources like the fact-checking agency Snopes, Consumer Reports or the American Satisfaction Index. In economics terms, consumers that do fact-check (or price-check, as the case may be) are considered “efficient searchers,” while those that don’t, or can’t easily, are “high-cost searchers.”

“So if Big Data finds you’re that type of person (an efficient searcher), they know you’re harder to deceive. So they might just set you aside, [and say], ‘let’s go work on the people who are not checking,’” he said.

Ideally, purveyors of fake news are interested in the high-cost searchers.

“You want to collect a huge number of people who don’t search, or who don’t do it well. Those are your vulnerable targets,” added Kerton.

Vigilance on the part of consumers on the internet and on social media, whether that’s through more rigorous fact-checking or by controlling what is being posted, is part of the solution. But he also believes that better consumer protection laws are needed. To that end, Kerton is a principal investigator on a collaborative research project with six universities and four major consumer protection groups to come up with better government policies.

“What we want is evidence-based research into policy,” he explained. “So I’m trying to help. And right now, you’ve got this big challenge where technology has sort of twisted things around a lot, and there may be more urgent need than usual. My feeling is that the people running Facebook and so on have something called a first mover advantage. They’ve already moved and public policy is trying to respond.”

In the case of Cambridge Analytica, the organization was said to have used the data collected on more than 50 million Facebook users, mostly registered voters in the U.S., to target them with ads according to their psychological profile. The data firm, which worked on the 2016 campaign of U.S. President Donald Trump, is being accused of improperly using the Facebook information.

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