The magical trip your data takes
The data brokerage industry is far more complex and sweeping than meets the eye. Even back in 2012, The Wall Street Journal's "What They Know" series revealed the extent in staggering terms. In one experiment, a test computer visited the top 50 websites by user traffic. The researchers discovered that their computer was left with 2,224 cookies, installed by more than 131 companies specifically in the business of creating rich consumer-profiling databases.
To say that the public doesn't know what's happening is probably incorrect. People are aware of how the commercial infrastructure of the Internet works but either reluctantly brush it off or feel powerless to do anything about it. Advertisers, employers, bankers, police departments, insurers, credit agencies, schools and hospitals are just some of the many customers of data brokers. And as with any other commercial transaction, these brokers meet the needs of their customers by diversifying the types of products available.
From employers who buy personal data to check on a potential candidate to police departments that profile residents, the sale of data doesn't just lead to online advertising, it also affects how other social institutions operate. Or take, for example, algorithms used for more effective voter outreach - by analyzing our preferences, deepest wishes, and deepest fears.
Let's compare our personal data to an agricultural crop. Imagine that on your farm you grow a special crop. All the labor and resources you put into the land returns to you a useful commodity that you can either consume yourself or exchange for something else of value.
Data brokers are digital farmers, except that they just collect the crops of others without owning a farm, and their labor and resources come exclusively from offering free Internet-based services or contracting with companies that do.
We need to view data brokers as rent-seekers: owners of a capital resource that generate gains merely from the sake of owning the resource. In the case of the Internet, this resource is the creativity of the collective commons, that decentralized information-sharing and generating network that now stretches across the planet. So let's follow the story of the crop that went to the market and then sailed across the world. Here is the magical trip your data takes.
Data begins with those who create it. Online shopping, news, and social media create rich opportunities for data creation. The labor we input every day - for example, our creativity, knowledge, human interaction, communication - into navigating the digital world are the seeds; the non-stop flurry of images, AI-tailored online content, ad offerings, and TV shows are the water.
Put them together with the soil of the interconnected devices and physical and digital infrastructure of the Internet and data begins to blossom. The data at this point has an exchange value but lacks a direct use-value. But first, it must be harvested. This happens through a wide range of digital tools that have evolved with the Internet itself. Some of these tools, such as rewards programs, are pretty explicit about what's happening: you're exchanging personal data for special offerings and promotional products. Others, like downloadable services that embed data-absorbing software, are less transparent.
By far the most effective tool from the standpoint of the data brokerage industry at large is the widespread use of cookies. Invented in 1994, these Web devices were initially designed to maintain a connection between a client and a server. Cookies are text strings that remain on a client browser when it accesses a server. When a client subsequently goes back to that server, the cookie transmits retained information (such as password authentication or clicked-on hyperlinks) about what the client was doing.
Cookies have expanded considerably with the evolution of the Big Data ecosystem. Firstparty cookies are those that the browser's address bar shows in its domain and are primarily used for e-commerce purposes like remembering what you have in your shopping cart. Third-party cookies, by contrast, allow tracking from websites and domains from different address bars.