The Economic Model You’re Participating In
The ‘free’ internet services that dominate daily digital life — search, email, social media, mapping, video streaming — operate on an economic model where the product is the user’s data and attention rather than the service itself. This observation has become so widely stated that it risks feeling like received wisdom without specific meaning. The specific meaning: the data generated by your use of these services is collected, analysed, packaged, and sold in ways that generate the revenue that funds these services, and the economic value of that data is substantial enough that the services can be provided at zero monetary cost while generating billions in annual profit.
Understanding the specific mechanisms by which data generates value — not at the vague level of ‘they sell your data’ but at the level of which data, to whom, for what purpose, and at what value — produces a more accurate understanding of the arrangement than the simplified version typically discussed.
What Your Data Is Actually Worth
The value of consumer data varies dramatically by type. Purchase intent data (what someone is actively shopping for) is among the most valuable — a person actively searching for a car, a mortgage, or a health product is worth significantly more to relevant advertisers than a person with general demographic characteristics. Location data is valuable for understanding real-world behaviour patterns — which stores people visit, how they commute, where they live and work. Health data is increasingly valuable for insurance underwriting and pharmaceutical targeting. Financial behaviour data (spending patterns, account balances, credit utilisation) is valuable for financial product targeting.
The aggregate data value per user varies by country, income level, and user behaviour. Facebook’s average revenue per user in the US and Canada is approximately $60/year; in Europe it’s approximately $20/year; in the rest of the world significantly less. This gradient reflects both the higher advertising rates in wealthy markets and the higher data value of users with higher purchasing power. Each user’s specific data value is opaque — companies don’t disclose what individual users’ data generates in advertising revenue.
The Data Broker Industry Most People Don’t Know Exists
Beyond the major platforms, a largely invisible data broker industry collects, aggregates, and sells consumer data from multiple sources. Data brokers (Acxiom, LexisNexis, Experian, TransUnion’s consumer data business, and hundreds of smaller firms) compile profiles from public records, purchase history from loyalty programmes, credit data, online behaviour tracking, and hundreds of other sources. These profiles are sold for marketing targeting, background checks, employment screening, insurance underwriting, and other purposes without any direct interaction with the consumer whose data is being sold.
The data broker industry largely operates outside the consumer’s awareness and consent in most jurisdictions. California’s CPRA gives California residents the right to opt out of data broker sales; Vermont requires data brokers to register and provide an opt-out mechanism; the EU’s GDPR provides stronger subject access rights. In most US states, the data broker industry has no consumer-facing consent or opt-out requirement.
What Privacy Regulation Is Changing
The privacy regulatory landscape has changed significantly since GDPR took effect in 2018, and continues to change: state privacy laws in the US (covered in the Tech News section of Vol. 4 in detail), the EU’s Digital Services Act data access requirements, India’s Digital Personal Data Protection Act, and regulatory actions against specific data practices have created the beginning of a framework that limits some of the most unconstrained data practices.
What regulation has changed in practice: cookie consent requirements have reduced some third-party tracking (though the dark patterns in cookie consent interfaces have limited their effectiveness); app tracking transparency has reduced mobile advertising ID access; several major data brokerage practices have faced FTC enforcement; and the general awareness of data privacy as a consumer right has created market pressure on companies to improve privacy communications even where not legally required.
Personal Responses That Are Actually Effective
The individual privacy actions that meaningfully reduce data collection by the privacy economy’s primary mechanisms: using a browser with strong tracking protection (Firefox with uBlock Origin, Brave) for web browsing reduces the third-party tracking pixel and cookie data collection that funds programmatic advertising; opting out of interest-based advertising in every app and platform that provides the option (this reduces targeting quality rather than ad volume but reduces the incentive for data collection); and requesting data deletion from major data brokers that provide the mechanism (manual, time-consuming, and not permanent, but reduces the profile completeness that enables the most targeted advertising).
The broader privacy response — choosing privacy-respecting services where adequate alternatives exist, understanding what data is being collected before sharing it, and supporting regulatory frameworks that create enforceable rights rather than relying on individual action for privacy protection — addresses the systemic nature of the privacy economy more effectively than purely individual measures. Individual privacy actions reduce personal exposure; policy and regulatory frameworks change the economic incentives that structure the system.