WhatsApp? Even private chatter now exploited by billionaires

By Feb.21, 2014

Dr David Kreps

Dr David Kreps

The much-discussed purchase of WhatsApp by Facebook this week should give us pause for thought regarding the real agendas behind such monopolistic acquisitions in the tech world.

It’s clear that, with Facebook users getting older and older, the teen market is something it must buy into in order to capture the next generation.

It’s also clear that, in the manner of Microsoft or Blackberry Messengers, this is an attempt by Facebook to monopolise our “free” internet chatter in a single app. This obviously runs counter to the cross-platform appeal of email or SMS. Though even if Facebook does hold off placing advertising on this messaging platform (for a year or two), it will still have access to all the meta-data of teen chatter, so valuable to them in targeting their advertising at us on Facebook itself.

But look a little deeper and there are disturbing traces of the activities of self-styled neoliberal elites, a class unto themselves continually trying to ensure that the world runs in their best interests. The meta-data about our relationships in social networks so valuable to Zuckerberg and his advertisers is, as we have recently seen all too clearly, also extremely valuable to the national security agencies in the US and UK. It gives us the incredibly detailed depiction only Big Data can offer of the shape, trends, shifts and movements of societies: those amorphous entities neoliberals once upon a time dismissed as irrelevant to market needs. Oh, and, of course, the possibility of snooping on nasty terrorists, as they keep reminding us.

Peter Thiel, the string-puller behind Zuckerberg

We can gain even more insight into this latest acquisition by taking a look at Peter Thiel, the string-puller behind Zuckerberg. Paypal founder turned venture capitalist, Thiel was Facebook’s first big investor back in 2004 and he still sits on the company board.

As an undergraduate Thiel was taught by the French philosopher Rene Girard (and he now funds the Imitatio organisation promoting Girard’s work). Girard is famous for his assertion that all human behaviour is based on imitation – his mimetic theory – and that all conflict, as well as attempts to ameliorate it, derives from this imitation. Girard accords objective scientific status to his mimetic theory, while at the same time basing it all in Biblical references and interpretations of the New Testament.

As you can tell from Thiel’s video about Girard’s influence on his life, the Facebook capitalist believes human beings act as a “herd”, and that his success has come from second-guessing the herd mentality, innovating in spaces counter to the movements of the herd, staying one step ahead.

Thiel’s video about Girard’s influence on his life

The data about our “herd” behaviour

On the face of it, social networks like Facebook, and its recent acquisitions Instagram and WhatsApp, are places where we chat with family and friends and share pictures of kittens and our dinners. But they turn out in fact to be rather sinister harvesting machines, where shadowy government agencies and billionaire elites hoover up the data about our “herd” behaviour in their attempts to maintain social control and competitive advantage.

Many marketing professionals I know who deal in this sort of thing don’t have Facebook profiles; they know what is done with their data and want their lives to be more private than this. Perhaps we should all take their advice – or just keep moving with the herd?

David Kreps receives funding from the European Social Fund, the European Commission Framework 7 Programme, the UK Technology Strategy Board, and the UK Arts and Humanities Research Council.The Conversation

This article was originally published on The Conversation.
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2 thoughts on “WhatsApp? Even private chatter now exploited by billionaires

  1. Georgi says:

    I sent this reply to Dr. Kreps in an email, but I was suggested to post it here as well, so enjoy everybody:

    Dear Dr. Kreps,

    My name is Georgi Raychev and I am a post-grad student at Salford University. I read your article on WhatsApp and I would like to touch on some points that I don’t agree with you. Please be advised that this letter is open and it will be posted on the University of Salford Business Society’s Facebook page. Also, even though I am part of the society, please be aware that these are my own thoughts and in no case I represent the University of Salford’s Business Society with these.

    First of all, I don’t understand why do you call WhatsApp “our ‘free'” internet chatter. WhatsApp is not ours. It’s WhatsApp’s owners. Not a single person has contributed in creating, developing and distributing the application. The application is free but the creators of the app have had something in mind when creating it. They had a business model. An eventual buyout from Facebook, trust me, was the best option they had in their mind. Many of the services that we use today have followed the same path – YouTube, Skype, Viber. So point one – this app is not “our”. We just use it for free as it is.

    Second, I don’t agree that you compare WhatsApp with the email and SMS as a means of communication. WhatsApp – before and after its change of the owner has always been the same – WhatsApp to WhatsApp messaging. The fact that the owner has changed does not change the nature of the platform. As much as it will be monopolised now, it has been monopolised before. Do you remember ICQ? Why does not anybody use it now? Because something more innovative and useful has shown up. I can guarantee you, that in the same way that 10 years ago everybody used ICQ and subsequently everybody changed it for some other IM’s, the whole userbase can migrate to a different platform if something wrong happen (for example over-advertising from Facebook). Other examples of failed IM’s are the following – IM messenger by Microsoft, the IRC protocol, Yahoo messenger (all of them monopolised, according to your logic by the way).

    Third, I don’t agree with you portraying Facebook as an evil company gathering meta-data about us. Companies do that. It’s not only Facebook. Google is so much more massive in this field. For god’s sake, even car producers do it nowadays. Mobile manufacturers too. Everybody! However, all the data – personal info, activity and etc. even though monitored is shared with our will. As a Facebook user you agree with all of this and the story ends there. As you mentioned – you know a lot of people who don’t use it. But if you dig too deep into this story, you would end up not using any mobile or car with GPS service (pretty much all that are made after 2006-7), or virtually all interactive websites currently operating.

    Forth, I wouldn’t go into politics argument with anybody, but I don’t like that you portray neoliberals as evil people. Also your argument “a class unto themselves continually trying to ensure that the world runs in their best interests” is highly biased, conspiratory and lacks any sound evidence to support it. Yes, there are many conspiracy theories, some of them disregarding the fact we’ve been on the moon. SO I cannot accept those as an argument support.

    Fifth, I don’t agree with you portraying human beings acting as a herd as something bad. This is the most obvious fact in the world. The fact that the “EVIL CAPITALIST” (and yes, this is irony, as I also don’t agree with you depicting capitalists as evil people) has managed to capitalise on the fact that human act as a herd is not a reason to hate on him. He should be rewarded for providing services that satisfy the herd’s needs. And the way for the capitalists system is simple – money.

    Sixth, I don’t agree with this passage, as it is biased and lacks any sound evidence to support it – “But they turn out in fact to be rather sinister harvesting machines, where shadowy government agencies and billionaire elites hoover up the data about our “herd” behaviour in their attempts to maintain social control and competitive advantage.” If you refer to NSA’s recent revealings – Facebook and the other tech companies have been unaware of their actions. Or do you suggest that Facebook, Google, Yahoo, Microsoft, Apple and all other have been involved in a big conspiracy trust?

    Seventh, I don’t agree with you portraying the deal as something that will hurt the user. Think about this – do you use YouTube? YouTube was bought from Google in late 2006. In a sense – the same story as WhatsApp and Facebook. However, this has proved to be highly beneficial for the users. Google has incorporated the YouTube partner program where different producers are rewarded for their productions. As a consequence YouTube has thousands of channels presenting amazing variety of information and shows for free. Google has capitalised on the herd, but the herd is happy, and to be honest – I would really miss my science, economics, finance and fitness channels, if YouTube was not bought from Google. In short – Google provided more value by buying YouTube. Now, what makes you think that Facebook will not do the same as Google? To be honest, I wouldn’t mind being able to chat with my Facebook friends on WhatsApp.

    I am not arguing that Facebook is the perfect marketing machine. I am not a marketing specialists, and in fact, from what I’ve read and heard, Facebook is quite inefficient in comparison to Google regarding internet marketing. I am arguing that your article is clearly biased and subjective. I don’t want to say that is right or wrong, but when article is being published on my business school’s blog, I expect it to be objective and informative, so we the students can build the knowledge needed and make our own choices on what’s wrong and right. Because now after this article, the uneducated student will have in his mind capitalists and neo-liberalists as some evil people. The billionaires too. And for me these are notions that would lead us to communism instead to the prosperity we all seek and thrive for.

    I will finish my letter to you with the following popular quote by Adam Smith:

    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”

    ― Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations, Vol 1

    Dr. Kreps, don’t hate the billionaires. By pursuing their own interests they contribute to our lives. They enrich our society. In the end, I am sure you will read my letter on a device created by some billionaire.

  2. David Kreps says:

    Dear Georgi,

    Thanks very much for taking the time to engage in this debate! It’s great to hear your views. By way of response, I would like to make a few further points.

    “Free” Internet Chatter

    Firstly, when I talk about “free” internet chatter, I am not talking about the ownership of WhatsApp. I mean a number of things that can’t be explained in full in a blog post: When we talk on the phone, we are charged by the carrier – BT, EE or Vodaphone, etc – for the use of their network; what we say over the phone line is private, and you need a Court Order to get access to it (note the outrage at the hacking of phone calls undertaken by tabloid newspapers).

    On the Internet, we are offered by Messenger applications a way to chat to one another without paying a telecoms carrier: you pay for your internet access and the chat tools you use on it are then “free”. I put the word “free” in inverted commas, however, because many of these Messenger applications – including the Chat App in Facebook, and now WhatsApp – are nonetheless used by the creators and owners of the App for commercial gain; as you say, the apps are created with something in mind.

    What we actually say remains private (we hope) but mentions of particular words are nonetheless counted, links are followed and recorded, and aggregated knowledge about the contents of multiple chat conversations (wherein the individual conversation remains private) are of great value to marketing and advertising professionals wanting to understand trends and interests, in order better to target their advertising. It is, then, in aggregate, the sale of our private chatter that is what the creators of messenger apps like WhatsApp have in mind. Get hundreds of millions of people using your Messenger App and you have a very valuable commodity – worth billions of dollars.

    Cross-platform vs Monopoly communication

    Secondly, the point about email and SMS is that they are cross-platform, and have an appeal that monopoly apps lack. You are not restricted to using Outlook when someone sends you an email using Outlook. You can view it in Thunderbird, or Apple Mail, or Gmail.

    Similarly SMS text messages are not carrier or handset dependent; a text message sent from a Sony handset on Vodafone can be received by an iPhone on EE, etc etc. Microsoft Messenger, Blackberry Messenger, and the range of internet chat apps of which WhatsApp is just the latest and most successful, (and yes I do remember and did once use ICQ) all require you to have WhatsApp to receive a message sent with WhatsApp.

    As you rightly point out these attempts at monopoly come and go, some better than others, and so on. My point is that the communication tools like email and SMS that are not monopolies are less open to the abuse of monopolisers.

    ‘Do no evil’

    Thirdly, I am not portraying anyone – or any company – as ‘evil.’ Nor am I advocating that it is just ok that giant tech companies (don’t get me started on the ‘do no evil’ Google) gather meta-data about us.

    Nor do I agree that most people are really aware that their formerly private data is being gathered, sold on, shared, and used. But do you really know how much these companies know about you?


    Fourth, although the term neoliberal is sometimes contentious, it nonetheless does capture a certain attitude to socio-economic life, and remains a useful term to describe those who advocate a market-led approach to most things. [http://en.wikipedia.org/wiki/Neoliberalism] My questioning of neoliberalism is what is known in academia as a critical perspective, not bias, and concentrates on how neoliberal society has seen the emergence of mega-rich elites – those at the very top of the private sector who wield enormous influence.

    I am certainly not advocating any ‘conspiracy’ theory, as you seem to suggest, either, merely acknowledging that there are plenty of extremely wealthy people who exert their influence as best they can – not in concert – but for their own best interests. That they act as a ‘class’ does not imply that they are in cahoots with one another; on the contrary, they are in competition with one another.

    The ‘herd’

    Fifth, your assertion that the portrayal of human beings acting as a herd is ‘an obvious fact’ is your opinion, that of Rene Girard, of Peter Thiel, and others. Nonetheless, it is clearly possible that some people – and Peter Thiel believes he is one – do not act with the herd, otherwise how would it be possible to second-guess the herd behaviour, and keep ahead of it?

    The belief that humans act as a herd in fact requires a belief that some humans don’t, and these independent thinkers are therefore ‘better’ than the rest. Such is the beginning of political beliefs that grant to ‘elites’ the ‘Right to rule’. It is, in fact, exactly the opposite to a belief in democracy, which grants to each and every human individual the right to self-determination.

    Mass digital surveillance

    Sixth, there is, in fact, a great deal of evidence to support it. Edward Snowden, who recently released a huge amount of evidence concerning the gathering of this data by the US and UK security agencies, not only showed us that the security agencies were interested in the data gathered by companies such as Facebook, but gave us insight into the nature, extent, and depth of that data, too.

    Indeed, in many countries around the world, including in the UK, [http://www.theguardian.com/uk-news/2014/feb/27/mps-summon-security-services-watchdog-mark-waller-snowden] (where the security services watchdog has been summoned to appear before MPs after refusing to appear voluntarily to answer their questions) there is a great deal of concern over this. It is not whether Facebook or Google or Apple knew what was going on or not that concerns me; nor am I suggesting that they were acting in cahoots, either with each other or with the security agencies.

    The interests of the billionaire neoliberals and the security agencies are not the same. Competitive advantage and social control are not (necessarily) linked. It is the fact of the sheer quantity of data that is gathered, and the fact that the security agencies are getting it too, that is my concern. At no point am I suggesting a conspiracy between them. Nonetheless, the mass digital surveillance of populations, it seems, is made all the easier by the activities of companies like Google and Facebook, and our ‘trust’ in such companies keeping our data private is severely dented by the Snowden revelations.

    Put simply, whether by design or not, that trust has been broken.

    ‘Hurting’ the user

    Seventh, the users of WhatsApp were attracted to it largely because it was “free” compared to SMS text messaging, and also because it carried no advertising – as a point of principle on the part of its creators. This was core to its appeal.

    Now that hundreds of millions of people have become used to it, and, Facebook hopes, will stick with it (until something better comes along), it will, most likely, even if not for a year or two, eventually carry advertising. The aggregate data harvested from the private chatter will – with immediate effect – become of value to Facebook, and, it seems, quite possibly, be intercepted by the NSA, too. So it ceases both to be “free” (albeit it the payment is by giving access to your data,) and it will soon carry advertising.

    This is why I portray the deal as something that will ‘hurt the user.’

    Critical perspective

    I am arguing that Facebook is the perfect marketing machine. Its market capitalisation in the hundreds of billions of dollars [https://ycharts.com/companies/FB/market_cap] is solely down to the revolution in targeted advertising that it represents. My critical perspective is not a ‘bias,’ but a healthy scepticism that does not simply accept the world as it is and go along with it.

    To suggest that support for one approach to socio-economic affairs is ‘objective’ and another ‘subjective’ is to attempt to clothe one form of economics with the attire of the physical sciences, and deny such attire to another form of economics. The truth is that all economics belongs to the humanities, and is, in the end, a branch of sociology.

    Finally, the suggestion that billionaires pursuing their own interests contributes to our lives, and enriches society, flies in the face of the reality that the growing liberalisation of markets (in the US in particular, but also in many other parts of the world) since 1979 has seen the gap between rich and poor increase [http://www.cbo.gov/publication/42729], steadily, back to 19th century proportions.

    The consequent erosion of the middle classes, and concentration of wealth in the very highest echelons of society, is in fact strikingly bad for a healthy capitalist economy [http://www.huffingtonpost.co.uk/mehdi-hasan/ed-miliband-economy-inequality_b_4904956.html?utm_hp_ref=uk], let alone for social cohesion. In December, Barack Obama called this income gap “the defining challenge of our time.[http://www.whitehouse.gov/the-press-office/2013/12/04/remarks-president-economic-mobility]” No less than the International Monetary Fund (IMF) said in February that inequality hinders growth [http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf].

    I did not read your letter on a device created by some billionaire. I read it on a device more likely created by a poor Chinese worker who had to stand for a 12 hour shift with just two 30 minute breaks, six days a week [http://www.theguardian.com/technology/2013/sep/05/workers-rights-flouted-apple-iphone-plant].

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