Fighting to make the web pay

The anti-online tracking campaigners harrying Google are the shock troops in a wider digital war

Chris Watson

There is an increasingly clear divide – even a battle – of business models between, on one side, those that provide products or services for which the public is prepared to pay (Apple, Samsung, Microsoft, Amazon and others) and on the other, those who sell services the public expects to get for free and that are therefore paid for by other routes, primarily the collection and resale of data (think Google, eBay, Facebook etc). 

All of these companies generate data from their customer-facing activities but, so far, the ‘hardware’ manufacturers have primarily used data to improve their products and inform their marketing strategies rather than as a primary driver of profit and income. 

The second category of operators have tried to monetise their services but experience appears to have led most to conclude their primary revenue generator is the creation of services and applications that generate and then capture data in forms that can be recycled for sale on to advertisers and other participants in the digital marketplace.

What we are seeing in the privacy claim by campaign group Safari ­Users Against Google Secret Tracking is an attack on Google’s claim to own all the data it generates or captures. That data is, in fact, subject to competing claims of ownership – it may belong to individuals, service providers, creators of software or apps, or to Google. It may also be subject to economic charges such as taxes. 

We have recently seen concerted attacks – notably by the French administration – seeking to deal with the delocalisation of data capture that results in this being largely ungoverned and untaxed even though, as we have seen, there is a substantial value and profit potential in its capture and resale. 

So in some ways the Safari Users group are actually the shock troops in a wider economic war. 

And just to keep things interesting, that war has transatlantic elements too. Apart from the two economic groups described above, a third group is involved in the battle – the providers of networks and infrastructure. Their infrastructure revenues are subject to incursions from hardware and the equipment manufacturers as well as from the sellers and providers of services who manage to capture revenues and data without sharing the upside with service providers, network operators and ‘backbone’ providers.

So this is the front line in the economic battle for digital survival. As business front lines go it is pretty challenging. Many or most of the ­issues are new. They are, by their nature, highly international and in addition they raise questions that are sensitive in terms of macroeconomic policy and human rights. 

Add to this the clashes of business cultures and of national cultures and it is clear that there are no easy solutions. Equally, nor will everybody be satisfied with the outcomes – quite the opposite, in fact. Interesting times indeed.