“Surveillance Capitalism” and Your Privacy

“Surveillance Capitalism” and Your Privacy

By Mark Nestmann • February 11, 2020

A growing network of companies, along with law enforcement and intelligence agencies, are quietly capitalizing on the explosion of data that most of us unknowingly generate as we go about our day. Whether it’s images of our faces secretly compiled in giant databanks or records of our movements assembled and analyzed, our right to privacy is under attack as never before.

The business model that makes all-pervasive monitoring possible has been dubbed “surveillance capitalism.” Its success depends upon the collection of your data, without your awareness (including your facial features) by companies that have created business models to profit from compiling, analyzing, bundling and ultimately reselling it to the highest bidder.

Here's an example of how the model works:

Hoan Ton-That is an Australian of Vietnamese descent who lives in New York City. He’s a self-taught engineer who has created dozens of successful smartphone apps. In 2017, he and a business partner created a start-up company called Clearview AI. The company’s purported mission is to “identify perpetrators and victims of crimes.”

That sounds wonderful until you understand how they do it. Using the Clearview app, you take a picture of a person, upload it and obtain a near-instant match from a database of more than three billion photos the company retrieved from YouTube, Twitter, Facebook, Venmo and millions of other websites.

Clearview says it has sold the app to more than 600 law enforcement agencies in just the past year. A few private companies are also using it for security purposes. The company claims that its technology has “helped law enforcement track down hundreds of at-large criminals, including pedophiles, terrorists and sex traffickers. It is also used to help exonerate the innocent and identify the victims of crimes including child sex abuse and financial fraud.”

But at what cost? Will law enforcement agencies entrusted with this tool refrain from using it to stalk political dissidents? Will intelligence agencies use it to unearth secrets about their citizens and then blackmail them? Will hackers succeed in taking over Clearview’s database of three billion photos?

And, in common with other surveillance capitalists, there are few (if any) limits on Clearview’s ability to aggregate, sort and identify facial images uploaded to its app. While Google, Facebook, and other tech giants have tried to get Clearview to stop downloading images posted on their respective sites, the company claims it has a First Amendment right to collect photos that web users have posted in public forums. And it could well prevail on this claim in court, because there are legal precedents that allow companies to retrieve or “scrape” data from websites.

And Clearview is just one company.

It turns out that if you have Google Maps installed on your smartphone, it tracks everywhere you go, even when you’re not using the app. Fortunately, you can configure the app not to do this. The iPhone 11 does the same thing, supposedly to comply with international regulatory requirements. And you can’t turn it off.

When was the last time you read the privacy policy or terms of service for Google, Apple, or other tech giants? Or for your smart mattress? Surveillance capitalists assume you won’t pay attention to these mind-numbing disclosures as to their right to collect, sort, aggregate, and sell your data to the highest bidder.

In case you’re wondering how surveillance capitalism works in practice, check out this leaked training video from Google. The video, obviously not intended for public distribution, described the data produced by a girl on her cell phone – all snatched up by Google without her awareness.

That data, according to the video, “describes our actions, decisions, preferences, movement, and relationships.” Google uses the analogy of a ledger, with the data siphoned off the web by the internet giant being “a constantly evolving representation of who we are.”

The ledger, of course, is you. And the video makes it clear that Google believes you do not own the data about you, but that you are merely a “transient carrier” of it.  What’s more, Google suggests that over time, it could provide “more inputs” to the ledger with the goal of modifying your behavior.

Google’s terms of service say that your browsing habits “may be” combined with other data to which Google has access. This includes the contents of your Gmail messages, records of your Google Maps searches, your Google calendar appointments, and anything else it can scrape from your browsing records.

Now, the surveillance capitalist model is spreading to financial services. Amazon, Facebook, eBay, Alipay and Google have all acquired payment-related licenses in Luxembourg, Ireland, Lithuania, and other countries. And Facebook announced it wants to create what it calls an “alternative financial system” based on a cryptocurrency called Libra.

It’s a natural fit. According to a report from the Bank for International Settlements, the world’s “central bank for central banks”:

Big techs’ low-cost structure business can easily be scaled up to provide basic financial services. Using big data and analysis of the network structure in their established platforms, big techs can assess the riskiness of borrowers, reducing the need for collateral to assure repayment.

And get this: to prevent the likes of Amazon and Facebook from having an unfair advantage in their efforts to offer financial services, governments want to force them to share this data with traditional financial services companies. For instance, the UK’s Financial Stability Board has suggested that authorities may wish to consider promoting the “mobility of data” from tech giants to “the various actors that are involved in the provision of financial services.”

To see where all this headed, look no further than China and its dystopian Social Credit System. It comprises a series of massive searchable databases on 1.3 billion Chinese citizens, created by aggregating data from all public and private sources. It includes data collected from social networks, web searches, records of electronic purchases, and other information to assign each citizen a “national trust score.” In 2018, the system prevented people with low scores from buying nearly 18 million flight tickets and 5.5 million train tickets after they wound up on a blacklist for social credit offenses.

While privacy advocates are calling for much stricter controls on surveillance capitalism, it thrives because it makes life more convenient and perhaps even safer for most people. The average citizen will gladly trade away their privacy for convenience or safety.

New laws might slow down the surveillance capitalists, but there’s only one way to limit their unfettered use of our personal information. And that’s to establish an ownership right to our own data, including our facial features, and forbidding use of it without our permission. Most people would probably opt into certain forms of data sharing, especially if they received a benefit for were paid for its use. Individuals like me who worry about the implications of uncontrolled data sharing could opt out. That’s the only way I can think of to stop is will otherwise an inevitable slide into a global Social Credit System.

Protecting your assets (and yourself) against any threat - from the government, the IRS or a frivolous lawsuit - is something The Nestmann Group has helped more than 15,000 Americans do over the last 30 years.

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About The Author

Since 1990, Mark Nestmann has helped thousands of clients seeking wealth preservation and international tax planning solutions. He is the author of highly acclaimed Lifeboat Strategy and other books & reports dealing with these subjects.

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