The Flaws of a Freemium Mindset: Increased Transparency Needed


Legendary economist Milton Freidman once said, “There’s no such thing as a free lunch.” When Friedman made this claim, he was generally referring to the fact that nothing, in an economic sense, can be given away without someone paying a price, one way or another.

It’s interesting how relevant that quote is to the practices of many businesses and enterprises currently dominating the world economy today. More accurately described as “Freemium” many companies, especially in social media and gaming, allow users to openly use platforms, games, and products, without any upfront costs. Of course, this is certainly not true (as Friedman would have likely pointed out) due to the fact that these companies extract valuable user data for internal purposes and B2B sales. The shocking reality is that many users are aware of this, but don’t realize how valuable that data really is.

The freemium model, as well as digital culture as a whole, has made many customers somewhat numb to the fact that many large organizations hold huge oceans of unsecured personal data. Not only that, this approach has made it possible for carriers that do not utilize the freemium model and go through a third party with lax security to be vulnerable to attack.

VICE news division Motherboard recently published an article about Syniverse, a company that manages and routes text messages for some of the leading telecom providers across the globe. The article explains that Syniverse experienced a major security breach from an unknown hacker in 2016, and only recently revealed that 235 business customers and millions of cellphone users were exploited. Additionally an anonymous telecom industry insider told Motherboard that, with Syniverse’s leaked data, "I’ll know more about you than your doctor."

Freemium business models and widespread digital activity have made consumers way too relaxed when it comes to the management of personal consumer data. There’s a reason that data is often compared to gold or oil, and that’s because it has an incredible amount of potential value (much more than the average person realizes). Consumers need to get serious about how personal data is managed, and get out of the mindset that “free” services give companies the justification to take advantage of user information.  Because if nothing changes, personal data will eventually turn 100% public.

Edited by Maurice Nagle

Editor, TechZone360

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