Most of us are becoming aware that our digital attention is hard currency for companies like Google and Facebook. By analysing our digital behaviour patterns, they can target tailored advertising directly to our feeds. Our attention becomes the product that is sold to advertisers. For example, YouTube’s three billion monthly users generated about €30 billion in revenue – mainly from services perceived as free.
Often, this data is collected through mobile applications that do not cost money to download and install. But according to researchers from LiU and RISE, there are more costs, in addition to personal data, associated with the free apps.
“Putting things off, procrastination, was the biggest hidden cost. But sleep deprivation, reduced focus and the apps taking time from physical contact with friends, hobbies and training, were also costs that arose. It can be difficult for users to put their finger on it at the time,” says Martin Mileros, PhD student at Linköping University and researcher at the research institute RISE.
Decoupling cost and value
The phenomenon the researchers are investigating is called the zero-price economy, which means that a service provider offers its services in exchange for the user’s data and attention without money changing hands. In traditional economics, the cost to the private individual corresponds to value for the company. But in the zero-price economy, cost and value are decoupled.
The researchers interviewed 196 people in Linköping around the university campus and the science park. Therefore, the selection cannot be said to representative of the entire population.
“We can see that many users value privacy and transparency highly. Furthermore, the study shows that users prefer to make one-time purchases of their favourite apps to protect their privacy over using services that are free, but which collect personal data,” says Martin Mileros.
Addictive
In addition to more transparency from the companies, the researchers also want policy makers to place tougher demands on companies to disclose potential hidden costs.
“Many apps are designed to make us more or less dependent on them. Children and young people are particularly vulnerable. There should be stricter restrictions for many apps but also some sort of information about hidden costs. You might compare it to the graphic warning messages on cigarette packets. And for users, it’s important to understand these potential hidden costs and make more informed choices,” says Martin Mileros.
Although the findings of the study suggest that there are hidden costs, Martin Mileros still thinks that many users can get a lot of benefit and enjoyment from the free apps.
“You can find information, chat and so on. Also, you can change apps without much trouble if you don’t like something. So, it could be seen as a win-win situation where both companies and individuals benefit. But it’s easy to forget the other aspects of app use.”
Funding for the project comes mainly from RISE.
Article: , Martin Mileros, Robert Forchheimer (2024). Digital Policy, Regulation and Governance, published online 27 August 2024. DOI: 10.1108/DPRG-01-2024-0009
