Ask anyone if they want to get something valuable without giving up a single penny in return and they will definitely say “yes”. It’s a human trait – we really love free stuff.
On the Internet, we’ve gotten used to getting products and tools for free. There’s nothing inherently wrong with this. Some companies are using a freemium model where they give away part of their product for free to entice you to buy the full product. Game companies do this all the time as do companies like Dropbox. Other companies give away their product for free in an effort to build an audience and sell ads – Google, Facebook, and Twitter for example. Although the ads can get annoying sometimes, these are all perfectly acceptable business models.
Where things get more dangerous and scary is when tools that involve sensitive information, such as healthcare, personal finance, or security are given out completely free. I want to be clear here: I’m not talking about freemium or free updates. I’m talking about 100%, no strings attached, free.
Why is this dangerous? Because companies need to make money and the easiest way for these “free” products to do it is by selling your personal data. In its most innocent form, this simply involves lead generation – think Mint.com and all the credit card offers you receive through their site after making an account. At a more insidious level, personally identifying or user activity data could be sold to third parties.
Don’t believe me? StopDataMining.Me was featured in Lifehacker last year identifying 50 data brokers who store and re-sell your personal data to others. They all have ways to opt-out but let’s be honest: how many of us even know the names of all the companies reselling our data? Even worse, you have to opt-out from each site, one by one. The problem is so widespread that The Federal Trade Commission issued a report earlier this year recommending that Congress require data brokers be more transparent and give consumers greater control over their personal information. Not much has happened with that so far but the recommendation by the FTC is a step in the right direction.
At the individual level, there’s not much we can do about all this except be aware of it. I’m not saying we should stop using free tools. Just be sure to think through the business model of whatever tool you’re deciding to use. My one recommendation would be to opt for paid tools and services for things that involve sensitive data – the extra few dollars per month is worth it.