How Privacy Agreements Impact Social Media Revenue

Written by Meera Manek on Saturday, 30 October 2021. Posted in Business Analytics

Photo by Jeremy Bezanger on Unsplash


Social media has become entangled in our daily lives so intricately that most people check their Facebook, Instagram or Twitter profiles hourly or even more often. In fact, a few weeks ago all the platforms owned by Facebook were down for just one day, and it seemed as if the whole world had been thrown into havoc. 

We are so reliant on these technologies that we don’t realize how much monetization and revenue companies earn with every minute we spend scrolling through their platforms. Although it may seem shocking, social media companies earn money by “selling” their clients’ data.

A recent Forbes’ article discussed Facebook’s founder, Mark Zuckerberg’s, view on data mining and the use of consumer data for money. Multiple emails were released demonstrating Zuckerberg’s proposal to allow third party companies to purchase user data at a per-user fee to Facebook. Although Facebook did not follow through with this proposal, many people were extremely taken aback by the idea that companies would be willing to sell their users’ data without consent.

There’s the catch, however. Many platforms have already been given explicit consent to share data by users themselves.

The long “terms and conditions” agreement that we often ignore has become much more of a problem now that the debates of consumer privacy and ethics of data selling have emerged on the global stage.

If consumers choose to deny access of their data to any social media platform or company, it can cost the company hundreds, even thousands of dollars over the years that the consumer uses that specific social media platform. This may seem insignificant to multibillion dollar corporations, but as awareness spreads, thousands of people are becoming more aware about their data sharing settings that can cause losses of millions of dollars.

The public, especially, has been blindsided by this. Most people didn’t even know that their data was being shared until a few years ago, when Zuckerberg was tried in Congress. New regulations need to create transparency in the world of social media so that consumers know what data they want to be shared and what they want to keep private. Additionally, in order to retain its customer base, companies like Facebook need to be able to earn back the trust of the public. Without the user base, social media platforms are rendered functionless, and this could be the catalyst of a movement away from large scale, data sharing social media platforms. 

Many younger generations are seeking out ways to be more aware about the impacts that large corporations have on the problems we face globally, and evolving privacy agreements is just one great example of this. As long as people continue to demand transparency and privacy, the people’s rights will be protected.

About the Author

Meera Manek

Meera Manek

Meera is a Business Analytics Writer at Girls For Business.

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