Spotlight: How and Why Companies Use Personal Data

by Alex Braun ‘23

In the digital world, privacy is more of an abstract idea than a reality. Millions of users everywhere would like to think that they are safe on the Internet, or that through the use of anti virus software they are protecting themselves from unwanted surveillance and tracking. Unfortunately, this is not the case. Every website visited and every service used on the Internet collects data, and uses it in a variety of ways.

The data collected by businesses online varies in nature. The main four types are personal, behavioral, attitudinal, and engagement data. Personal data includes social security numbers, device ID, IP addresses, and browser cookies. Behavior data is based on statistics, like purchase history, product use, and online repeated actions. Attitudinal data is the measure of customer satisfaction, desirability of a product or service, and purchase criteria. Engagement data is common on social media, dissecting how consumers interact with a business’ website, social media pages, emails and advertisements.

To collect the data, businesses use many different strategies. The main ways to collect data are by directly asking a consumer for information, by tracking customers, or by using other sources of a customer’s data. A business may ask for cookies when a user navigates to their website, or they may just track the user’s IP address without their knowledge. Businesses also can use their customer service record to see how customers reacted and interacted with their sales department, and can use that as direct feedback to determine what strategies work on that customer and what doesn’t.

Using the data, companies have many possible actions to take. One of the more common ways is to refine marketing. Companies can put out advertisements in different ways depending on the product and consumer, so that after the data is collected and analyzed, the company can implement a strategy that can predict the demand and reaction to a product and make marketing decisions from there. The collection of data can bring large financial gain to companies as well if they choose to use it in that way. There is a market for data, and much of the data collected every day ends up being sold to data banks to be bought by other businesses looking to expand their reach. The most dangerous aspect is the ability of companies to use data to obtain more data. Passwords could be the data collected, and in the wrong hands, that can have dire consequences. Phone numbers or bank information could be bought by call centers that will then use the information to scam people.

There is no easy way to stop all this data from being collected. All people can do is make sure that the data voluntarily given is safe and will not be used for the wrong purposes. The best way to stay safe online is to stay aware.