The good and bad inside Google’s new home privacy policy

One of the reasons Google is killing its Works with Nest program is because it needs to lock down the security of the Nest devices. If Nest devices have integrations that allow third parties to gather data, Google can’t police how those third parties decide to use that data. By limiting devices to talk only with Google Home, it can act as a privacy-enforcing middleman between any devices demanding home data that don’t belong to Google.

Google also laid out very clearly what sensors were inside its devices and how it plans to use those sensors to gather data. Yes, it takes about four clicks to get to that information, but it is clearly laid out. Its transparency here is exactly what I have called for as part of a consumer bill of rights for IoT devices. But when it talks about using your data, Google is focused on the wrong thing: advertising.

Google expends a lot of effort explaining how smart home data won’t be used to serve advertising to users. For example, it says:

“And so we commit to you that for all our connected home devices and services, we will keep your video footage, audio recordings, and home environment sensor readings separate from advertising, and we won’t use this data for ad personalization.”

In a segment discussing privacy related to microphones, Google explains that it will clearly list when a device has a microphone and the device will have a clear indication whenever the microphone is on. As for the voice data it collects, you can see it and delete it at any time. It then once again addresses advertising:

“We keep your audio recordings separate from advertising and don’t use them for ad personalization — but when you interact with your Assistant by voice, we may use the text of those interactions to inform your interests for ad personalization.”

This is where, as consumers, we need to be careful. Google’s parent company, Alphabet, and Google itself generate the majority of their sales from advertising. But advertising is a model for the early, screen-based internet. As we stop spending all of our time staring at blocks of glass, the ways that companies market to us and extract income from our needs will change.

The risk is that Google’s focus — and ours! — on advertising as the central threat to our data privacy is short-sighted. In a few years, the amount of information gathered about us could help set pricing for products such as electricity, loans, or even vacations. Data derived from our connected devices could help insurers decide what level of risk we represent, or even what assignments we get from an employer. For example, an editor might assign me a story based on how much sleep I had the night before, or an insurance company might use my home data to see that I spend what it deems as being too much time away from my house. Or perhaps Google uses that data to undercut other insurers with a new product.

Today’s internet economy has been built on optimizing for engagement and attention. It is what led to the sharing of false news stories on Facebook that influenced voters during the 2016 election. And it has led to software designs that encourage users to play games and watch ads at the expense of their health and social well-being.

There are legitimate questions we still haven’t answered about how optimizing for engagement has affected society and individuals. We are starting to address the problem with a focus on the model that drove this pattern of optimization: advertising. But that’s not what we should be focused on today.

Instead, we need to understand that today’s computing platform gives us access to tremendous processing power that can make millions of correlations and inferences when given enough data. Thus ad brokerages could grab a user’s web-surfing history and place them in incredibly precise demographic categories. When done correctly, the ads or content that people see is content that is most likely to influence them.

As we expand to the internet of things, companies can move beyond data gathered in virtual spaces and pull in data about consumers’ lives from the real world. And there’s no need to limit companies to only optimizing for engagement, because in the real world companies sell real things and necessary services. Thus, the pressure will be to optimize profits.

Advertising may be a part of this, but it will be a small part. Which is why I consider Google’s focus on not using home data for advertising to be misdirected. When one can use data to set pricing or decide whether or not someone even sees a product, worrying about advertising is like worrying about getting wet while in the middle of a hurricane.

So the good in Google’s new policies is that it’s clearly telling us what sorts of data-collecting devices it has access to in its gadgets and that it is trying to explain what data they can collect. The bad is that the focus on not using that data for advertising ignores the fact that Google can use it to learn so much about people it can become an anti-competitive force in pricing across a wide variety of industries, should it choose to enter them.