Facebook data collection raises questions for mobile operators

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As Mark Zuckerberg faced questions from US Senators last week about the alleged misuse of personal data by Cambridge Analytica, the issues of potential subversion of democracy, privacy, and data protection are more likely to be at the forefront of the general public’s thoughts rather than the mobile industry.

But among the many revelations that resulted from the scandal was that Facebook had been collecting call records and SMS data from Android devices for some time.

Although never a secret practice, many users were unaware of this and only discovered the collection when they decided to take Facebook up on its offer to download all the data that the social network held on them.

For most people, this was images, likes and posts, but others noticed that years’ worth of phone call data, along with names, numbers and duration.

Contact data collection

Now it’s important to stress that this was an opt-in feature as Facebook uses phone book data for its friend recommendations. However ArsTechnica notes that if this permission was granted before Android 4.1 Jelly Bean, then giving Facebook access to read contacts also gave them access to call and message logs.

This permission structure was changed in Android 4.1 which means two separate permissions had to be granted – one for contacts and one for contact logs. But it is also noted that a more explicit request for this data is made by the Facebook Messenger application for Android. In contrast, iOS does not allow this data to be shared.

Facebook responded with a blog post that said users had to consciously give their permission for such data to be collected and that this can be switched off at any time, with all previous data deleted.

“When this feature is enabled, uploading your contacts also allows us to use information like when a call or text was made or received,” said Facebook. “This feature does not collect the content of your calls or text messages. Your information is securely stored and we do not sell this information to third parties. You are always in control of the information you share with Facebook.”

Regardless of whether you think this is an intrusion of privacy or just a handy way to find more people that you know online, the practice is one that will attract interest from mobile operators.

Mobile operator revenue

Over the past few years, mobile operators have had to compete with over-the-top (OTT) applications that use their data networks, but from which they don’t receive any direct financial benefit from and in some cases actually bypass their own services.

A good example is chat applications like WhatsApp, which allow users to circumvent SMS, MMS and international call charges. A recent report from ReportLinker claimed that in 2016, 89 billion SMS messages were sent but this is set to fall to 64 billion in 2018. In 2020, the figure is expected to be 40 billion.

The issue of Facebook’s data collection impacts two major industry issues. The first is regulation. Telecoms companies, especially in Europe love to complain that they are subject to strict rules whereas OTT player are not. This, they argue, means there isn’t a level playing field.

Zuckerberg has suggested that the social media industry may have to accept greater regulation going forward and the operators will be keeping a key eye on proceedings.

In-built advantage

But the revelation that Facebook has large amounts of user call and message data will be more worrying. Being an OTT application might mean you benefit from networks built by others, but not being integrated means you can only see what users are doing on your application. Telcos on the other hand have access to integrated billing and the ability to see everything that takes place on their network.

Call and message data is a treasure trove of information that was seemingly supposed to be for the network providers’ eyes only. If an OTT competitor also has this data, then that advantage has been eroded.

“The Facebook infringement on mobile operator data is not something new that happened overnight,” argues Indranil Chatterjee from Openwave Mobility, a firm which helps mobile operators manage their traffic. “OTTs such as Google and Facebook launched the land grab a few years ago. In 3 years they wiped out operators’ voice revenues and in 2 years they mopped up messaging. 

“Operators are still holding on to PII (Personally Identifiable Information) data regarding subscriber billing information etc. but the operators are not allowed to use that data. Contrast that with the carte blanche approach OTTs take. They play by different rules. And those rules could be about to get a lot tougher as EU and US regulators adopt stricter regulation.

“There’s no such thing as a free lunch and OTT have certainly feasted on other people’s lunches. OTTs are so large and powerful that regulation might not impact them too much – it might be the businesses such as mobile operators who rely on user data that suffer the consequences of tighter regulation – while the OTTs continue to grow stronger.”

More regulation?

The end result of this is likely to be greater regulation of social media platforms, but what this means is still up for debate. It’s possible that the imminent arrival of the EU’s General Data Protection Regulation could be a basis for other regulators.

“In the hearings, Zuckerberg repeated a concept he has been voicing for the last few weeks, and admitted regulation is now ‘inevitable’ for online platforms,” says Luca Schiavoni, an analyst with Assembly Research. “He also added, though, that regulation could be easy to comply with for a large company like Facebook, whereas this could be more difficult for a smaller start-up.

“Size of businesses aside, regulation will have to be designed with two objectives in mind: the improvement of transparency and user awareness; and the flexibility needed to make sure rules do not become outdated too quickly. To this end, well-monitored guidelines could go a long way, so long as there are sufficient incentives for companies to keep a trustworthy behaviour.”

Facebook’s use of phone data might be nothing new, and regulation might not change anything, but the saga serves as a reminder of the difficulties that many operators have when competing with the platforms. And they may increase calls for OTT regulation in the future.