Facebook isn’t free. We pay for it with our attention.

“Are You Really the Product?” Will Oremus asks on Slate, and hints at his answer with the subtitle for his piece: “The history of a dangerous idea.” Before getting to the meat of the argument, he gives an unexpected history of the phrase “If you aren’t paying for it, you aren’t the customer, you’re the product.” It turns out that the idea goes back to 1973, when it was first said about television, but that it emerged as an internet meme back in 2010, when I retweeted my colleague Bryce Roberts, “who had plucked [the] quote from the comments section of a post on the discussion site Metafilter.”

I had no idea I’d played a role in bringing the idea back into popular discourse, and when Will asked me to comment, I wrote to him in email:

“I had no idea I’d played a role in popularizing the phrase!

It’s never been central to my thinking. It’s cute, and reminds people not to take for granted the deal that they are entering into. But it is a deal.

I think very differently about the value exchange between consumers of an advertising driven product, the product’s owners, and the advertisers. This is a two sided market. The primary market is an unpriced market in which producers and consumers of content are matched up by interest, and the consumers ‘pay’ for the value received with their attention, which is then monetized on the other side of the market by providing a paid opportunity to advertisers to also bid for that attention. Both sides of the market receive value. And in an efficient ad market, like pay per click advertising on Google search (vs. display advertising), the advertisers are bidding for attention just like the free content providers.

Thinking about it this way helps us to understand many of today’s markets, some of which are explicitly priced, and others which appear to be free. Uber is also a two-sided market, for example, where both drivers and riders are offered a free app in return for matching them up when the passengers are looking for a ride. The paid transaction then occurs between the two parties.

The reason I think of this as a special case of any other market is that it highlights that the fundamental questions of fairness in markets still apply. Is the exchange fair? (In many ad-driven markets, the exchange is more than fair, in my opinion. We get enormous amounts of free value in exchange.) Is the exchange aboveboard? It is here that many of the ad-driven services fall down, because they resell people’s data beyond the use that was anticipated and clear in the terms of the exchange. You can think of this as analogous to hidden fees in a paid transaction.

The ultimate question in any market is “who get’s what–and why.” That’s the title of a book by Nobel-prize winning economist Alvin E. Roth, a pioneer in market design. Creating “thick markets” where the parties trust each other is fundamental. And it seems to me that in today’s algorithmically driven big data platforms, we are seeing amazing discoveries about market design.”

I was happy to see that Will picked up on this concept late in the article (though without using my comments or attributing it to me) when he wrote:

“There are at least two alternative ways of viewing our relationship to Facebook that hold more promise for making that relationship a healthier and less exploitive one. The first is to view ourselves as customers of Facebook, paying with our time, attention, and data instead of with money. This implies greater responsibility on both sides. If we understood that Facebook and other ‘free’ online services exact real costs to things we value, we might use them more sparingly and judiciously. We might finally grasp that every time we grant new data permissions or sign on to a new privacy policy, we’re almost certainly giving up a lot. Even if we don’t have time to read the whole thing, let alone comprehend it, we could equate it in our minds to spending hundreds of dollars — and then make better decisions about whether that specific app or update is still worth it to us. Ideally this formulation of users as customers forces on Facebook and other apps the responsibility of earning their loyalty, convincing them that their service is worth the tradeoffs, and not violating their trust.”

The second alternative he provides was attributed to Jaron Lanier, who makes the case that we should regard ourselves (and ask to be remunerated) as workers for Facebook.

I like Will’s conclusion: “If we don’t like how Facebook is treating us, we shouldn’t throw up our hands and call ourselves the product of a system over which we have no control. We should act like people — customers, workers, citizens, whatever — who have the power to demand change.”

The article is chock-full of interesting insights. You should read the whole thing.