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The price of free apps: How data collection generates billions for tech companies

By

Kassem Fawaz

4d ago· 10 min readenInsight

Summary

This article examines how free apps and social media platforms monetize user data, explaining the economics behind data collection. It details how companies collect personal information through privacy settings, location tracking, and usage patterns, then use this data to serve personalized ads that generate hundreds of billions in revenue. The article highlights the hidden trade-off between convenience and privacy that users make when using free digital services.

Key quotes

· 3 pulled
You wake up in the morning and, first thing, you open your weather app. You close that pesky ad that opens first and check the forecast. You like your weather app, which shows hourly weather forecasts for your location. And the app is free!
But do you know why it's free? Look at the app's privacy settings. You help keep it free by allowing it to collect your information.
The more customized and personalized an ad is, the more money it generates for the app owner.
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Many of the apps and social media platforms you use every day may not charge you money, but often there is a price to pay – your privacy.

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