GeneralIslamic Finance

Is It Halal to Sell Data? | Reflections on Muslim Pro Debacle

Muslim Pro are the most popular Muslim app in the world, with over 90 million downloads. A recent Vice news story shared that Muslim Pro’s data had ended up in the hands of the US military.

In this article I examine:

  1. what happened;
  2. what we should do; and
  3. how Islamic law approaches the buying and selling of data.

I conclude that while Islamic law technically allows the selling of data, there are important ethical considerations that should be kept in mind and adhered to.

What Happened?

Muslim Pro need to monetise their app and some of the ways they do that include:

  1. selling premium subscriptions;
  2. ads; and
  3. it turns out, selling data.

This is not unusual. In fact in a 2017 study, the Yale Privacy lab found that over 75% of the apps on Android had a tracker. They said:

These trackers vary in their features and purpose, but are primarily utilized for targeted advertising, behavioral analytics, and location tracking.

Muslim Pro sold their data to a company called X-Mode, which in turn sold this data to others through whom it ended up with the US Military.

So the headline is incredibly damaging to Muslim Pro but it would be unfair to them to conclude they somehow struck a Faustian pact with Lucifer himself to hand over the locations of Muslims all over the world as they communed with the Almighty.

However the fact remains – they did sell data. So let’s examine that a bit.

Is it legal to sell data?

At a high level – yes – as long as you consent.

However, It is prohibited in both Apple and Google’s policies to sell data except if it will improve the app experience or help in displaying ads and targeted ads.

But most apps either get around that by selling to “marketing” firms and there are now simply too many apps (millions) on each app store for Google or Apple to effectively police this stuff.

And it would be rather hypocritical of Apple and Google to do that anyway given the reams and reams and reams of information they collect on customers and then use to their financial advantage. It’s like having a sheriff addicted to heroin tasked with cleaning up the heroin trade in the town.

Then the privacy policy of an app should disclose if there is any funky stuff going on. However, let’s face it, no one reads that stuff. And when you do, you will usually find incredibly obfuscating, vague, and broadly-drafted language that essentially provides that anything goes.

But is it fair/ethical to sell/exploit data?

This is a much trickier question.

On the face of it, there are clear reasons why selling of data and exploiting data should be seen as perfectly acceptable. We often come across young businesses who sell data to make money as part of our startup search work at IFG.VC, our angel syndicate.

Here are some of the key arguments in favour of selling data.

  1. A small app operating in a world where the likes of Facebook, Google and Youtube have made “free” the default pricing, will struggles to survive when it starts charging for something. So it looks for alternatives – and selling anonymised data seems like a nice win-win. Customers get to use the app for free – but there is a cost to creating these apps of course – and that cost is their anonymised data gets sold. The app survives, and customers continue getting free stuff.
  2. Exploiting data to make better sales is an integral part of business. After all, the only way to reliably improve one’s sales is precisely by reading the data and adjusting accordingly. It is the modern-day version of the focus group. There is nothing devious about it. It’s just business.
  3. Large pools of anonymised data is essential for the optimisation of various services, and even, medical research. So such harvesting of data can be a force of great good. And let’s face it – fundamentally it’s not like these apps took our blood while we slept and sold it on the black market is it? They sold anonymised data.

However in our view there are two important considerations here that should limit the selling/exploiting of data:

  1. Economies run smoothly and fairly when there is a degree of healthy competition in the market. Where the business gets a good price, the buyer gets a good deal, and others can try to enter the market and compete. The reason why healthy competition can occur, and why customers often get a good deal, is because there is information asymmetry. The customer sometimes is willing to give £10 but gets the good for £7. The business is sometimes willing to sell for £5 but gets £8.But in a world where Google, Facebook, Amazon and others hold so much data about you, the consumer’s surplus is reduced to zero. Now Google and Amazon etc. know exactly what you are willing to pay and will price the good for you at that.

    And its not like you can negotiate with these big guys (or indeed any app). It’s a take it or leave it scenario and the utility of these juggernauts is so great that we have no choice but to lump it and accept them warts and all.

    So in other words, the excess selling of data and concentration of it among big players is causing unfair markets which favour one side hugely. In our view this has tipped a little too far. Check out this documentary on Amazon for example. They literally know what you will buy even before you know it yourself.

  2. For smaller players we are much more comfortable with them selling data. However this must be explicitly flagged to the user in either a simple privacy policy or as a check-box or equivalent that specifically highlights that “hey guys, we’re going to use your anonymised data to actually make money – you cool with that?” If the consent is given then all good. But if not, then you can block the person from using the app and part ways. What you mustn’t do though, is use weasel words in your privacy policy and keep this rather important aspect of your business model rather quiet.

What Should we do?

We suspect Muslim Pro will massively sort its act out on the X-Mode data-selling front and never make a similar mistake again. Apparently they’ve only been selling to X-Mode for 4 weeks, so this development is relatively recent.

1. I’d hold judgement on Muslim Pro and see how they respond.

To be fair to them, it does appear they have severed ties with X-Mode already.

2. I would restrict all the free data you give the large corporate as much as you can.

They literally use this to sell to you better and that works against you – so why strengthen their hand when you don’t have to?

I see this as a negotiation and we, the consumer, should fight back.

3. If you’re a Muslim app (or indeed any app) do not be cavalier with customer data. This is an amanah.

I am not saying “never sell data” as this is a legitimate and acceptable business model.

But what I am saying is that if you do do this, then make sure that consumers are crystal clear on what is going on and the right to opt-out.

4. We kinda have ourselves to blame. We want free stuff.

We consumers often call foul when we find out about data harvesting, but we don’t want to pay for anything. There is a culture of freemium. This is not the same culture in the East where subscription for apps is common.

For example, we would not want to pay for a bank account as we’re used to it being free. But we know that the only reason a bank is happy to provide a current account is because it can then use that money to strengthen its book and to borrow to people with.

So be more aware of your actions and be more open to actually paying for stuff. Because, ironically, in the long-run the free stuff could end up costing more.

How does Islamic law approach selling data?

It is permissible to sell data as it does constitute “mal”. However, as data is personal, there is a right attached to each packet of data in favour of the person whose data it is. If however the person contractually (via a privacy policy) foregoes their right, then the app has no sharia issue in selling that data.

In other words, you have a right to control what happens with your data unless you willingly give it up.

This “giving up” can be explicit or implicit. You would choose between the two depending on the sensitivity of the data. If it is relatively innocuous accessing of prayer times data, then implicit (via privacy policy) is fine. However if it is data around your heart beat then more explicit permission (via checkbox or the like) would be more appropriate.

So the purely technical analysis allows you to sell data. However, the ethical considerations we discussed above still remain.

The sharia analysis has been drafted with thanks to Muftis Faraz Adam and Billal Omarjee for their comments.



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