Memorial University of Newfoundland (MUN) has a partnership with a company that seems to be in the business of surveillance capitalism. Along with the direct cost, there are also educational and ethical questions surrounding the use of the software. The university seems to proceed as though there are no issues with “experience management” systems.
A recently obtained access-to-information request reveals that MUN spent over $100,000 on software from Qualtrics.
The cost for Qualtrics is between the Provost’s Office and the Office of the Vice-President (Research). The current license started in June 2018 and ends in June 2021.
The following outlines the three-year breakdown of fees cost-shared; these are in U.S. dollars, so the relevant exchange rate applies:
Year 1 $25,500.83
Year 2 $28,500.00
Year 3 $30,000.00
1 United States Dollar equals 1.21 Canadian Dollar so $84,000.83 USD equals $101,839.67 CAN.
The software company defines itself as “Qualtrics, the world’s No. 1 Experience Management (XM) platform and creator of the XM category is changing the way organizations manage and improve the four core experiences of business––customer, employee, product, and brand. Over 13,500 organizations around the world are using Qualtrics to listen, understand, and take action on experience data (X-data™)––the beliefs, emotions, and intentions that tell you why things are happening, and what to do about it. The Qualtrics XM Platform™ is a system of action that helps businesses attract customers who stay longer and buy more, engage employees who build a positive culture, develop breakthrough products people love, and build a brand people are passionate about.”
On November 11th, 2018, one of the world’s largest software companies, SAP (System Analysis Program Development), announced their acquisition of the survey software maker Qualtrics International Inc for $8 million.
Qualtrics competes with SurveyMonkey, which went public in September 2018. Qualtrics was immense and growing faster than SurveyMonkey and was also more profitable. Qualtrics got most of its sales from subscriptions. They also generate revenue from their research in-demand option that allows customers to obtain feedback from a group of respondents. In the first half of 2108, Qualtrics revenue growth was 41.7 percent to $184.2 million compared to SurveyMonkey at $121.2 million in revenue.
In January of 2021, Qualtrics went public just two years after being bought by SAP, and trading began on NASDAQ. Qualtrics shares increased 50% on the first day of trading and closed at $45.50. The company raised $1.55 billion in going public. The shares trading on the Nasdaq index is under the symbol XM.
If you read their promotional materials, one finds a lot of jargon, such as in the document titled “UNITED STATES SECURITIES AND EXCHANGE COMMISSION.” This was for the fiscal year ended December 31st, 2020
Under the Business Overview section of the document, they discuss experience management, “We have pioneered a new category of software, experience management, or XM, which enables organizations to succeed in today’s experience economy. Our XM Platform helps organizations both design and improve the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions, and brands into religions.”
“Experience management is the business discipline of finding and fixing experience gaps. These gaps––the difference between what businesses believe is happening and what is actually happening––are where poor experiences live. Left unresolved, experience gaps result in customer churn, employee attrition, failed product launches, and eventually, brand irrelevance.”
By “experience management,” it seems like what they actually do is sell data to third parties.
In their NASDAQ prospectus, they state, “Use of our XM Platform involves the storage, transmission, and processing of data from our customers and their users, employees or other personnel, including certain personal or individually identifying information.”
They state in their prospectus that the market on selling user data and algorithms is currently largely unregulated and that should jurisdictions develop more robust privacy laws, it could cause harm to their revenues.
They state that “Privacy, data protection, and information security concerns, and data collection and transfer restrictions and related domestic or foreign regulations, may limit the use and adoption of our XM Platform and adversely affect our business.”
Furthermore, they state, “As a global software and service provider, we are required to comply with local laws of various countries and jurisdictions. The regulatory frameworks governing the collection, processing, storage, and use of business information, particularly information that includes personal data, are rapidly and continuously evolving across multiple jurisdictions, which may introduce conflicts between compliance obligations or other uncertainties. Any failure or perceived failure to comply with applicable privacy, security, or data protection laws, regulations and/or contractual obligations may adversely affect our business. Such evolving regulations and new laws globally (such as the California Consumer Privacy Act and the EU’s proposed ePrivacy Regulation) regarding data protection and privacy or other standards increasingly aimed at the use of personal information, such as for marketing purposes and the tracking of individuals’ online activities. We may have additional burdens imposed on us due to increasing compliance standards that could restrict the use and adoption of our products and services and make it more challenging and complex to meet customer expectations.”
They then state, “Many foreign countries and governmental bodies, including the EU, where we conduct business, have laws and regulations concerning the collection and use of personal data obtained from their residents or by businesses operating within their jurisdictions. These laws and regulations are often more wide-ranging and more restrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure, and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and Internet Protocol addresses. Further, European data protection laws prohibit the transfer of personal data from the European Economic Area, or EEA, and Switzerland to other countries, including the United States, unless adequate protections are provided for personal data in such recipient countries.”
The nature of the business that Qualtrics is in seems to be what Shoshana Zuboff calls “surveillance capitalism.” She coined the term in 2014. During an interview with The Harvard Gazette on March 4th, 2019, she defines surveillance capitalism as “the unilateral claiming of private human experience as free raw material for translation into behavioral data. These data are then computed and packaged as prediction products and sold into behavioral futures markets — business customers with a commercial interest in knowing what we will do now, soon, and later.”
Zuboff states that part of the initial problem was that “We rushed to the internet expecting empowerment, the democratization of knowledge, and help with real problems, but surveillance capitalism really was just too lucrative to resist.”
In a January 24th, 2020 article in The New York Times, Zuboff states, “These data flows empty into surveillance capitalists’ computational factories, called ‘artificial intelligence,’ where they are manufactured into behavioral predictions that are about us, but they are not for us. Instead, they are sold to business customers in a new kind of market that trades exclusively in human futures. Certainty in human affairs is the lifeblood of these markets, where surveillance capitalists compete on the quality of their predictions. This is a new form of trade that birthed some of the richest and most powerful companies in history.”
She then says, “In the competition for scope, surveillance capitalists want your home and what you say and do within its walls. They want your car, your medical conditions, and the shows you stream; your location as well as all the streets and buildings in your path and all the behavior of all the people in your city. They want your voice and what you eat and what you buy; your children’s play time and their schooling; your brain waves and your bloodstream. Nothing is exempt.”
In 2018, former co-CEO of the Research in Motion company, Jim Balsillie, warned about the economic and democratic risks posed by the foreign companies he said are motivated by “surveillance capitalism.”
Balsillie states, “This is going much faster than we understand it, and we are cascading towards a surveillance state and … it touches all aspects of our sovereign citizenship, well beyond the economy,”
“Surveillance capitalism is the most-powerful market force today, which is why the six most valuable companies are all data-driven” he says.
Balsillie states that the data-harvesting giants are driven by mass surveillance and follow business models that exploit gaps in Canada’s governance laws.
Matt Barter is a third-year student in the Humanities and Social Sciences Faculty at Memorial University of Newfoundland, majoring in Political Science with a minor in Sociology. He enjoys reading thought-provoking articles, walks in nature, and volunteering in the community.