Solving the Mystery of Why Companies Collect Data?

Why companies collect data

Table of Contents

Why companies collect data? Or what companies do with our data? And Why do companies buy and sell user data? 

Before getting started with these, let’s understand what data is and what data companies collect?

Today, data is the most critical resource for any company, being used for their strategy-making process to achieve prosperity.

And it is building a great future for Big Data Analytics.

Key Takeaways

  • Any information that can be used and serve as an informative resource is Data.
  • Companies can collect information like your name, age, contact, address, income details and family relations.
  • Companies can or use to sell these data for their profits.
  • Google, Facebook, Instagram, Uber Eats and LinkedIn are the top rankers in selling your data to third parties.
  • Search Engines and Social Media are the easiest ways to collect data.

What is Data?: An Introduction

Any information, personal or professional, or anything that can tell something about you and can serve as an informative resource can be termed Data.

Have you ever thought that the name, contact, gender, location, or email you enter in any website or application can be used by a company to target its audience?

It’s true. Companies do that. 

Also, the ads displayed to you on your smartphone or laptop are because of the data collected about you from the dataset.

So, now that you have understood what data is,  let’s move to what kind of data do companies collect?

What data companies collect?

It is estimated that the highest number of data ever created and collected was in 2017. 

Are you familiar with the term Data Brokers?

These are companies like Google or Facebook that collect all kinds of information, including your name, age, gender, address, place of work, emails, hobbies, income details, educational details, contact, family, friends, or anything you do on the internet. 

Also, these apps or companies sell user data to third parties. According to pCloud, 52% of apps share your data with third parties

why companies collect data?

After collecting the data, it is used to build up a profile that can be used to display you targeted products and services.

Have you ever wondered why a specific ad was displayed to you or why you get a specific notification from an App at a particular time daily?

All this is based on the data which is collected from you.

For example, you are scrolling through your Instagram. You see a picture of sports shoes posted by some shoe company or retailer. You click on that picture and browser that particular handle or hashtag. 

And immediately, you will get a display ad for purchasing shoes or notification from apps like Amazon or Flipkart showing a shoe available at a discount. 

This is how data provides so much information about you without you noticing anyone. 

To better understand this, I suggest you watch a movie, The Social Dilemma, available on Netflix.

Why do companies buy and sell user data?

Today, collecting, buying and selling user data has become a big business. And data is considered to be the new oil.

Google is the most used search engine globally and provides other services like Gmail, Google Maps, Google Calendar, Play Store, and so on, everything for free.

So, how do you think it has become the most prominent company globally when offering so many free services.

First of all, Google isn’t providing these services for free. Instead, it is getting a lot of information about you for all the services you use, which maybe you don’t even know about yourself, and for free. 

Then Google uses or sells these data to other companies to make a profit.

Is Google selling my data?

YES, and not only Google, Facebook, Uber, eBay, LinkedIn and the list keeps on going for the companies collecting data and make a profit from it.

How do companies collect data?

There are many ways through which companies collect data from you, for years, and you never noticed it.

Here are the 3 ways in which companies collect your personal data:

1. Apps ask for permission

Smartphones have made it easy to collect user data. 

Whenever you download an App on your smartphone, it asks for permission to basic phone functions such as Contacts, Camera, Calendar, Location, Microphone, and File Manager. 

But why does a gaming app or an entertainment app needs access to contacts or location? To collect data. 

2. Search Engine

Search Engines like Google record your web and app activities, location history, and youtube history to collect data.

Also, when you enter your Gmail in any app, it requires access, which is also used to collect data from it.

3. Social Media

Remember the WhatsApp controversy about the privacy of its user?

Many Social Media like Instagram, WhatsApp, Facebook have access to your information without you knowing about it.

Also, these apps can record your communications, which can be very dangerous.

3. Cookies and Web Beacon

Cookies are a set of codes that are dropped on a user’s browser, which records everything you do using the browser.

Web Beacon is a small transparent graphic image placed on a website or in an email to monitor and record the user’s behaviour on the platforms.

How do you protect data?

Now that you are familiar with how your data is collected and how it is used.

Let’s give you some tips on how to protect your data:

  • Always make sure to deny access to an app for unnecessary permissions to phone functions.
  • To ensure that Google can’t record or access your data, you can go to account settings and pause or remove access.
  • Always delete your history from the browser and clear all the cookies saved on it.
  • If you are not using the camera or microphone on your laptop, keep it closed.
  • Try to never back up your chats on chatting apps.
  • Use a VPN while using the browser.
  • Don’t fill in the information on any form or website which are not being marked mandatory.


So, after reading all the above sub-topics, one thing is obvious. Data is the most crucial resource in today’s world. And one should know how not to make your information the crucial resource for the companies.

Being data so crucial, Know the difference between the two most important job roles in the data industry.

Frequently Asked Questions

Is Google selling consumer data?

Yes, Google is the top company to record, use and sell consumer data.

How to keep your information safe while using a browser?

Always use VPN while using a browser and try to keep your history and cookies clear.

How one can protect their data?

There are few points mentioned above for the same.

What companies do with consumer data?

Companies collect, analyse, draw insights and make a strategy to target their audience.

What are the top companies that sell data to third parties?

There is a big picture in the blog that shows top 50 companies sell data to third parties.

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