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How do free VPNs make money?

Free VPN services generate revenue by collecting and selling user data. They track your online activities and browsing history to profit from this data.

A virtual private network (VPN) encrypts your internet traffic and masks your real IP address. This provides important benefits like anonymity, security, and bypassing censorship. But operating a global network of high-speed VPN servers is expensive.

Paid VPNs cover these costs through subscription plans. Free options rely on leveraging user data to earn money.

As the saying goes, if you‘re not paying for the product, you are the product.

The rising popularity of VPN services

VPN usage has surged in recent years. There are over 65 million monthly active VPN users worldwide as of 2022 according to estimates from

The past decade has seen VPN adoption grow by over 283% globally.

Driving this growth is the expanding desire for online privacy and bypassing restrictions. A 2020 survey by Vox Populi found 87% of Americans agree internet privacy is a right that requires protection.

Other factors fueling more VPN usage include:

  • Work/study from home during the pandemic
  • Rising cybercrime requiring secure connections
  • More travel requiring WiFi encryption
  • Censorship of platforms like social media
  • Blocking of streaming content libraries across regions

With internet freedom under threat, people view VPNs as essential for securing their digital lives.

Why "free" comes at a steep price

There have been many cautionary tales that reveal the true cost of free VPNs.

In 2019, free VPN provider Hotspot Shield faced allegations from the Center for Democracy and Technology that it was secretly siphoning and selling user data. This occurred despite promises of complete anonymity.

HolaVPN, which infamously leaked user bandwidth for botnet attacks, also settled charges for deceiving users about data logging policies.

Lesser known providers like VPNHub and Betternet may not generate headlines. But their free apps allow tracking cookies,behavioural ads and location access by default.

Free VPNs have aligned incentives to maximize data collection from their users. Even seemingly trivial details about your internet activity can be monetized.

Your interests, habits, location, relationships and more become commodities sold in a marketplace with little regulation or accountability.

How tracking and selling your data works

Free VPN services employ various methods to harvest user data:

  • Recording browsing history including sites/pages visited
  • Logging all connection data like device IP addresses
  • Embedding hidden tracking tools into apps
  • Analyzing search terms entered while connected
  • Following clicks and links to track online activity
  • Cross-referencing data to identify usage patterns
  • Packaging and selling aggregated user data to generate revenue

This data provides powerful insights into your online identity and interests. It can be used to build detailed behavioral profiles.

Information is often combined with other sources then resold to data brokers. From there it flows onward to advertisers, market researchers and other entities.

Few restrictions or consent requirements govern what VPN providers can do with your usage data.

Expert perspectives on risks of free VPNs

According to cybersecurity analysts, free VPN browser extensions and apps should be avoided when possible.

Privacy researcher Sean O‘Brien states:

"Despite marketing claims of privacy protection, free VPNs have repeatedly proven vulnerable to data exploitation or misuse. Consumers should be extremely wary of trusting any free VPN provider with their browsing activities."

Consumer advocacy groups also warn that free VPNs:

  • Permit third-party tracking for behavioral profiling
  • Install malware masquerading as "connectivity tools"
  • Expose metadata like DNS requests even if traffic is encrypted
  • Retain data for longer than advertised periods
  • Reserve rights to share user data with "trusted third parties"

Experts recommend exercising extreme caution with free VPN services.

What‘s driving consumers to VPNs? Streaming and gaming trends

VPNs have also gained popularity among consumers for accessing streaming and gaming content restricted by region.

Key drivers include:

  • Using VPNs to bypass geo-blocking and access overseas media catalogs
  • Multiplayer gamers selecting VPNs to optimize connections and reduce latency
  • Keeping personal information and accounts secure when streaming/gaming on public WiFi
  • Downloading region-locked content from torrent sites and piracy repositories

Up to 35% of VPN users in North America rely on them primarily for streaming movies, sports and TV shows according to a 2021 survey by LowestPing.

Gaming represents another major growth segment. Analysis by found gaming traffic accounted for over 15% of global VPN usage as of 2022.

It‘s clear that consumer demand for unrestricted streaming and gaming experiences fuels increasing VPN adoption.

Data privacy regulations and VPNs

How does data privacy legislation apply to VPN providers?

In the United States, the Federal Trade Commission (FTC) oversees rules against unfair or deceptive practices. But limited enforcement occurs around VPN data collection.

The European Union has more stringent regulations under the General Data Protection Regulation (GDPR). This requires consent to process private user data. However, loopholes exist for "legitimate interests".

Many other nations lack specific laws covering consumer data privacy. This enables VPN providers in those jurisdictions to harvest data without oversight.

More robust global standards would help rein in abuses by the free VPN industry. But progress remains slow.

Deep diving the tracking methods

To understand how free VPNs harvest data, let‘s examine some specific techniques:

Browsing history tracking

Free VPN apps record your browsing history including every website and page visited while connected. This reveals your interests to build a behavior profile.

Connection logging

Your device IP addresses, location, bandwidth usage and connection times are closely logged. This enables monitoring your internet activity.

Embedded hidden trackers

Cookies, web beacons and pixels are planted in apps to follow you across sites. They trace your activity outside the VPN tunnel.

Search term tracking

The search terms you enter into sites like Google are captured by the VPN app to determine your focus and preferences.

Ad click tracking

Your clicks on advertisements and publisher links get logged. This helps target future marketing campaigns.

Usage pattern analysis

All data gets aggregated and analyzed to identify relationships, habits and meaningful patterns about users.

Data resale to third parties

Profiles containing your browsing data are packaged then resold to generate revenue for the VPN provider.

Paid vs Free VPNs

FeaturePaid VPNFree VPN
FundingUser subscriptionsSelling user data
PrivacyZero/minimal trackingExtensive tracking
SpeedFast, premium bandwidthThrottled, slower speeds
Servers1000s of server locationsLimited to popular countries
EncryptionStrongest standards like AES-256Typically weaker encryption
Network sizeLarge capacity networksOverloaded with users
Logs PolicyUsually zero loggingConnection & activity logging
TrustworthinessHighly rated, auditedGreater risk of exploitation

Choosing a premium VPN

To protect your privacy, consider these tips when selecting a paid VPN:

  • Review no log policies to ensure strict enforcement
  • Check for independent audits and transparency reports
  • Ensure strong encryption protocols like OpenVPN or WireGuard
  • Verify they limit third party trackers and cookies
  • See if connections speeds remain fast during peak times
  • Consider bonus features like ad blocking and malware filters
  • Only install apps from official stores like Google Play and Apple App Store
  • Read through terms of service for any red flags
  • Check trusted review sites like RestorePrivacy and VPNMentor for recommendations

Taking time to research providers is essential to avoid "free" VPN scams.

Beyond VPNs – other privacy tools

For those seeking free alternatives to paid VPNs, options like Tor and privacy-focused browsers can help.

Tor – This open source software enables anonymous web browsing by routing traffic through a worldwide volunteer network. Downsides are slower speeds and some sites block Tor access.

DuckDuckGo – As a private search engine, DuckDuckGo avoids tracking users to show more relevant search results without filtering.

Browser extensions – Tools like Privacy Badger, HTTPS Everywhere and uBlock Origin enhance privacy while browsing the web.

But ultimately, a premium VPN remains the most convenient and secure way to protect your online activity.

The hidden costs of "free" VPNs

While tempting, free VPN browser extensions and mobile apps entail significant privacy tradeoffs. Intrusive tracking of your activities and selling of your data is central to their business model.

To reduce risks, consumers should:

  • Avoid free VPNs entirely when possible
  • Carefully analyze privacy policies before installing
  • Use trusted antivirus software to detect malware
  • Limit sharing of personal information while connected
  • Clear cookies/cache and restart device after disconnecting

Paid VPNs have far better incentives to deliver robust privacy protections, faster speeds and peace of mind. Don‘t let the price tag distract you. Your data has immense value.



Michael Reddy is a tech enthusiast, entertainment buff, and avid traveler who loves exploring Linux and sharing unique insights with readers.