The FCC's repeal of net neutrality has infuriated internet users across the country. But it's been great for business if you're VPN provider. According to the CEO of AnchorFree, a provider of a popular virtual private networking product, the company ...and more »
FCC Chairman Ajit PaiEric Gaillard/ReutersHotSpot Shield, one of the most popular VPNs in the country, saw more downloads in 2017 than ever before
The company's CEO says this is due to high-profile hacks and the FCC's crackdown on net neutrality.
The U.S. is now HotSpot Shield's largest market.
The FCC's repeal of net neutrality has infuriated internet users across the country. But it's been great for business if you're VPN provider.
According to the CEO of AnchorFree, a provider of a popular virtual private networking product, the company had its best year ever in 2017. HotSpot Shield, the company's VPN product, saw more than 100 million downloads in 2017 alone, bringing the company's total user base up to 600 million worldwide.
A VPN, or a virtual private network, is a service that masks internet traffic by rerouting it through a third-party server. It's a popular tool in places like China, allowing users to circumvent the government firewall that blocks certain sites.
David Gorodyansky, CEO of Anchor Free, told Business Insider he saw enormous — and unprecedented — spikes in new users immediately after the U.S. Federal Communications Commission rolled back net neutrality regulations.
There were similar spikes following Congress's vote to allow Internet Service Providers to sell user data and after the massive Equifax hack, Gorodyansky says.
These recent high-profile events have caused users to lose trust in both private companies and the government to safeguard their data, he says.
"Over the last 18 months, people are starting to realize that the government won't protect them and that Google and Facebook want to use their data as currency. People are realizing that they need to take this into their own hands," Gorodyansky says.
Before 2017, nearly 80% of HotSpot Shield's users were located outside of the U.S., mostly in countries where internet usage is restricted or moderated. All of that changed in the past year. Now, users in the U.S. outnumber users abroad, which Gorodyansky said was unexpected because VPNs typically appeal to international users.
"Americans are starting to realize that security and privacy are important," he said.
AnchorFree founder David Gorodyansky
Wkipedia/Gary GuseinovGorodyansky said he first noticed a big spike in U.S. users in March after Congress voted to allow internet service providers, like Comcast and AT&T, to sell web and app usage to third parties without getting permission from the user.
Later that year Equifax got hacked, exposing the personal information of millions, and Gorodyansky said even more users flocked to HotSpot Shield.
"HotSpot Shield doesnt protect Equifax from getting hacked, but Equifax raised public awareness and people were like 'I don't want my identity being stolen over public WiFi,'" he added.
The final surge in users happened in December after the Republican-controlled FCC rolled back net neutrality regulations, which mandated that ISPs treat all internet traffic equally. A VPN product prevents an internet service provider from seeing which websites a user is visiting, so there's less likelihood that the provider can block or slow down their connection to any given site.
"If the FCC doesn't want to regulate net neutrality. That's fine. We wish they did, but they don't want to, that's OK," Gorodyansky said. "We're basically going to solve this from a technology point of view."
HotSpot Shield has climbed the App Store rankings and is now the top grossing productivity app for iPhones, according to App Annie, an app market research company. In fact, half of the top 10 grossing iOS productivity apps are VPNs - perhaps a testament to how users are increasingly looking to security products.
"I think there's been this transition where people are starting to trust big corporations and the government less with their information," Gorodyansky said. "Whether it's Equifax or Target or Comcast, people don't want them owning their data."
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