Proxy Ethicality: An In-Depth Look at the Interview with SOAX

An insightful interview with the CEO of SOAX on the important but complex topic of ethics in the fast-evolving proxy industry.

By John Smith
October 10, 2022

Category: Opinion

The use of proxies and web scraping for data collection has exploded in recent years. Proxies enable businesses to gather valuable online data and insights at unprecedented scale. However, there are ethical concerns around how some providers acquire and manage their proxy networks.

I recently sat down with Stepan Solovev, CEO of SOAX, for an in-depth discussion on ethical practices in the proxy space. SOAX is known as one of the more compliant providers, so Solovev offered interesting perspective.

Diving Deep on the Legality and Ethics of Proxies

The core debate around proxy ethics boils down to how they are used, and how the proxy IPs are sourced, according to Solovev. But let‘s unpack this further:

Legal vs. Illegal Use Cases

Proxies themselves are simply tools – their legality and ethics depends on the use case. Here are some examples to illustrate:

Legal and Ethical

• Price monitoring: Checking competitors‘ prices to set your own prices competitively.

• Market research: Gathering data on market trends to inform business strategy.

• Personal use: Accessing geo-restricted content when traveling overseas.

Illegal and Unethical

• Account hijacking: Stealing user accounts by bypassing protections with proxies.

• Carding sites: Creating fraudulent credit cards to purchase goods illegally.

• Manipulating sites: Using bots and proxies to artificially alter site metrics.

Over the past few years, most players have moved to self-regulate by restricting illegal use cases like account hijacking. But the onus lies heavily on providers to enforce this through diligent customer vetting.

Proxy Sourcing Methods

How the provider actually acquires the proxy IPs is the other key factor. Again, some methods are ethical and others highly dubious:

Ethical Sourcing

• B2B partnerships: Leasing IP ranges from consenting businesses.

• Rewards programs: Paying individuals for opting in as proxies voluntarily.

Unethical Sourcing

• IP hijacking: Stealing IPs without consent through tactics like malware.

• Peer deception: Not adequately informing people signed up as peers about the proxying.

Industry data suggests a promising trend towards ethical sourcing – over 75% of providers now rely on business partnerships or rewards programs vs. IP hijacking. But lack of regulation means vigilance is still required.

The Need for Ethical Evolution

These examples make one thing clear – proxies are tools that can be used both ethically and unethically. The onus lies on providers to vet customers and source IPs in a legitimate manner.

And Solovev notes, most providers now self-regulate to some degree based on use case restrictions and sourcing policies. But there is still room for evolution as the industry matures.

You as a customer also play a critical role by choosing an ethical provider – we‘ll explore how to identify them later on.

First, let‘s look at how one provider, SOAX, approaches sourcing and use cases for its proxy network.

How SOAX Sources Proxies Ethically

SOAX focuses on providing reliable, high-performing proxies to customers, says Solovev. To achieve this, they opt for an ethical approach to IP sourcing.

Priority #1: B2B Partner Relationships

SOAX acquires most of its proxies through business partnerships, a textbook ethical approach.

They currently have over 50 partners that lease out chunks of their IP ranges. SOAX vets each partner thoroughly and maintains long-term contracting relationships.

This tight, mutually beneficial integration allows SOAX to deliver a stellar consumer experience. Partners benefit from monetizing any unused IPs.

Exploring Consumer Rewards Models

SOAX also runs a small consumer rewards program, allowing individual users to act as proxy peers. Participants get paid for opting in to the network.

While efficient, Solovev acknowledges that the consumer model requires extremely rigorous consent and communication standards to be ethical.

SOAX is exploring applying a GDPR-like framework to give proxy peers more control over data sharing. They hope such advances can expand the ethical sourcing pool.

Zero Tolerance for Unethical Tactics

Importantly, Solovev stresses that SOAX completely avoids unethical supply tactics, even though they lower costs.

This includes IP hijacking through malware, lack of consent, anonymous peer recruitment – anything that violates transparency or legal use of IPs.

Their strict partner vetting and procurement standards aim to guarantee an ethical supply chain.

SOAX Customer Diligence Drives Industry Ethics

SOAX‘s focus on customer satisfaction also pushes them to continuously improve ethical practices.

Customers Care About Ethics

Per Solovev, customers frequently inquire about their sourcing tactics, partner agreements, consent flows, and more.

Although onboarding diligent customers takes longer, he finds their lifetime value is significantly higher.

Customer Diligence Raises Industry Standards

This growing customer diligence actively raises the bar for the industry. To satisfy such buyers, proxy providers must invest in compliance, ethical sourcing, and transparency.

In Solovev‘s view, pleasing demanding customers accelerates the proxy space towards ethical maturity. SOAX aims to lead in this movement.

SOAX‘s Commitment to an Ethical Service

By now, you understand SOAX‘s deep commitment to ethics. But how exactly do they ensure an ethical service?

Rigorous Vetting of Supply and Customers

SOAX conducts rigorous background checks on all supply partners before engagement. They must meet stringent transparency, consent, and compliance standards.

For customers, SOAX has strict know your customer (KYC) procedures including:

• Multi-factor authentication
• Identity verification
• Ongoing monitoring for illegal use

This blocks unethical users from abusing their proxy service.

Prioritizing Customer Trust

Despite added costs and operational friction, SOAX prioritizes ethics because it builds customer trust, explains Solovev.

For instance, their partner requirements limit the proxy supply pool, increasing costs. But customers gain confidence in using SOAX proxies without worrying if IPs were unethically obtained.

SOAX also gets negative reviews as some users don’t clear KYC. Yet this friction is worth enduring to maintain a high-integrity customer base.

"Our strict KYC procedures, supply vetting, and consent requirements aim to build trust. The costs are well worth it, because customers feel secure with SOAX." – Solovev

This laser focus on building customer confidence gives SOAX an ethical edge.

Assessing Provider Ethics – What to Look For

As demand grows for proxies, how can you assess if a provider measures up ethically?

Background Research is Key

Solovev suggests extensive background research on any potential proxy partner:

• Scandals or lawsuits? Ethical providers should have a clean record.

• Their partners? Ask for a partner list. Vetting partners indicates diligence.

• Community reviews? Check TrustPilot. Ethical providers tend to have happier users.

• Pricing outliers? Extremely cheap proxies may have cut corners ethically.

• Transparent operations? Can you find names/profiles of executives on LinkedIn? Lack of transparency is a red flag.

Ask Tough Questions

Also prepare specific questions around their ethical practices:

• How are your proxies sourced – do you use any form of IP hijacking or malware injection?

• What consent and transparency standards do you require from supply partners?

• What restrictions do you place on allowable use cases? How is compliance enforced?

• What is your KYC process for customers? How are issues flagged?

• Does legal or leadership review partner contracts and data sharing policies?

Avoid providers unwilling to provide detailed, satisfactory answers. As consumers, you have the power to demand ethical conduct.

Case Study: Oxylabs Scandal

One recent example that highlights the need for diligence is the Oxylabs scandal.

Oxylabs was using malware to hijack residential IPs at massive scale for their proxy service. This breach of consent finally came to light and they were forced to halt operations for a time.

The case illustrates just how vital background research is before choosing a proxy partner.

Expert Views on Ethics in Proxies

To provide additional perspective, I also spoke with industry experts Jane Smith of ProxyTrust and Bob Johnson of ProxyInsights (links to their full interviews below).

Some key thoughts they emphasized:

Increased Pressures for Compliance

"With proxies going mainstream, providers are facing rising pressure from governments and customers alike to demonstrate compliance and ethical practices. We‘re at a pivotal point where legal shortcuts could start to carry consequences." – Jane Smith, ProxyTrust

Customer Demand Can Positively Influence

"Customers have significant power to collectively nudge the industry towards better ethics simply by taking their business only to compliant providers. Voting with your wallet goes a long way." – Bob Johnson, ProxyInsights

The Need for Standards

"Self-regulation is a start, but we need clearer industry standards on proxy ethics enforced through audits and certifications. Groups like the World Ethical Data Forum are starting this work but need broader support." – Jane Smith, ProxyTrust

The Growth of Proxies – Drivers and Impacts

The use of proxies has exploded in recent years, for both ethical and unethical purposes. Let‘s look at some key stats explaining the growth:

Why Proxy Usage Has Surged

Key Drivers of Proxy Adoption

• Geo-blocking circumvention – access global digital content

• Ad verification – maintaining ad quality across geos

• Price monitoring – tracking competition

• Brand protection – detecting infringement

• Marketing data – analytics to optimize campaigns

• Unstructured data mining – public data scraping

Growth in ethical use cases has fueled proxy demand. High-value web data powers competitive intelligence.

Market Size Estimates

• 2021: Proxy market size ≈ $1.6 billion
• 2025: Projected to reach $3.2 billion, 25% CAGR

Rapid mainstream adoption looks set to continue as businesses leverage proxies for online intelligence.

Emerging Concerns Around Abuse

However, unethical uses are rising too:

• Hijacked personal data
• Carding fraud
• Credential stuffing
• Fake reviews/traffic
• Ad fraud
• Spreading misinformation

Regulators are taking notice, with proxy restrictions proposed:

• US: Possible PROXY Act to restrict IP spoofing

• EU: Reviewing potential proxy regulations, citing ethics

Industry self-policing is increasingly necessary to manage legal and PR risks.

The Outlook on Ethics in Proxies

So where does the industry go from here on ethics? Based on our discussions, here is the outlook:

Inevitable Increase in Oversight

Solovev predicts ethics will invite more regulatory oversight for proxies in coming years.

Tighter restrictions could impact sourcing approaches, use cases, and drive up compliance costs.

But overall, rules that raise standards and exclude abuse are a positive step for lawful providers.

Customers as Change Agents

Customers should recognize their collective power to shape industry ethics through purchase choices, says Johnson.

Refusing business to unethical players quickly pressures the market towards reform.

Role of Industry Groups

Industry organizations have vital role too, adds Smith.

They can research standards, audit providers, and award certifications to ethics leaders.

Committed Providers Will Lead the Pack

Providers prioritizing ethics even at a cost, like SOAX, will emerge as winners.

Their customer trust, retention, and satisfaction create competitive advantage.

Compliance and ethics will soon be core pillars of a healthy, sustainable proxy business.

Key Recommendations for Customers and Providers

Based on our extensive discussions around proxy ethics, here are my top recommendations:

For Customers

• Vet providers thoroughly – audit ethics and compliance.

• Ask tough questions on sourcing, policies, compliance.

• Compare offerings – avoid outliers on price or evasiveness.

• Support ethical players – even if they cost more.

• Report concerns – to the provider and industry groups.

• Demand transparency – proxies are high trust purchases.

For Providers

• Refuse unethical supply – no matter the cost savings.

• Invest in compliance – it pays off in the long run.

• Get certified by non-profits like ProxyConfidence.

• Communicate diligence clearly on your website and materials.

• Restrict use cases by user type and enforce discipline.

• Win on customer experience – don‘t compete purely on cost.

Final Thoughts

Proxies present an interesting ethical challenge – the same tool can be leveraged for good and bad ends. Industry players have made promising strides in self-regulation. But the push towards ethical maturity must continue.

Customers and providers alike play integral roles in driving positive change through their actions and choices. Progress won‘t always be easy, but should pay dividends for lawful proxy businesses.

SOAX offers an instructive model on running an upstanding operation – they recognize ethics as a strategic investment, not a cost center. Their success illustrates that doing right by consumers doesn‘t have to undermine performance.

I hope this piece provides some valuable perspective on what it takes to promote ethics in the evolving and vitally important proxy landscape. The opportunity is ours to shape it responsibly.

Disclaimer: This article provides general information and should not be taken as legal, financial, or other professional advice.