What Happens to Your Data When a Free Tool Shuts Down?

From PDF editors and file converters to note-taking apps and image editors, so many people rely on free online tools. But many users also wonder: what happens to my data when a free tool I’ve been using shuts down?

It’s not always clear, and that uncertainty contributes to the eye-popping statistic that 81% of Americans feel the risks of corporate data collection outweigh any benefits.

After all, offering a service for free can be difficult to sustain from a business standpoint, and some platforms eventually shut down due to financial or strategic challenges.

Here’s what you should know about how free tools manage user data, and what typically happens to users’ data when a free tool is discontinued.

Free Tools Still Depend on Your Data

As the 2020 film The Social Dilemma puts it, “If you’re not paying for the product, you are the product.”

Even when a service is free, it’s rarely operating without trying to gain something in return. For most free tools, that’s user data, including information such as account details, uploaded files, and usage patterns. 

This information can be used to improve the service (especially for their paid tiers), support advertising models, or develop new features. 

Orderly Shutdown: The Best-Case Scenario

In some cases, companies handle shutdowns responsibly. Not only do they announce the closure in advance and give users time to export their data, migrate to alternatives, or delete their accounts, but they may also delete user data after a certain period, depending on their policies.

A well-known example is Google Reader, an RSS service that shut down in 2013. Google announced the service’s shutdown on March 13 and gave users until July 1 to export their data. This gave users several months to move their subscriptions and transition to other platforms.

Users were given a fair chance to act, though only if they stayed informed about the tools they used.

When Things Go Wrong: Data Loss and Lingering Copies

However, not all shutdowns are as user-friendly. Some aren’t even planned at all, with services suddenly disappearing due to financial problems. This can lead to limited access to your files or even outright data loss. 

But even in more controlled shutdowns, it’s still important to recognize that data deletion isn’t always immediate or absolute. Companies might say that data will be deleted, but not be transparent about whether or not that data persists temporarily in backups before being fully erased.

This doubles the risk: your data becomes inaccessible while still existing in backups (at least for a period of time).

Who Owns Your Data After Shutdown?

But during this period, who actually controls your data? 

In most cases, it depends on the company’s terms and what happened to the business. In some cases, user data may be deleted entirely. In other cases, especially if the company shuts down due to bankruptcy or acquisition, user data may be treated as a business asset that can be sold or transferred to another entity.

RadioShack, for example, filed for bankruptcy in 2015 and aimed to sell the data of 67 million customers despite its privacy policy stating that customer information would never be shared with third parties. This data included customer names, mailing addresses, email addresses, phone numbers, and 21 other types of information. 

Despite objections from the FTC and 38 state attorneys general, a court still approved the sale, albeit with limitations. RadioShack agreed that email addresses were the only contact information that would be sold, and only from customers who were active two years before the bankruptcy filing.

How to Protect Yourself

Ultimately, the main issue is that you’re putting your data in the hands of that company and its policies. If the service shuts down, you lose most, if not all, control over your data. You can only hope that, like Google Reader in 2013, the company gives users advance notice and time to export their data.

Of course, you don’t need to avoid free tools altogether. However, it’s wise to be more careful when using them. A few practical habits can help:

• Avoid uploading sensitive files to tools, especially if they’re confidential, highly personal, or work-related. Be extra careful on public Wi-Fi, where your data is easier to intercept, and where you ought to use online privacy solutions.
• Keep backups of your files on other devices or services, so you still have access if something goes wrong. Never store important files in just one tool. 
• Check export options early, before you start using any tool regularly.
• Review privacy policies and look for how the tool stores, uses, and shares your data, especially whether it keeps your files after you’re done or allows data to be transferred to other companies.

Free tools are unmatched for convenience. But always use them with the awareness that they can shut down at any time and take away your ability to control your data. Your data could be lost, transferred, or temporarily retained in ways you didn’t anticipate.