Every service is paid for. When the user is not the payer, the revenue has to come from somewhere, and the shape of that somewhere determines what the product is motivated to do. A method for reading a business model off a service before you build anything on top of it.
Somebody is paying
Servers draw power continuously. Engineers are paid monthly. Bandwidth is metered, support is answered by people, and none of that stops because a user never sees a card transaction.
So a service that charges nothing has a payer who is not you. That is not cynicism, it is arithmetic, and everything interesting follows from working out who the payer is.
It is also a better predictor than the privacy policy. A policy describes what a service is permitted to do. The business model describes what it is under pressure to do, which is the thing you will actually experience.
Four ways a free thing gets paid for
Described by the incentive each creates rather than by whether it is admirable.
Advertising. The customer is the advertiser, and what they are buying is the ability to reach a particular person at a particular moment. The pressure is therefore towards knowing users precisely and holding their attention longer. Neither of those is a betrayal of the model; they are the model working.
Conversion. A free tier exists to sell a paid one. The pressure is towards making the free tier's limits felt — not enough to drive you off, enough to be noticed. Comparatively benign, because what you are being charged is irritation rather than exposure. The failure mode is a feature withheld for commercial reasons rather than technical ones.
Data as the product. The payer buys aggregates, inferences or access. The pressure is towards collecting more than the service needs to function, because the surplus is the inventory. This is the model where the visible product can be modest and the architecture behind it is not.
Subsidy. A grant, a foundation, a company treating something as infrastructure, or one person maintaining it because they want it to exist. The incentive is whatever the funder's is, and the characteristic risk is different in kind: not exploitation but disappearance. Subsidised things end when the subsidy does.
How to tell which one you are in
None of this requires inside knowledge.
Look at what the paid tier removes. Advertising, and you are in the first model. Limits, and you are in the second. Nothing on offer at all, for something visibly expensive to run, and you are in the third or fourth.
Look at permissions against function. A notes application that wants contacts and location is collecting beyond what it needs to work, and the surplus has a purpose even if the purpose is not stated.
Look at whether it works without an account. Anonymous use is difficult to monetise through identity, so services that permit it are usually not funded that way.
Look at the footer and the terms. Who owns it, and are affiliates, partners or successors mentioned? Successor clauses are worth particular attention: they describe what happens to everything you gave the service if it is bought, which is the most likely way the terms you agreed to stop being the terms you are under.
These are observations, not accusations. Every model here is legitimate.
The policy is not the answer
A privacy policy is written to be defensible rather than informative. It states the outer boundary of what is permitted, which is not the same as what is planned, and it can be amended with notice that essentially nobody reads.
A business model cannot be changed quietly. Revenue has to arrive from somewhere, and the somewhere leaves marks: the adverts appear, or the limits tighten, or the permissions grow. You can watch a business model. You can only read a policy.
When free is the right choice
Often. An advertising-funded service can be worth the trade outright — some of them do things nobody has found a way to charge for. A free tier you will never outgrow is simply a good deal, and taking it is not naivety. Subsidised software is frequently better than anything sold, precisely because nobody had to make it sell.
The argument is not that free is bad. It is that free is a price, and the time to work out which price is before you have built something on top of it that you cannot easily move.
Close
One question is usually enough. If this service needed to double its revenue next year, what would it have to do to me?
More advertising means you are paying with attention. Broader collection means you are paying with exposure. Tighter limits mean you are paying with convenience.
The answer is nearly always visible at sign-up. People are rarely surprised by it afterwards. They are disappointed, which is a different thing, and it is the part that could have been avoided.