Last year, when my refrigerator broke, the repair man replaced the computer that controls it. I realised that I had been thinking about the refrigerator backwards: it’s not a refrigerator with a computer, it’s a computer that keeps food cold. Just like that, everything is turning into a computer. Your phone is a computer that makes calls. Your car is a computer with wheels and an engine. Your oven is a computer that cooks lasagne. Your camera is a computer that takes pictures. Even our pets and livestock are now regularly chipped; my cat could be considered a computer that sleeps in the sun all day.

Computers are being embedded into all sort of products that connect to the internet. Nest, which Google purchased last year for more than $3bn, makes an internet-enabled thermostat. You can buy a smart air conditioner that learns your preferences and maximises energy efficiency. Fitness tracking devices, such as Fitbit or Jawbone, collect information about your movements, awake and asleep, and use that to analyse both your exercise and sleep habits. Many medical devices are starting to be internet-enabled, collecting and reporting a variety of biometric data. There are – or will be soon – devices that continually measure our vital signs, moods and brain activity.

This year, we have had two surprising stories of technology monitoring our activity: Samsung televisions that listen to conversations in the room and send them elsewhere for transcription – just in case someone is telling the TV to change the channel – and a Barbie that records your child’s questions and sells them to third parties.

All these computers produce data about what they’re doing and a lot of it is surveillance data. It’s the location of your phone, who you’re talking to and what you’re saying, what you’re searching and writing. It’s your heart rate. Corporations gather, store and analyse this data, often without our knowledge, and typically without our consent. Based on this data, they draw conclusions about us that we might disagree with or object to and that can affect our lives in profound ways. We may not like to admit it, but we are under mass surveillance.

Internet surveillance has evolved into a shockingly extensive, robust and profitable surveillance architecture. You are being tracked pretty much everywhere you go, by many companies and data brokers: 10 different companies on one website, a dozen on another. Facebook tracks you on every site with a Facebook Like button (whether you’re logged in to Facebook or not), while Google tracks you on every site that has a Google Plus g+ button or that uses Google Analytics to monitor its own web traffic.

Illustration by Tomi Umi

Most of the companies tracking you have names you’ve never heard of: Rubicon Project, AdSonar, Quantcast, Undertone, Traffic Marketplace. If you want to see who’s tracking you, install one of the browser plug-ins that let you monitor cookies. I guarantee you will be startled. One reporter discovered that 105 different companies tracked his internet use during one 36-hour period. In 2010, the seemingly innocuous site Dictionary.com installed more than 200 tracking cookies on your browser when you visited.

It’s no different on your smartphone. The apps there track you as well. They track your location and sometimes download your address book, calendar, bookmarks and search history. In 2013, the rapper Jay Z and Samsung teamed up to offer people who downloaded an app the ability to hear the new Jay Z album before release. The app required that users give Samsung consent to view all accounts on the phone, track its location and who the user was talking to. The Angry Birds game even collects location data when you’re not playing. It’s less Big Brother and more hundreds of tittletattle little brothers.

Most internet surveillance data is inherently anonymous, but companies are increasingly able to correlate the information gathered with other information that positively identifies us. You identify yourself willingly to lots of internet services. Often you do this with only a username, but increasingly usernames can be tied to your real name. Google tried to enforce this with its “real name policy”, which required users register for Google Plus with their legal names, until it rescinded that policy in 2014. Facebook pretty much demands real names. Whenever you use your credit card number to buy something, your real identity is tied to any cookies set by companies involved in that transaction. And any browsing you do on your smartphone is tied to you as the phone’s owner, although the website might not know it.

Surveillance is the business model of the internet for two primary reasons: people like free and people like convenient. The truth is, though, that people aren’t given much of a choice. It’s either surveillance or nothing and the surveillance is conveniently invisible so you don’t have to think about it. And it’s all possible because laws have failed to keep up with changes in business practices.

In general, privacy is something people tend to undervalue until they don’t have it anymore. Arguments such as “I have nothing to hide” are common, but aren’t really true. People living under constant surveillance quickly realise that privacy isn’t about having something to hide. It’s about individuality and personal autonomy. It’s about being able to decide who to reveal yourself to and under what terms. It’s about being free to be an individual and not having to constantly justify yourself to some overseer.

This tendency to undervalue privacy is exacerbated by companies deliberately making sure that privacy is not salient to users. When you log on to Facebook, you don’t think about how much personal information you’re revealing to the company; you chat with your friends. When you wake up in the morning, you don’t think about how you’re going to allow a bunch of companies to track you throughout the day; you just put your cell phone in your pocket.

But by accepting surveillance-based business models, we hand over even more power to the powerful. Google controls two-thirds of the US search market. Almost three-quarters of all internet users have Facebook accounts. Amazon controls about 30% of the US book market, and 70% of the ebook market. Comcast owns about 25% of the US broadband market. These companies have enormous power and control over us simply because of their economic position.

Our relationship with many of the internet companies we rely on is not a traditional company-customer relationship. That’s primarily because we’re not customers – we’re products those companies sell to their real customers. The companies are analogous to feudal lords and we are their vassals, peasants and – on a bad day – serfs. We are tenant farmers for these companies, working on their land by producing data that they in turn sell for profit.

Yes, it’s a metaphor, but it often really feels like that. Some people have pledged allegiance to Google. They have Gmail accounts, use Google Calendar and Google Docs and have Android phones. Others have pledged similar allegiance to Apple. They have iMacs, iPhones and iPads and let iCloud automatically synchronise and back up everything. Still others let Microsoft do it all. Some of us have pretty much abandoned email altogether for Facebook, Twitter and Instagram. We might prefer one feudal lord to the others. We might distribute our allegiance among several of these companies or studiously avoid a particular one we don’t like. Regardless, it’s becoming increasingly difficult to avoid pledging allegiance to at least one of them.

After all, customers get a lot of value out of having feudal lords. It’s simply easier and safer for someone else to hold our data and manage our devices. We like having someone else take care of our device configurations, software management, and data storage. We like it when we can access our email anywhere, from any computer, and we like it that Facebook just works, from any device, anywhere. We want our calendar entries to appear automatically on all our devices. Cloud storage sites do a better job of backing up our photos and files than we can manage by ourselves; Apple has done a great job of keeping malware out of its iPhone app store. We like automatic security updates and automatic backups; the companies do a better job of protecting our devices than we ever did. And we’re really happy when, after we lose a smartphone and buy a new one, all of our data reappears on it at the push of a button.

Fitness trackers might reveal more than their users want. Photograph: Katherine Anne Rose/The Observer

In this new world of computing, we’re no longer expected to manage our computing environment. We trust the feudal lords to treat us well and protect us from harm. It’s all a result of two technological trends.

The first is the rise of cloud computing. Basically, our data is no longer stored and processed on our computers. That all happens on servers owned by many different companies. The result is that we no longer control our data. These companies access our data—both content and metadata—for whatever profitable purpose they want. They have carefully crafted terms of service that dictate what sorts of data we can store on their systems, and can delete our entire accounts if they believe we violate them. And they turn our data over to law enforcement without our knowledge or consent. Potentially even worse, our data might be stored on computers in a country whose data protection laws are less than rigorous.

The second trend is the rise of user devices that are managed closely by their vendors: iPhones, iPads, Android phones, Kindles, ChromeBooks, and the like. The result is that we no longer control our computing environment. We have ceded control over what we can see, what we can do, and what we can use. Apple has rules about what software can be installed on iOS devices. You can load your own documents onto your Kindle, but Amazon is able to delete books it has already sold you. In 2009, Amazon automatically deleted some editions of George Orwell’s Nineteen Eighty-Four from users’ Kindles because of a copyright issue. I know, you just couldn’t write this stuff any more ironically.

It’s not just hardware. It’s getting hard to just buy a piece of software and use it on your computer in any way you like. Increasingly, vendors are moving to a subscription model—Adobe did that with Creative Cloud in 2013—that gives the vendor much more control. Microsoft hasn’t yet given up on a purchase model, but is making its MS Office subscription very attractive. And Office 365’s option of storing your documents in the Microsoft cloud is hard to turn off. Companies are pushing us in this direction because it makes us more profitable as customers or users.

Given current laws, trust is our only option. There are no consistent or predictable rules. We have no control over the actions of these companies. I can’t negotiate the rules regarding when Yahoo will access my photos on Flickr. I can’t demand greater security for my presentations on Prezi or my task list on Trello. I don’t even know the cloud providers to whom those companies have outsourced their infrastructures. If any of those companies delete my data, I don’t have the right to demand it back. If any of those companies give the government access to my data, I have no recourse. And if I decide to abandon those services, chances are I can’t easily take my data with me.

Political scientist Henry Farrell observed: “Much of our life is conducted online, which is another way of saying that much of our life is conducted under rules set by large private businesses, which are subject neither to much regulation nor much real market competition.”

The common defence is something like “business is business”. No one is forced to join Facebook or use Google search or buy an iPhone. Potential customers are choosing to enter into these quasi-feudal user relationships because of the enormous value they receive from them. If they don’t like it, goes the argument, they shouldn’t do it.

This advice is not practical. It’s not reasonable to tell people that if they don’t like their data being collected, they shouldn’t email, shop online, use Facebook or have a mobile phone. I can’t imagine students getting through school anymore without an internet search or Wikipedia, much less finding a job afterwards. These are the tools of modern life. They’re necessary to a career and a social life. Opting out just isn’t a viable choice for most of us, most of the time; it violates what have become very real norms of contemporary life.

Right now, choosing among providers is not a choice between surveillance or no surveillance, but only a choice of which feudal lords get to spy on you. This won’t change until we have laws to protect both us and our data from these sorts of relationships. Data is power and those that have our data have power over us. It’s time for government to step in and balance things out.

Adapted from Data and Goliath by Bruce Schneier, published by Norton Books. To order a copy for £17.99 go to bookshop.theguardian.com. Bruce Schneier is a security technologist and CTO of Resilient Systems Inc. He blogs at schneier.com, and tweets at @schneierblog