In a landmark move that challenges the status quo of the tech industry, Proton, the Swiss-based privacy-focused technology company, is marking its 10th anniversary by transitioning to a non-profit model. As of today, June 17th, 2024, Proton will establish the Proton Foundation, a groundbreaking step designed with a legally binding charter to protect and safeguard its mission of defending online privacy in an era dominated by data-hungry corporations. This bold initiative not only reaffirms Proton’s commitment to user privacy but also introduces a new paradigm of transparency and accountability in the tech ecosystem.
A Decade of Defending Digital Rights
Proton was birthed in 2014 by scientists who met at CERN, the European Organization for Nuclear Research, and has grown from a crowdfunded idea into a global privacy powerhouse. What started as Proton Mail, now the world’s largest encrypted email service, has blossomed into an ecosystem of privacy-centric products including Proton VPN, Proton Calendar, Proton Drive, and Proton Pass. These services have become the vanguard of a movement that puts user privacy first, protecting over 100 million accounts worldwide and employing over 500 people.
“The creation of the Proton Foundation is just a legal formality recognizing something that has always been true from its beginnings–Proton is not a primarily profit-driven organization,” says Andy Yen, Founder and CEO of Proton, adding, “When we launched our crowdfunding campaign exactly 10 years ago, we had a simple yet powerful vision: to remake the internet in a way that is private by default, and serves the interest of all of society, and not just the interest of a few Silicon Valley tech giants.”
What sets Proton apart is its absence of venture capital backing, having achieved its current scale primarily through organic growth. Despite its significant expansion, Proton has remained steadfast in its founding principles. The company maintains its financial autonomy, while its offerings remain open-source, accessible at no cost, and sustained by a devoted community.
Balancing Unprecedented Transparency and Accountability and For-Profit Efficiency
The transition to a non-profit model is a commitment to unprecedented levels of transparency and accountability. Switzerland, renowned for its robust regulatory environment, is home to a large number of foundations and offers an advanced legal framework for their operation.
“We chose to establish the Proton Foundation in Switzerland… because of the country’s stringent oversight of foundations,” Yen explains. “Both cantonal and federal foundation supervisory authorities will scrutinize our operations, ensuring that we adhere to the highest standards of governance.” This regulatory environment mandates that the Proton Foundation undergoes a comprehensive audit each year.
One of the most intricate aspects of Proton’s transition is managing the relationship between the for-profit Proton AG and the non-profit Proton Foundation. This dual structure is designed to harness the efficiency of a for-profit enterprise while enshrining the integrity of a non-profit mission.
“A Swiss corporation is ultimately controlled by its shareholders,” Yen notes. “By positioning the Foundation as Proton AG’s primary shareholder, we’ve given it wide latitude to influence the company’s direction. However, we’ve also been careful to maintain clear boundaries.”
To prevent potential conflicts of interest, especially concerning resource allocation and revenue sharing, Proton AG and the Proton Foundation will maintain separate assets. Proton AG will contribute 1% of its net revenues to fund the Foundation’s activities, creating a transparent financial relationship between the two entities.
While Proton is not profit-driven, Yen maintains it still must retain profitability as a core objective because a cornerstone of safeguarding Proton’s mission is sustainability through financial independence. He continues, “To bring about lasting change, Proton can’t be billionaire subsidized, donation subsidized, or Google subsidized, but instead it must have at its core a profitable and healthy business that can stand on its own. This change in governance does not signal changes to how our core businesses are run.”
Mission-Driven Leadership
Maintaining Proton AG’s financial sustainability and competitiveness while adhering to the Foundation’s mission-driven charter will be overseen by a board of trustees who are bound to the Foundation’s charter. The foundation’s board will include members of the Proton team, and will also feature two distinguished individuals: Carissa Veliz, who serves as Professor of Ethics and Philosophy at Oxford University, and Sir Tim Berners-Lee, renowned as the inventor of the World Wide Web and the Co-Founder and CTO of Inrupt.
“As a privacy scholar, I have been following the development of Proton since its birth in 2014,” said Carissa Veliz. “I see Proton as a beacon of hope. It has shown that tech can be designed to ensure privacy, and that privacy can be a competitive advantage.”
The Proton Foundation’s grant-giving activities represent another arena where transparency and accountability are paramount. Building on Proton’s existing practices, which have seen the distribution of over 2.7 million dollars to privacy-focused initiatives in the past five years including Privacy International, the Tor Project and the Freedom of the Press Foundation, the Proton Foundation aims to continue to fund and support services that can never be profitable such as initiatives to maintain a free and open internet.
“We don’t anticipate a significant change in our grant-giving model because it’s already deeply rooted in community involvement,” Yen shares. “Recipients will continue to be nominated annually by the Proton user community, and we will maintain our policy of full disclosure regarding fund recipients.”
What will change, however, is the scale and depth of oversight. “With the Foundation having dedicated resources, we’ll be able to conduct more thorough monitoring of how grant recipients utilize funds,” Yen explains. “This enhanced oversight will provide even more transparency to the Proton community.”
A New Chapter in the Privacy Revolution
As Proton celebrates a decade of championing online privacy, its transformation into a non-profit heralds a new beginning and challenges the notion that successful tech companies must be driven solely by profit.
The company is setting their sights on acquiring the next 100 million users and expect to reach this milestone in a shorter time horizon. This ambitious goal is buoyed by growing public awareness of privacy issues and an increasing demand for alternatives to data-exploitative services. Proton’s journey demonstrates that there is a viable path forward—one where technology serves the interests of users first.
“Privacy is not just a feature; it’s a fundamental right,” Yen asserts. “By enshrining our mission in a foundation, backed by Switzerland’s robust regulatory framework, we’re not just protecting our own future; we’re making a statement about the future of the internet itself.”
