Privacy and Ownership Issues Remain Hot Big Data Topics

Stephen DeAngelis

November 25, 2019

According to The Economist, “The world’s most valuable resource is no longer oil, but data. … Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace — more raw material for the data distilleries.”[1] Yossi Sheffi (@YossiSheffi), the Elisha Gray II Professor of Engineering Systems at MIT, agrees with that assessment. He explains, “The well-worn adage that a company’s most valuable asset is its people needs an update. Today, it’s not people but data that tops the asset value list for companies. And it will become increasingly difficult to compete with large enterprises that are amassing huge volumes of this asset.”[2] In today’s business environment, data is often required to be provided by people desiring to receive a service from companies and people are beginning to question if it’s a fair exchange.

Personal data is the most valuable data

The data Sheffi views as a company’s most important asset is personal data. In another article, journalists from The Economist remind us, however, that personal data is valuable because it’s linked to a real person. They assert, “It is tangible human beings, not abstract ‘data’, that power the online economy.”[3] They add, “That data are valuable is increasingly well-understood by individuals, too, not least because personal information is so often hacked, leaked or stolen. … The first step towards ensuring the fairness of the new information age is to understand that it is not data that are valuable. It is you.” The point is, if companies want to continue gleaning value from data, they need to be responsible to the people from whom the data is collected.

Victor DeMarines, Vice President of Products & Strategy at Revulytics, writes, “Data is the heartbeat that determines the success or failure of software. It pinpoints patterns of usage and enables developers to fine-tune or make wholesale changes to a product. But data isn’t a restriction-free asset. With GDPR and other data privacy and protection regulations tightly governing the use of customer information, software vendors need to assume full responsibility for how they manage and store information.”[4] According to Bob Violino (@BobViolino), people have good reasons to worry about how their personal data is being protected. He reports a study by the Internet Society’s Online Trust Alliance, concluded, “A majority of organizations do not comply with current international data privacy regulations and are not prepared for new U.S. regulations rolling out in 2020.”[5] Another study, this one published in the United Kingdom, concluded, “While people generally feel positive about the benefits brought by the internet and being more connected, they want to know why, how, when and for what purpose data about themselves is held and shared.”[6] Sarah Gordon (@sarahgor) writes, “We have little idea what personal data companies own about us, what they do with it, or where they store it. This does not just raise issues about privacy, but also security. It is also profoundly disempowering.”[7] She then raises a new issue. She writes, “Most people believe they should have as much control as possible of their intellectual property or their physical selves. So why should someone else own our data?”

The question of ownership

The Wall Street Journal observes, “People around the world are confused and concerned about what companies do with the data they collect from their interactions with consumers. … One idea is to give people greater control over their data by granting them ownership of it and the right to sell it or restrict its use as they see fit. Proponents of this approach say it would allow consumers to protect their privacy, reward them for use of their data and result in a broader distribution of data that would spark competition and innovation. Opponents worry that it would entice people to give up more of their privacy without adequate reward and would stymie the flow of information.”[8] They asked two academics for their opinions on the matter of data ownership. Christopher Tonetti (@ChrisTonetti), an associate professor of economics at Stanford Graduate School of Business, favors consumers owning their data. He writes, “Data isn’t like other commodities in one fundamental way — it doesn’t diminish with use. And that difference is the key to why consumers should own the data that’s created when they interact with companies, and have the right to sell it. … If consumers could sell their data, they would have the ability to share the data from any transaction with multiple organizations—to their own benefit and that of society as a whole. Ownership also would give them control of their privacy. Owning data grants the right to decide how it is used. Consumers could sell or even donate their data to organizations of their choosing, withholding data they wish to keep private and spurning organizations they don’t trust. That’s obviously preferable to the current situation, where firms tend to own the data from transactions and can use it in ways consumers may not want and without the consumers’ knowledge.”

Taking the opposing side is Cameron F. Kerry, the Ann R. and Andrew H. Tisch Distinguished Visiting Fellow at the Brookings Institution. He writes, “After a wave of privacy scandals and data breaches, American consumers are right to want change. For consumers who want more control over how their personal data is used and shared, the notion of owning their data and being able to sell it or withhold it sounds appealing. But owning data will do little to help consumers’ privacy — and may well leave them worse off. Meanwhile, consumer property rights would create enormous friction for valid business uses of personal information and for the free flow of information we value as a society.” He adds, “In our current system, consumers reflexively click away rights to data in exchange for convenience, free services, connection, endorphins or other motivations. In a market where consumers could sell or license personal information they generate from web browsing, ride-sharing apps and other digital activities, is there any reason to expect that they would be less motivated to share their information? On the contrary, some small amount of money may induce people to give up even more rights than they do today, with little benefit in return.”

Concluding thoughts

I’m not sanguine consumers will gain ownership of their data any time soon. Even if they do, the financial rewards they could expect to gain would be extremely small. I agree with Kerry that consumers are likely to continue to exchange their personal data for convenience and “free” services. On the other hand, many experts now agree regulations are needed to better protect consumers’ personal information being held by companies and limit what a company can do with personal information they receive. Steve LeVine (@stevelevine), a Senior Fellow at The Atlantic Council, concludes, “No one thinks it will be easy to devise the compensatory system. Nor, of course, that Big Tech will easily surrender to a new data marketplace.”[9]

Footnotes
[1] Staff, “The world’s most valuable resource is no longer oil, but data,” The Economist, 6 May 2017.
[2] Yossi Sheffi, “What is a Company’s Most Valuable Asset? Not People,” Supply Chain @ MIT, 20 December 2018.
[3] Staff, “How to think about data in 2019,” The Economist, 22 December 2018.
[4] Victor DeMarines, “Data Ownership: Balancing Privacy and Protection with Legitimate Business Goals,” Dataversity, 16 October 2019.
[5] Bob Violino, “Most organizations fall short of global data privacy requirements,” Information Management, 8 October 2019.
[6] Staff, “People want to know the ‘why, how, when and what’ of data use,” SmartCitiesWorld, 18 September 2019.
[7] Sarah Gordon, “Our personal data are precious — we must take back control,” Financial Times, 19 July 2017.
[8] Staff, “Should Consumers Be Able to Sell Their Own Personal Data?The Wall Street Journal, 13 October 2019.
[9] Steve LeVine, “A growing idea: Big Tech should pay people for their data,” Axios, 8 July 2018.