Data is the new oil, but the truth is, it’s crude, unrefined and though available in plenty it is hard to find. Data is only valuable once it has been processed. Data powers the information economy in the same way that oil fuelled the industrial economy. Data promises a plethora of new uses – expansion of business in the required direction, diagnosis of diseases, traffic patterns, etc. Mega-trends such as big data, smart cities, internet of things (IoT) and rapid development of mobile technologies are driving the utilisation of personal data. Data will also lead to more customer satisfaction. One of the best examples is Uber mobile app. It works on data about cabs and passengers. Though Uber does not own a single cab they help in identification of the taxi for the passengers, and vice versa. Thus, this model of business is making businesses more efficient, saving time and money and efforts and improving customer satisfaction. Hence, it is not false to claim, “data is the new oil”.
Huge amounts of data are controlled by just 5 global mega-corporations – Apple, Amazon, Facebook, Microsoft and Google. These companies are bigger than most governments across the globe. A century back oil companies ruled the globe, but these companies no more rule the world. The “black gold” is no longer the world’s most valuable resource. Today, data is the most valuable resource. This has led many to suggest that the data-mining giants have a responsibility towards the society to ensure that their resources are put to work for the benefit of the humanity as a whole, rather than simply being allowed to enrich themselves.
But with the domination comes responsibility – and potential risk of misuse of such data. The recent Facebook-Cambridge Analytica controversy is a good example. This is why new privacy laws across the globe have come with more stringent claws to control the data flow. The European Union has come up with the general data protection regulation (GDPR) from May 25 to regulate the data flow in the region and across the globe for its data subjects. The Philippines have similarly come up with new regulations on privacy requirements. In India, the Supreme Court has already declared privacy a fundamental right. A panel, headed by Justice BN Sri Krishna, presented a draft on new privacy laws to the government in May.
As we use the platforms of these big five companies, these corporate giants keep on collecting personalised information about us. Google can see what people search for, Facebook what they share, Amazon what they buy. According to Data Metrics, Google accounts for around 81 per cent of the global searches. These is a huge chunk of data share that Google is privileged to have. As we keep using these five platforms, they keep collecting information on every aspect of our lives, our behaviour and our decision-making. All of these are valuable personalised data, which gives them tremendous power – and in turn generate more money for these already rich corporate giants.
These data help them in multiple ways. While on the one hand, this help them make their product better either in design or functionality as per the requirement of the user, on the other hand they become owner of these data, which they may end up monetising. For example, Facebook is sitting pretty on minute details and preferences of its over two billion users, which is rising every day.
These giants easily identify and spot trends, and make their moves gaining an early advantage over competition. Facebook’s $22 billion purchase of WhatsApp with fewer than 60 employees in 2014 is a good example of that. By providing barriers to entry and early warning systems, data can stifle competition. These giant companies have also found out a way to work around the data privacy laws like GDPR by selling the anonymised aggregate data to other companies hungry for such information pack. These anonymised aggregate data do not attract GDPR and other privacy regulations because this information is not personal identifiers. These companies either bully their competitors and rivals, and/or sell these data to others.
Google and Facebook literally control about 88 per cent of all new internet advertising, while the rest of the internet economy is starved of resources. These kinds of circumstances give rise to monopolistic conditions, creating a situation for stepping in of anti-trust regulators. But it is never easy to regulate the data economy. Thus, these giant corporates become richer and more powerful and work as global, borderless corporations, surpassing the size and power of many governments across the globe.
It is important that these owners of data must act in a responsible manner and do something for the society at large. Ultimately, the people should be benefited by these data. It can be in any form either eradication of poverty, disease or any other scientific development. Hence, it is fair to say data is the new oil, and hopefully benefit people as the discovery of oil helped people.
(The writer is the global head of legal, and chief data protection officer at Ramco Systems)