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Data Digest № 005

Data Digest ¦ April 14th, 2019, 11:00 pm

Welcome to the fifth edition of the Datawallet Data Digest. Based on reader feedback, we will move the weekly roundup of news in the world of data to Monday. This week’s version is slightly more focused on a major headline this week, namely Publicis’ acquisition of Epsilon. Let’s get started

Publicis buys one of world’s largest data brokers for $4.4 billion

Publicis, one of the largest advertising companies in the world, announced that it was acquiring Epsilon, one of the world’s largest data brokers. Arthur Sadoun, CEO of Publicis, provided insights into the reason for the purchase, which was the company’s largest in its 93 years of existence:

“Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations. The only response is to deliver personalized experiences at scale. They have to transform to meet this new market imperative”

Sounds like an auspicious goal. But if you wipe away the grease of marketing speak, all you’re looking at is a giant void which is the lacking ethics underlying this deal. Next to maybe a handful of acquihires of key executives, the absolute lion’s share of this deal is all about acquiring Epsilon’s data set. The company boasts to have data on 250 million individuals in the US. The deal is intended to bolster Publicis’ ability to market to these people, none of which have volunteered to have their data used for targeting, let alone be sold. Publicis will take this newly acquired data set and feed it into their “PeopleCloud” which is used to create digital profiles on each person in their database in order to feed them advertising. The perils of this type of data sourcing practices by data brokers was well documented by Fast Company in their recent article on Data Brokerage:

“Apart from the dangers of merely collecting and storing all that data, detailed (and often erroneous) consumer profiles can lead to race or income-based discrimination, in a high-tech version of redlining.

What is especially cynical is that Publicis refers to the newly acquired data set as “first-party data” which is an outright mischaracterization. Epsilon’s data set is not one that users have created on the Epsilon platform, so by definition said data is not first-party data. However, it is exactly this newly acquired “first-party data” which Wall Street analysts see as an “overall positive.”

This simply substantiates the notion that data is the only differentiating factor in online advertising. Whoever has better data is able to better match advertisers’ requests and users’ data attributes resulting in higher advertising performance. The perfectly competitive nature of this market forces companies to devise ever-more invasive mechanisms to obtain this data, since without it they will be out-competed and their business dies.

While Publicis touts the Epsilon acquisition as “a one-time opportunity to seize, given the evolution of the industry and the implying transformation of marketing solutions” we at Datawallet see it as one of the most questionable developments for data ownership.

Publicis Dives Deeper Into Data With $4.4 Billion Epsilon Acquisition

The news marks the holding company’s largest-ever deal.
www.adweek.com

Facebook Kowtows to EU Commission

The European Commission has (seemingly) successfully pressured Facebook into changing its Terms & Conditions (T&Cs) to clearly state Facebook’s business model — namely, you are the product. Other than this important window-dressing, which is a truly refreshing change to honesty, the Commission reports Facebook has agreed to making some real changes:

  • amendments to Facebook’s limitation of liability with respect to data mishandled by third-parties

  • renouncing its power to unilaterally change it’s T&Cs;

  • actually delete data that’s been deleted by users within 90 days (unless needed for compliance with some governmental authority)

  • and clarify the right to appeal for users who’s content is removed.

Facebook agrees to clearer T&Cs in Europe – TechCrunch

Facebook has agreed to amend its terms and conditions under pressure from EU lawmakers. The new terms will make it plain that free access to its service is contingent on users’ data being used to profile them to target with ads, the European Commission said today. “The new terms detail …
techcrunch.com

There’s an Amazon Employee in your Alexa

Remember the always-on microphone Amazon persuaded you to put into the heart of your living room? Yes, the little device that allows you to order Tide Pods via voice command rather than subjecting yourself to the arduous work of going onto Amazon’s website and ordering it manually.

Turns out that Amazon is in fact listening to the audio that is recorded by exactly that little device. The recordings are transcribed, annotated, and fed back into the Alexa system. The goal of this exercise is to help it improve its understanding of human speech and its ability to accurately service voice commands. The process of humans lending a helping hand in making sense of data inputs, annotating them, and ingesting them into machine learning algorithms in order to train them is commonly known as a “Mechanical Turk” for which Amazon operates an entire marketplace called MTurk. This process by and in itself is nothing new and nothing particularly scary.

But even though most of the work that these Amazon workers do is mundane, such as parsing voice recordings for keywords such as “Taylor Swift” it is extremely scary that we need to trust Amazon to do the right thing with our data since they are as a matter of fact able to do with it whatever they please. What substantiates this fear is that Amazon in its marketing and privacy policy materials, doesn’t explicitly say humans are listening to recordings of some conversations picked up by Alexa.

With Amazon having an always-on microphone installed in the heart of our private homes and employing thousands of employees to listen to them, the company has the ability to abuse its power in any way it pleases.

This highlights that we need to get to a state where all the data you create on your Alexa, stays on your Alexa, and cannot be shared with any third party without the owner’s consent. Luckily, that’s what we’re working on at Datawallet.

Amazon Workers Are Listening to What You Tell Alexa

A global team reviews audio clips in an effort to help the voice-activated assistant respond to commands. 
www.bloomberg.com

Russia goes after Facebook and Twitter with hefty fines in the two figure range

Finally some good news in the world of data. Russia has taken a firm thought leader stance on data privacy regulation and cemented its reputation as a data ownership powerhouse by fining Facebook and Twitter a hefty sum of $70, due to non-compliance with a law that required the firms to store the personal data of Russian users on servers inside the country.

Russia fines Facebook, Twitter $70 for breaching data law

It's Russia's first step towards banning both social networks.
www.newshub.co.nz

That wraps another uneventful week in the world of data.

Until next week.

Serafin

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