Data Digest № 007
Welcome to the Bond edition of the Datawallet Data Digest, aka publication number 007. We did not witness a shortage of noteworthy events in the realm of data, so let’s get right to it.
A Closer Look At Data Dividends And Taxes
Given the recent rise in public data breaches, data leaks, and data mishandling, policymakers are starting to take a closer look at cybersecurity and privacy; from punitive approaches such as GDPR, to the idea of a citizen’s data dividend proposed by California’s Governor, Gavin Newsom. One of the main issues taking precedence is that there is no universally accepted approach to valuing data, and the lack of cooperation on these issues further expands trans-Atlantic trade and integration rifts (check out the data “adequacy” agreement between the EU and Japan mentioned in last week’s Data Digest).
Data is often compared to oil, but there are multiple reasons why this comparison falls short (as I wrote about in the data = oil fallacy in 2017). Equifax lost 150 million personally identifiable records in 2017, and while spilled oil can be reclaimed (albeit at terrible costs), once data leaks, it’s out there for good. Data breaches are often assessed the same way the cyber insurance market is assessed, by assigning a remediation cost to each data record, including consumer notification, legal fees and more. These fees depend on the data, but often only range between $50 and $200 — would you fight a legal battle with Equifax for $200 bucks? Rather unlikely.
“Data is about as likely a digital twin of oil, as a toaster is a mechanical twin of a quantum computer.” — Dante Disparte
For data protection initiatives to be effective and correlated to the value derived by businesses we need transparent, fair, and universally accepted approach to data valuation; one that accounts for i.a. the utility of data to current and future products, the various types of risk exposures of handling data, and the degree of PII in the dataset, just to name a few. This is a highly complex issue but requires attention and a concerted, international effort. The lack of a common understanding of data’s value creates problems for both consumers and systemic risk management; with this hard-to-evaluate asset going unchecked, it’s potentially building up unhedged financial risk at an increasing rate.
With all these uncertainties and conflicting methods surrounding data, the question of how we can expect uniformed policymakers to find a solution is bewildering. The fact that the CEOs and companies that have created the issue can’t tackle it, should definitely be top of mind for everyone. It will be crucial to provide ideas from a business perspective (such as Datawallet), but also to dedicate time to studying the issue and build an international consensus on the best approach to tackle this defining 21st century matter.
The Problem With Data Dividends And Taxes
NYT Launches Privacy Project Initiative
With boundaries of privacy in dispute and its future uncertain, the New York Times recently started a month long project called the “Privacy Project”. The project’s goal is to collect and share stories exploring pros and cons of the current state of technology to convene debate about how it can best help realize human potential.
In their own words:
“With companies and governments gaining new powers to follow people across the internet and around the world, and even to peer into their genomes. The benefits of such advances have been apparent for years; the costs — in anonymity, even autonomy — are now becoming clearer…”
It’s a fantastic initiative to broach the topic of data ownership and privacy in a way that is visual and therefore approachable. In the linked article below, the NYT asks you help them figure out the new boundaries of privacy via interactive scenarios. Where would you draw the line?
Opinion | Where Would You Draw the Line?
Timing, at its finest
Facebook just announced a questionable new hire to take over as general counsel: Jennifer Newstead. Also known as one of the leading authors of the Patriot Act which, in the aftermath of the 9/11 attacks, dramatically expanded the scope of the government’s surveillance powers. The Patriot Act introduced new tactics like roving wiretaps, “sneak-and-peek” warrants, and justified the collection of telephone records from US carriers. Most notably, it initiated “national security letters,” enabling intelligence agencies to informally request specific data at any given time. Given the history, Newstead’s stance on the authorization of data requests from law enforcement, NSA, and FISA (which amounted to 52,000 in the second half of 2018) is likely to be a sympathetic one. To pull such a move immediately following the announcement of Facebook’s attempts to move towards a privacy preserving platform reeks of hypocrisy.
Facebook’s new chief lawyer helped write the Patriot Act
Broad Censorship In Response To Hate
In the wake of the horrific attacks in Sri Lanka that killed over 300 people, there are growing concerns about the policies of blocking social media sites in order to stop the spread of misinformation and prevent violent outbreaks. Julie Owono, the director of Internet Without Borders highlights that there has been a “growing acceptance of broad censorship as a response to hate and misinformation”. While censors are combating the weaponization of social media outlets, it is imperative that the measures we take forward are established between tech companies, anti-censorship activists, and policy makers together.
Facebook blocks could open the door to online censorship
Is Facebook Getting Its First Big Fines?
Everyone’s favorite data-hog, Facebook, is facing continued pressure as regulators on four continents are preparing for a long-awaited showdown after years of disinterest and half-steps. For too long, regulators have tried to change Facebook’s handling of user data without any real success. This could change with Facebook admitting in its last earnings call an impending fine of up to $5 billion from the FTC for violations of a privacy settlement from 2011. This fine could very well set the bar for further settlements or penalties for companies engaging in similar behavior. A good example of further pending action is Europe, where officials in Britain, France, Germany and Ireland are heavily scrutinizing the social media company’s practices, especially with regards to Facebook’s plans to integrate WhatsApp, Instagram, and Facebook Messenger. The German government also forced Facebook to adjust its data-collection policies after determining the company was exploiting its market dominance to profile its users and sell advertising. Governments in Australia, India, New Zealand and Singapore have passed or are considering new restrictions on social media. So far Facebook and its shareholders are withstanding the pressure, but the global scrutiny could very well strike at the heart of the company’s business model.
Regulators Around the World Are Circling Facebook
People’s Most Sensitive Information Sold, Again
A recent study found that 29 of 36 mental health apps (that remain undisclosed) are sharing sensitive user data without their consent for advertising and analytics to Facebook and Google. The apps, varying from counseling for depression to trying to quit smoking, have been sharing data such as health diaries and voluntary substance use reports. Qunn Grundy, from the University of Toronto, noted “this info could give outsiders a picture of your mental health that you might not want to share. You might see ads for health consultations or even addictive substances.” Such negligence of privacy for people’s most sensitive and intimate information is repulsive and must be stopped.
Mental health apps are sharing data without proper disclosure
That wraps this edition of the Data Digest.
See you next week,
SerafinData DigestGDPR Deep Dives Analyst Reports Data Misuse Consumer Privacy