Tagged: consumers

Annual Data Summit “Harnessing the Power of the Digital Revolution”

news10-22-politicoOn the 13th of October, Politico Europe, in partnership with Telefonica, organized the second Annual Data Summit, under the heading “Harnessing the Power of the Digital Revolution”. The focus was on the opportunities that processing data could bring, as opposed to underlining the risks which get too much of the spotlight, according to Telefonica’s representative. Keeping in mind the importance of privacy, he went on to stress the benefits that Big Data could bring such more efficient and smart transportation/logistics, healthcare, education, access to financial services, all of which will contribute to creating economic growth.

COFACE-Families Europe has been very skeptical about the so called “benefits” of Big Data. In an article entitled “Fintechs: Milking the Poor”, Families Europe denounces the illusions of improving access to financial services via Big Data driven innovations, especially in Europe.

Commission Vice-President Andrus Ansip stressed in his keynote the importance to enable free data flows across borders, especially within the EU, and therefore in opposition to the “data localization” trend where in the name of privacy, data about users would have to be hosted at their national level. In the European Union, there are already 50 laws in 21 Member States about data localization and this could greatly increase the costs of hosting/processing data as setting up data centers in each Member State is inefficient as some countries’ climate and environment is better suited for optimizing data centers’ energy use. EU startups would be most penalized by data localization as the “big” players such as Amazon, Google, Facebook have the means to comply with data localization measures.

While data localization laws aim at addressing national security concerns as well as privacy concerns, Andrus Ansip stressed that free data flows and privacy are not incompatible. He went on to underline the necessity for guaranteeing data portability as another precondition for enabling free data flows.

While COFACE-Families Europe does not deny that public data which can be used to serve the common good: healthcare data or transportation data could help prevent or fight more effectively a number of health risks/diseases or prevent road accidents and enable smoother and smarter traffic management. As always, the devil is in the details. The same data sets can also be used to carry out individual risk assessments and price certain citizens out of the insurance market. And this is but one of the most evident dangers. In some countries like China, data has also been used to identify “good” and “bad” citizens. Therefore, a number of conditions need to be fulfilled to ensure that data serves the common good, including the possibility for independent bodies to audit algorithms working with data to check whether they contain any form of human bias or have harmful consequences (social exclusion, discrimination…) on a part of society.

In the debate around the benefits/risks of big data, COFACE Families Europe insists on one key aspect: there is, as of yet, no objective measurement for deciding whether benefits outweigh risks/harm. How many consumers need to suffer detriment before there is a need to become concerned and intervene? 10? 100? 1000? And unfortunately, if we are to look at certain recent cases, it seems as if (macro)-economic considerations trump consumer protection.cFor instance, in the Volkswagen Dieselgate scandal, it seems as if the German authorities will not penalize or fine Volkswagen, and Volkswagen doesn’t plan on compensating consumers, at least in Europe. In essence, it is more important to defend a National “champion” than protect consumers from fraud, which, of course, directly fuels moral hazard, encouraging companies to reach systemic importance to be relatively immune from consequences in case of fraud. Thus it is important to strongly regulate big data or what can be done with consumer data rather than wait for market players to reach systemic importance, at which point it will be too late.

With regards to data localization, COFACE-Families Europe agrees that such policies carry many risks among which limiting freedom of expression, the possibility for governments to target dissidents more easily or forced jurisdiction (by localizing your data in one country, you are forcibly subjected to the laws of that country which may not be to your advantage). At the same time, the risks of data concentration in select countries also has some disadvantages such as creation of monopolies, an unequal share of the economic benefits of data, and the same threats for spying and targeting dissidents, simply concentrated in a few countries instead of being spread across the Internet.

COFACE-Families Europe advocates for a balanced approach where users should have the right to choose whether they want their data to be hosted inside their country or not. While it is true that setting up data centers in certain countries is less economically efficient than in others (linked to energy efficiency concerns mostly), concentrating data centers in a select few countries is simply an extension of the “comparative advantage” economic theory, which has led to massive trade imbalances between highly industrialized/developed nations and under-developed nations solely reliant on raw resource extraction. Data hosting and data centers should be part of the public infrastructure and public services, much like telephone lines, electricity, water supply or roads. In each country, there should be a minimum public service for data hosting, in addition to private data hosting solutions and users could choose, inside the services they use, if they wish their data to be hosted in their country or not. Such debates, however, might become obsolete anyways, since decentralized data hosting solutions are currently being tested and would enable users to host their data directly on their devices, bypassing the need for centralized data centers altogether.

Justin Atonipillai from the US department of Commerce followed Andrus Ansip and stressed, in his speech, the support for the open source movement, which has created many different ways to share and analyze data in an ethical way, respectful of privacy. Families Europe fully agrees with this approach.

The first panel of the conference touched upon key topics such as consumer choice, interoperability, openness and data portability. MEP Julia Reda underlined several important points which Families Europe fully supports:

  • Consumers must have the possibility to access their Internet of Things devices. For instance, the owner of a pace-maker could not access his own device to diagnose it for bugs even though he felt something was wrong.
  • Users should have the right to move their data, but at the same time, the right to data portability shouldn’t be mistaken or mixed up with the concept of “data ownership” and especially, the danger of transforming data into a commodity or a property that can be “transferred” or “sold” like any other good. This goes directly contrary to data protection rights as some types of data, such as highly sensitive data like health related data, should never be “sold” or treated like a commodity.

COFACE-Families Europe addressed the panel during Q&A to insist on including mesh networking capabilities for IoT. Mesh networking would allow users of IoT devices to connect directly to those devices without going through the Internet and the servers of the companies selling these IoT devices. Mesh networking also allows IoT devices to talk directly to each other and enable interoperability. At the moment, the technologies which enable mesh networking include WiFi and Bluetooth, but the upcoming 5G standards, which will equip most IoT devices, also need to allow mesh networking.

For more information about the event, please visit the Politico website here.

 

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