Personal data mobility: the new front in the battle for the digital economy
by Olaf Cramme on 30 May 2019
Data portability rules in GDPR do very little to alter the balance of power in the digital economy. Could a shift to an economy based on data mobility give individuals true control over their personal data, tackle antitrust concerns around big tech, and strengthen workers in the gig economy?
The centrality of data
The notion ‘information is power’ has somewhat become a truism, certainly long before the arrival of the internet or the journey towards digitalisation. In fact, the idea that knowledge has a certain value is rather ancient and can be traced back to various scholars throughout history. The development of modern business practices eventually helped to popularise this understanding, influencing everything from commercial and management strategies to communication, skills prioritisation and service culture.
What changed with the internet, however, is the explosion of information points that can be codified and categorised in a meaningful way. Even though most of our existing (collective) knowledge is yet to be captured in machine-readable spreadsheets, today’s corporate decision-making relies heavily on digitised and cross-referenced data sets thanks to powerful computing technology, global connectivity and, importantly, active user online participation. Quantitative models and advanced analytics are now part and parcel of every aspiring company.
In the networked platform economy, the quest for any kind of knowledge advantage is, of course, as prevalent as ever. Some have gone as far as describing data as the most precious commodity in the 21st century, attributing to it why some businesses succeed and others fail. Although data is not a finite resource and incredibly difficult to price, its value potential is indisputable – for example in circumstances like real-time trading or for purposes such as sales targeting. The expansion of the service sector, in turn, has led to much greater information sharing about and by individuals. Personal data has become its own currency.
The limitations of data portability rights
Acutely aware of all this, European policymakers therefore took the opportunity to introduce in the General Data Protection Regulation (GDPR) the concept of ‘data portability’. It was very much seen as part of the same coin: strengthening privacy through a set of new rights that would empower the individual vis-à-vis the data controller (the entity determining the data processing purpose). Since May 2018, citizens in the EU can not only legitimately request access to, as well as erasure of, their personal data held by external companies or organisations, but they are also entitled to move, copy and transfer this stored information from one service to another – in theory at least.
To be sure, severe limitations remain. The portability right merely applies to data which the user directly shared in a given transaction, i.e. it does not apply to every valuable piece of information held by the controller and which could be re-used for other purposes. There are, as of yet, no common standards or effective guidelines which translate the broad legal basis into a practical framework. And on top of this, the public sector is entirely excluded, meaning that some of the most valuable information continues to be out of reach for data-savvy individuals. Put bluntly, many of the rights conferred to individuals by GDPR do very little to alter the balance of power in the digital economy. Disputes over data dominance are raging on.
Against this background, a new vision is increasingly gaining traction: an economy based on true personal data mobility in which information flows efficiently and securely to the benefit of all – individuals, companies big and small, society at large. Unlike the current narrow definition of portability, such a system would create default conditions for a much wider circulation of personal data, not only between the individual and the service provider but also between the providers themselves. Data sharing moves from unilateral relationships to multilateral ones, supported by data facilitators and authorised representatives. Data re-use becomes the norm.
A catch-all solution to the challenges in the digital economy?
Arguments in favour of this approach are being made on at least three fronts in the debate about the future of the digital economy. First, it could tackle inefficient resource allocation and provide a considerable stimulus for growth and productivity. This, at least, was the conclusion from a substantial analysis published by the UK Department for Digital, Culture, Media and Sport (DCMS) at the end of the last year. Data silos and inertia are holding back much needed innovation. A significant shift in infrastructure, know-how, standards and regulation would therefore be required to generate real value from personal data sharing, leading to new business models as well as smarter consumer products and services.
Moreover, it would enable the emergence of a sizeable new data ecosystem supported by Personal Information Management services or Personal Data Stores, akin to how the far-reaching reforms in relation to “Open Banking” helped create the dynamic FinTech movement in the financial service industry. Similar opportunities for other sectors seem to abound.
Second, a personal data mobility regime could curb the power of big technology companies which are deemed to have an unhealthy advantage due to returns to scale of accumulated and combined user data. Concerns about competition and barriers to new entry loom large in digital markets that are subject to winner-takes-most dynamics. It is why Jason Furman, a former chair of the Council of Economic Advisers to President Obama, suggested in his recent report for the UK Government that regulators prioritise “data openness” and enhance interoperability to create a more level playing field in the digital economy. It is also a remarkable admission that antitrust legislation, although still relevant, can no longer cope on its own with undue market dominance. Instead, a new authority (‘Digital Markets Unit’) would need to enforce new codes of conducts for open and shared standards, so that it becomes easier for individuals to move their personal data from one platform to another.
Third, the increasing pool of workers in atypical employment relationships in and outside the gig economy could be given a tremendous boost if only they can gain control of their earned reputation in the online market. Still today, customer ratings and reviews remain firmly tied to the digital platforms on which they were created, even those that run on freelance or partnership models. Gig workers are consequently at a serious disadvantage if they want to improve their situation by moving elsewhere, given the relative value of their data in such a context. A simple right to information transfer would therefore make little difference unless industry seriously embraces the concept and establishes its own infrastructure for true personal data mobility. This, in turn, could spur important market developments for a whole range of WorkerTech solutions, many of which have real potential to improve the lives of those participating in the platform economy.
Needless to say, questions about (data) distribution are inherently political. They touch on the very fabric of the digital economy, where knowledge advantage and the ability to scale and influence behaviour matter a great deal. Whether or not the vision of personal data mobility can actually be reconciled with a growing consciousness for privacy and the effects of the digital footprint remains to be seen. But a new front is clearly opening up – one which could have a serious impact on the future of the internet.
Written by Olaf Cramme
Olaf's public policy expertise draws on his experience in government, Parliament and leadership roles in consulting and at a leading European think tank.