Respect for privacy will become a source of competitive advantage and an aspect of corporate responsibility

“Accept the terms of use and cookies”, demands a website. Click “OK” or read an explanation several pages long, at the end of which is an alternative, in faint text: “I do not consent to targeted advertising”. The user’s choice is influenced by the comment “You will receive a better user experience with cookies enabled”.

This is a fact of everyday life for users of Web services, including children playing games. Many people accept the terms and conditions without reading them. Sitra also observed this when it investigated the data flow of six Finnish test subjects.

The use of digital services and devices creates a trail of data. The individual data arising from online behaviour is refined at various stages in the data flow. There is an abundance of entities engaged in digital marketing, and they operate in networks containing multiple levels. Personal and behaviour data is also transferred to third parties by several means, such as data auctions, online services and companies that work together to consolidate individual data.

The General Data Protection Regulation The General Data Protection Regulation only allows an individual to gain limited access to their data. Free services are considered adequate recompense for handing over data. However, the true price of these services cannot be judged because it is impossible to find any information on the spread and exploitation of the data. As such, this online transaction cannot be considered fair.

The digital advertising business models that have emerged around the giants of the platform economy have been built in a fundamentally problematic way in terms of privacy. Users have a limited opportunity to evaluate the impacts of the consent they provide for the use of data.

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The data economy is in the throes of a revolution.

“Clearer, more transparent terms of use for online services would improve the user experience and confer a competitive advantage,” says Tiina Härkönen, Leading Specialist at Sitra. “Instead of copying the old ground rules from the platform economy and supporting the existing digital advertising machinery, companies should seek new operating models.”

The data economy offers enormous potential, and European companies have the opportunity to succeed with innovations enabled by new business models. This could be realised by means such as sharing data between companies in data partnerships or data networks with ethically sustainable methods and with the individual’s consent. The new services created in this way will be a part of the fair data economy, which will create well-being for all involved.

In 2019, Sitra carried out tests with six people in Finland to investigate the flow of an individual’s data online. The Digitrail survey studied where people’s data travels when they visit websites or log in to use digital services. The results are reported in Sitra’s latest study, On the trail of personal data – the flow and use of data collected from individuals in digital services (available also in Finnish). The publication describes the complex data collection network and offers recommendations, both for users of online services and for companies.

The experts consulted for the report were Futurice, a Finnish software company, and mathematician Paul-Olivier Dehaye, one of the people who exposed the Cambridge Analytica scandal.

The study entitled On the trail of personal data was written as part of Sitra’s IHAN project, which focuses on the fair data economy. In autumn 2020, companies will have the opportunity to develop and experiment with services operating in line with the principles of the fair data economy using the Ihan.fi testbed, the first version of which was released in June 2020. From autumn 2020 onwards, Sitra’s IHAN company programme will help the SMEs selected for the programme to create new business activities with the help of data, in line with the principles of the fair data economy.

Updated on 27 August 2020: The English version of the report was published on 27 August 2020. The link link to the English version added.