On the trail of personal data
Sitras publication On the trail of personal data was published in Finnish on 24 June 2020. The English version will be released in autumn 2020.
According to a survey carried out by Sitra’s IHAN project on the fair data economy, people would like more transparency over the use of the data collected from individuals and the capability to distinguish companies that use data sustainably from those who do not. A separate survey of companies revealed the business perspectives on the data economy and highlighted serious concerns among European companies about their competitive positions in the data economy in relation to major American and Chinese corporations.
Following on from these surveys, in the second half of 2019 Sitra carried out a trial with six individuals in Finland to investigate the flow of each person’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 of the Digitrail survey show that it is impossible for people to know what data has been collected about them and who is holding the data. The individual data arising from online behaviour is refined at various stages in the data flow to create a profile of the individual. Profiles are created by companies working in and around digital advertising without the knowledge of consumers, and despite the large amount of data collected, they do not provide a true picture of the individual, although they influence the information offered to the individual. The General Data Protection Regulation (GDPR) 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 in the platform economy have been built in a fundamentally problematic way in terms of privacy. There is a very limited window of opportunity for users to assess the impact of giving consent for their data to be used when asked to do so upon visiting a site or downloading an application.
The most popular platform services have been built up over the course of many years, providing significant benefits as well as drawbacks. The field of platform companies, digital advertising and data analytics is undergoing a transformation as a result of pressure from consumers and legislation, as well as movements within the field. So far, individuals have been responsible for guarding their privacy, and privacy has become the most complex issue for the platform companies and digital advertising market. It is essential for consumers to form an understanding of the ground rules in the market. As regards services used by children and young people, this presents a unique set of challenges.
The respect for privacy should extend to the customer experience and corporate responsibility, as these aspects provide European companies with an opportunity to establish themselves as fair data economy operators, thereby gaining a competitive advantage. Instead of replicating the old ground rules for the platform economy and supporting the existing digital advertising machinery, it is important to seek new business models. The data economy offers enormous potential, and European companies have the opportunity to succeed with innovations enabled by new operating 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.