GDPR is now in full effect in the
E.U. to regulate data sharing on the internet. While GDPR specifies how
companies can treat user data in the E.U., global firms like Google, Amazon, and
even not tech-centric firms that have a digital presence or store user data are
rewriting their policies to ensure compliance. This means the regulation is
having a global impact affecting users of digital services everywhere. What
business today doesn’t store digital records of the client base?
The biggest change I understand is on
how data is shared behind scenes. E.U. residents have right to request data
firms have collected on them and to have certain personal data purged. If firms
are found to be non-compliant with such requests they may be fined 4% of their global
revenue, which for some of the large global tech powerhouses amounts to massive
sums. Were Amazon found to be non-compliant, they might be on the hook for a
roughly $7 billion fine based on their 2017 sales.
Here’s a quick educational video on the subject:
While I think transparency around the
nature of the data companies hold on users and how it is being used is good for
consumers, I also think it should be well within companies’ rights, after clear
and prominent disclosures, to deny service for users who do not permission the
usage of their data. Okay, denying service might be extreme, firms with an
implicit data charge business model should at least charge those who don’t
permission use of their data.
The
benefits of providing data seem to be twofold – first user data goes to
improving the efficacy of products that offer better tailored solutions to who
we are and what makes us unique. Second, user data allows firms to commoditize
data on the backend to help advertisers increase the yield from their marketing
spend as we’ve begun to explore in our review of Google Advertising. This is
the way we are able to “pay” for services like Facebook and YouTube, and I’m
okay with that. I’d rather pay with my information than hard dollars and wouldn’t
want a free rider enjoying the same service without payment in either fiat
currency or personal data.
There is
also the societal cost of purging user data in hindering the “perfect search”
described in John Battelle’s book “The Search.” Besides relying mainly on back links
and keywords, Battelle envisioned results that incorporated users’ historical
clickstream in a way that could offer enhanced, personalized results that might
better understood what the user was looking for. This derivative data might be
lost and be made more incomplete from those who opt out, resulting in a
productivity loss incurred by everyone.
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