Who Should Regulate Privacy?
Earlier this month, I attended a conference on Household Financial Decision Making and Behaviour in Nottingham. Held between May 6-8, it was organised by the Network for Integrated Behavioural Science, a research initiative between the University of Warwick, University of Nottingham, University of East Anglia and funded by the Economic and Social Research Council (ESRC).
The conference concentrated on financial as well as consumption decisions observed in markets, with many talks devoted to the extent to which modern theories of decision-making can capture these decisions.One of the keynote addresses was delivered by George Loewenstein of Carnegie Mellon University, who is renowned for his work as a leader in behavioural economics.
Loewenstein spoke about Behavioural Economics and Privacy in the new digital economy. He referred to a series of decision-making experiments conducted by himself and his co-authors, which demonstrated how individuals recklessly endanger their own privacy by revealing sensitive information together with identifying data without considering the consequences. For example, an individual may post compromising photos on Facebook, not thinking that her employer may be regularly monitoring employeesâ€™ accounts on social media portals. Loewenstein concluded that individuals generally could not be trusted with their own privacy and that the government should step in and regulate privacy issues relating to online behaviour. In particular, he suggested that a set of rules should be developed for social media service providers such as Facebook, Twitter, YouTube, Google+, etc. to ensure their customersâ€™ security.
While the issue of privacy and cyber security of social media is very topical, I am not convinced that governmental regulation can provide a cure. We already see interesting trends which suggest that consumers are becoming more and more aware of such privacy issues, and they choose services with transparent protocols. For example, the user base of Facebook is aging, with younger people switching to services like Twitter and Instagram.
In my opinion, this not only reflects the fact that kids do not want to be present on networks used by their parents but also shows that consumers of the future prefer social media portals where they can show the world what they see (Instagram) rather than letting the world see them (Facebook). My sister, who is 7 years my junior, for example, explains that she would rather use Instagram where everyone can see everyone else rather than use Facebook where even after setting the highest access restrictions, your information can go viral should your closest Facebook friends decide to tag your private information.
There is no doubt that, considering the modern business models which exist in the markets for information, private companies may fail miserably in protecting customer privacy. The brightest example in the last few weeks is the case of Snapchat deceiving their users into believing that the information they exchanged via the Snapchat services was almost instantly deleted.
Yet, there is no guarantee that the government can do a better job! For example, the UK government has traded school data, NHS data and even taxpayer data with private companies, sparking debates about the effectiveness of any type of governmental regulation of information storage and transfers.
I believe that our understanding of privacy and cyber security will undergo serious transformation in the next few years, with new business models being developed around markets for information. This is a particular issue that we are also looking at in the HAT project.
However – and I might be alone on this — if given a choice between deciding for myself what information to share in a free market or engaging in information exchange in a market where government acts as some sort of Big Brother, I would choose self-regulated markets every time!
Note: This blogpost originally appeared on the BIG BlogÂ Â
HAT as Empowering the Individual
We conceived the H.A.T project and assembled the best team we can think of to deliver on it because:
(1) we believe there is another way for technology to work in our lives a design philosophy that makes us smarter and more empowered, rather than just making things smarter. To do that, we must be able to embed data that includes our practices in context (i.e. what we do, and why we do it), which can then be the basis for the future design of Things.
(2) we believe that personal data which include context could be valuable for us to trade with firms so that they can design offerings we wish to buy to be exchanged for the application of our data onto these offerings.
(3) we believe that privacy can be preserved and with clear property rights of the data from the H.A.T as owned by us as individuals, a market for exchange of data and offerings could emerge, and we are incentivised to generate more data as opposed to the current model where many of us are fearful of digital visibility and exposing personal data.
(4) we believe that the future of how we manufacture things will depend on a design philosophy that includes our context and greater connectivity, with new business and economic models emerging, resulting in more businesses being generated and jobs created even while privacy is preserved.
(5) we believe that firms out there who hold our data (google, banks, supermarkets) – what they call big data – hold a very very small subset of our data and the way we can persuade them to give back our data so that the personal data economy can be formed for more cool products and services is for us to generate more data about ourselves that is even more than what is held out there and more true about who we are and what we want. By participating in the personal data economy as ourselves, the value of our data held by us is worth more than the value of our data held by firms – sooner or later, they will see that and we will begin that conversation on how we can shape our own future that is privacy preserving and having really cool personalised products and services as well!