Why consumers should own their data1 min read . Updated: 04 Aug 2020, 08:58 AM IST
Consumer ownership of data can improve innovation and competition in the economy by allowing wider use across companies, argues a new paper
The overused phrase “data is the new oil" best sums up the importance of data in the modern economy. But, unlike oil, the rules of ownership are murky in the case of data. Once a consumer shares their data with a company, they lose control over it. A new study suggests that it is in the interest of the economy if consumers retain full control of their personal data.
In an article in VoxEU, Stanford University researchers Chad Jones and Christopher Tonetti argue that a consumer owning their personal data would achieve two goals: they would respect their own privacy, and they will be able to sell their data to multiple organizations.
The second goal is subtle: the authors say this takes advantage of the “infinite usability" of data, a trait other goods such as oil do not have. This would lend one’s data wider use, which could improve efficiency in the economy, the authors argue.
The article gives the example of machine learning algorithms in the healthcare sector. A hospital’s algorithm that uses data of its own patients is inferior to an algorithm that has data from patients from across the country, the authors say. Machine learning algorithms adjust themselves to only perform better if they are exposed to more data.
Self-driving cars are another good example. If companies that build such cars could have access to the data collected through all users, the technology would improve faster and become safer. But when companies own their consumers’ data, they may not want to sell it to their competitors.
If consumers owned their data, more competition and innovation would follow. Every firm’s artificial intelligence would improve and entry barriers into new industries would fall, the authors say.
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