By Tim Walsh, Global Vice President, Customer Engagement and Commerce, SAP
We are now ending the lust phase of our relationship with big data. Thank God. The next phase promises to be equally exciting, albeit considerably more turbulent. Some maturity, some retribution.
For the purpose of this discussion, set aside our myriad definitions of "Big Data" the technology and focus instead on the powerful oligopoly of companies that have grown to dominance by gathering and selling data -- your data. The concept isn't new. Selling data has been an industry for many decades. The Internet era exploded data. Then some Internet companies exploited data -- in a way and to a degree that we could barely conceive 20 years ago. A concentrated group of companies, some household names, some not, have set the world on fire by acquiring and selling data about you.
Yes, you. Call these behemoths collectively "Big Data", because they are heading down the path blazed by the Tobacco oligopoly affectionately known as "Big Tobacco", with potentially similar disaster in store. We can hardly compare the damage Big Data does to the health crisis Big Tobacco provided us. On the other hand, Big Data has no exclusive control over the addictive commodity underlying its business. If they lose the public trust – a process well underway now -- a major piece of the economy is going to have to change or die.
More data, more services... and games, phones, watches, appliances, tools, cars, rockets...everything. It's an amazing deal right? Maybe. First be sure you understand the deal. Most people don't. Or maybe they don't really want to. Those gadgets are cool! So, like the teenager who strikes the Joe Camel pose for the first time or the unemployed laborer who scores a zero-down adjustable rate mortgage, the relationship begins. Sure, smoking is "bad for you", you shouldn't borrow more than you can repay and you should understand the license agreement before you click. But everybody's doing it! They can't all be wrong. Anyhow, if it was really bad for you, the government wouldn't allow it, right?
Then the lawsuits began.
Let's look back at the progression of Big Tobacco. In 1950, the British Medical Journal published the first scientific study correlating smoking and lung cancer. It wasn't until 1964 that the US Surgeon General also explicitly connected smoking cigarettes to cancer. Over subsequent decades, evidence mounted despite being routinely obfuscated by Big Tobacco. Already in the mid-50's however, individuals had begun to sue Big Tobacco on various grounds, mostly asserting fraud and violations of consumer protection laws. The success of these cases? Through 1994 -- 40 years of victim vs. Big Tobacco -- over 800 cases were brought in the US. Big Tobacco didn't lose once. That's power. They knew how to win in the courts and in Congress. That changed in the late 90's.
Two things forced a 180 degree turn on Big Tobacco's US fortunes. First, tobacco insiders (THE Insider -- Dr Jeffrey Wigand, among others) delivered compelling evidence that not only did Big Tobacco know their product was harmful and dangerously addictive but they literally designed the product to maximize addictive effects. "We're a nicotine delivery business."
The truth was out and it was ugly. Second, the government got involved when the victims could no longer be ignored. Several States Attorneys General banded together and eventually won the biggest settlement in history against Big Tobacco in 1998. The complaint asserted fraud, deception, negligence and public nuisance, among other things. In the US now, smoking is pariah activity and illegal in most public spaces. Big Tobacco knew the writing was on the wall in the U.S. Long before the judgment came, they had diversified into food and other consumables.
Big Data is running down a similar path. Deception? Check. Users are only now realizing on a broad basis that many companies are watching, recording and manipulating them constantly. It's not just what you buy. That's primitive stuff. Every site you visit, everything you 'like', every person you interact with online, every word you type in "free" email or chat service, every picture you take (yes, including those you thought were instantly deleted), every physical place you go with that mobile device, the middle of the night drunken surfing... yes, yes and yes.
And it's not just online activity. Remember, companies have been at this for decades. All the publicly available information is now being tied together with your digital life to deliver an incredibly intimate picture of who you are and what you are likely to want, spend, do. Just leave it to Big Data to make the predictions. (What’s the best way to make an accurate prediction? Manipulate the outcome!)
Anyone not living in a gun shack has a profile that runs to literally thousands of data elements. You don't need to be a Facebook addict to have a file 6 inches thick which carries your purchase history, voter registration, residence, major credit events, network of friends etc. That list is growing exponentially because now the cottage data industry has become Big Data, with limitless resources. Increasingly, Big Data isn't even bothering to ask user consent for any of this. As they say: "Not paying for the product? You are the product." The government (US and EU) is taking notice and taking action. Users feel deceived and governments have picked up the scent.
In Part 2 of this series, I’ll take a deeper dive into government intervention related to big data.
This article also appeared on SAP Business Trends.
