Data Value in a PIMS context
A real case – a business man returning to a hotel room and checking their data impact account. Human centricity and why is needed- refer to Nikos IEEE paper. Advent and role of PIMS – challenges and refer the opinion of the European Commission.
Value of personal data is uncertain (refer to studies) and traditional economic theory does not work. Could personal data protection by one of the pillars of a new HCDE in the same way as private property protection was key to the development of capitalism?
Ralph stepped out of the elevator and headed to his apartment. He pushed a broken light bulb notification using his O&M app before the door closed after him. A tiring day indeed, but fortunately he managed to boost his Data Impact Score thanks to the last report and data he delivered last week. For sure he had secured a meaty bonus this month, and this time the result was truly remarkable. “Consent to share info to get a dinner recommendation?”, the message popped up in his cellphone. He clicked “Yes” and asked also for a personalized film suggestion. However, he was cautious to avoid sharing any information to news dealers: he hated skewed news and usually preferred a more generic feed. After recommending the restaurant that served the meal, he checked his personal impact feed on his personal data vault manager. Good news! His recommendations and reviews were followed, and sharing his location while driving was especially fruitful and yielding benefits this week. He lied on the sofa, browsed the list of movies, and selected an old documentary, “The Social Dilemma”.
Data is an increasingly relevant production factor and a foundation of the web economy. Traditional data-driven service providers have built the biggest companies in history by collecting, enriching and processing huge amounts of information. According to the DataLandscape portal of the EU and IDC, 290k data suppliers in the EU plus the UK have generated 84 Billion Euro in 2019, and will grow 6%-11% in the period 2021-2025.
As demand for data grows, general-purpose marketplaces such as AWS, Advaneo, Data Intelligence Hub or Dawex have entered into scene. They are being challenged by niche marketplaces which cover data sourcing for innovative purposes, such as feeding AI / ML algorithms (Mechanical Turk, DefinedCrowd), IoT real-time sensor data (IOTA, Ocean Protocol / DEX, Datapace), or targeting specific industries and applications (e.g. Caruso for the connected car or Veracity for Energy and transportation industries). Not surprisingly, some leading data management platforms (Snowflake, Cognite) and niche digital solutions (Carto, Openprise) are integrating data exchange, and even specific data marketplace functionality into their systems.
Although users are compensated by being provided access to the services they offer, a growing number of experts (see Jaron Lanier’s “Who owns the future?” book or Nikolaos Laoutaris’ article “Why Online Services Should Pay You for Your Data?” in the scientific journal IEEE Internet Computing) is claiming protection for personal data, and additional direct compensations for consenting to its use by data service providers for each specific purpose. New legislative developments such as the General Data Protection Regulation (GDPR) in the EU or the California Consumer Privacy Act (CCPA) are aimed, among others, to this specific purpose.
This legislative context has spurred the development of Personal Information Management Systems (PIMS) empower individuals to take control and manage their personal data, stored by ISPs. Some of them (e.g. Wibson, GeoDB, MyDex or Airbloc) offer marketplace capabilities so individuals are able to make some money, or get rewards for exchanging their PI.
A human-centric data economy requires that individuals are compensated by companies for their data in proportion to the benefits that such data produce for the overall economy. Not only is this a compensation for the negative externality of privacy loss, but a way to improve the quality of data in the Internet, and eventually make the current economic model sustainable, as well. According to the EC, PIMS “deserves consideration, support and further research with a view to contributing to a sustainable and ethical use of big data and to the effective implementation of the principles of the recently adopted GDPR”.
Different studies have been conducted in order to estimate what the value of data is. From the users’ perspective, economic experiments, surveys and polls reveal that users really ignore what the value of data is. Moreover, the value of data is closely related to the context in which it is used (e.g. eBay estimated that a 15\% improvement on the recommender system translated into 6\% increase in revenues ), and this value is not tied to its volume . Only by increasing data trading and exchange will the market build a solid answer to this question.
The fact that data is a public (non-rival, non-excludable) good, and the decreasing cost of harvesting and processing it, are undeniably leading to a free-rider problem in the Internet. It is not clear how this will fire back to data-driven companies: will the abuse of companies end up raising the concern of people about their privacy being violated and reduce web use? will the quality of data, and thus their utility for these companies, degrade in time? PIMS and data marketplaces are named to contribute to changing this situation, by building a sustainable human-centric data economy, and addressing the question of how valuable your personal data is.
Santiago Andrés Azcoitia, PhD Student IMDEA Networks