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The Data Privacy Issue - Who should control our data?


With companies like Facebook and Google coming under scrutiny for data privacy issues, it begs the question of who should be in control of a user’s data when they use tech-enabled products and services. Against our best judgement, we often click the “agree” button for a product or service’s Terms of Service without even reading it, in turn giving companies the right to use our data in essentially whatever way they please (or whatever way is laid out in their ToS). For example, anything posted to Facebook or Instagram becomes the property of the company — no longer is your photo of your beautiful trip to Hawaii your own; Facebook now owns your creation. It’s quite shocking to think that these behemoths of tech companies essentially control us by owning and using our data at their leisure; however, the argument in favor of consumers owning, controlling, and selling their data has its downfalls as well.

On the one hand, if consumers had the ability to control and sell their data as they please, proponents of this situation argue that it would have a positive effect on both the individuals themselves and society as a whole. Consumers would be able to choose who gets to use their data and for what price they are able to obtain it, thus giving more power to the user and less power to the companies who want (or need) consumers’ data to succeed. By owning their own data, users would be able to determine just how private their lives are — they are the arbiters of who gets to see and use this data and who does not. This could result in increased competition between tech companies who would likely engage in bidding wars for customer data, in turn leading to more innovation in our world as the losers try to find other ways to succeed without the data they once hoped to acquire. It could also result in consumers providing their data to multiple companies, allowing each company to compete on a level playing field while still benefiting the greater good of society. Associate Professor of Economics at Stanford, Christopher Tonetti, gives a great example of this by talking about the automotive industry. He says:

“Consider, for example, the auto industry. Tesla collects data as its cars are driven around and uses that data to develop self-driving car technology. If Tesla’s customers owned the data, they could sell it to Tesla, but also to other competing firms. Every firm’s AI would improve and barriers to entry to developing self-driving cars would fall. Safer cars would result in the short term, and the move to autonomous vehicles would accelerate.”

This is an interesting point to think about — if we, ourselves, controlled our data instead of essentially blindly giving it away to big corporations, it’s possible that the big corporations may end up providing us with even better goods and services than if they controlled the data in the first place. 

What makes this issue difficult is the fact that information in the market for data is asymmetric — we do not necessarily know the value of our data relative to how corporations value our data. Thus, we may underestimate the value of our own data, and, in turn, we would not be compensated properly for that which is rightfully ours. This creates an inefficiency in the market for data because although society could be made better off (if we value our data at the “optimal” level, in line with that of corporations) we could also undervalue our data leaving corporations better off while we are left worse off. Furthermore, we may be incentivized to not sell our data for fear of lack of privacy — this may lead to companies not being able to provide the same amazing products and services we know and love, namely things like Amazon Alexa, Uber, and Tesla’s autonomous driving capabilities. In my opinion, technology will only advance if we accept that sometimes we will have to give up something to get something better in return. Whether we are blindly signing away our data rights by clicking agree on a Terms of Service we never read or we have the ability to sell our data to specific companies at specific times, I believe technological innovation will continue to evolve, just as consumers’ mindsets toward technology will evolve as well.

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