Data economy

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A data economy is a global digital ecosystem in which data is gathered, organized, and exchanged by a network of companies, individuals, and institutions to create economic value. [1] [2] The raw data is collected by a variety of factors, including search engines, social media websites, online vendors, brick and mortar vendors, payment gateways, software as a service (SaaS) purveyors, and an increasing number of firms deploying connected devices on the Internet of Things (IoT). [3] Once collected, this data is typically passed on to individuals or firms, often for a fee. In the United States, the Consumer Financial Protection Bureau and other agencies have developed early models to regulate the data economy. [4] : 531–32 

Contents

Storing and securing collected data represent a significant portion of the data economy. [5]

Data economy categories

Big data economy

Big data is defined as the algorithm-based analysis of large-scale, distinct digital data for purposes of prediction, measurement, and governance. [6] [7]

Human-driven data economy

The human-driven data economy is a fair and functioning data economy in which data is controlled and used fairly and ethically in a human-oriented manner. [8] [9] The human-driven data economy is linked to the MyData Movement and is a human-centered approach to personal data management. [10]

Personal data economy

The personal data economy is created by individuals using personal data, which people supply either directly or indirectly. Consumers become suppliers and controllers. [11] [12]

Algorithm economy

In an algorithm economy, companies and individuals can buy, sell, trade, or donate individual algorithms or apps pieces, by leveraging dedicated marketplaces. [13] [14] [15]

Transition to data economy

Market size

The size of the EU data economy was estimated to be more than €285 billion in 2015, representing over 1.94% of the EU GDP. Key sectors in the data economy either are or are on the way to becoming data-driven. For example, the manufacturing, agriculture, automotive, smart living environments, telecommunications, healthcare, and pharma industries are at the core of the data economy. [1]

Benefits

Management of personal information makes everyday life easier and adds to well-being. A unified procedure opens up opportunities for user-oriented innovations and business activities.

Individuals have control over the data concerning themselves. Individuals can actively define the services and the conditions under which their personal information is used. The service providers worthy of people's trust can also get access to significantly more extensive and varied data e-services.

Challenges

Approaches to data breaches are problematic. Challenging issues include compensation to victims, incentives for enterprises to invest in data security, and uncertainties for corporations about regulatory burdens and litigation risks. [16] Furthermore, data portability might decrease interest in innovations. [1]

Regulation

The regulation of the data economy is closely linked to privacy. [2] The present approach is flexibility, finding a balance between protecting privacy and allowing citizens to decide for themselves. The European Union GDPR regulation is one cornerstone of this new regulatory framework. [17] [18] A new paradigm for data governance is needed, with data ethics as a central component in all regulatory reforms. [19]

Criticism

The data economy raises concerns about regulatory uncertainties and incoherence, privacy, ethics, the loss of control of data, and the ownership of data and related rights. [20] [21] [22] Mathematical models and algorithms based on them are too often opaque, unregulated, and incontestable. [23]

Some concerns have been raised about internet companies controlling the flow of data and using it to gain power. [24]

The critiques expressed in the 2012 General Data Protection Regulation (GDPR) draft of the European Commission have now led to concrete regulations:

“This is why it is time to build a stronger and more coherent data protection framework in the EU, backed by strong enforcement that will allow the digital economy to develop across the internal market, put individuals in control of their own data and reinforce legal and practical certainty for economic operators and public authorities.” [25]

See also

Related Research Articles

Information privacy is the relationship between the collection and dissemination of data, technology, the public expectation of privacy, contextual information norms, and the legal and political issues surrounding them. It is also known as data privacy or data protection.

<span class="mw-page-title-main">Data Protection Directive</span> EU directive on the processing of personal data

The Data Protection Directive, officially Directive 95/46/EC, enacted in October 1995, was a European Union directive which regulated the processing of personal data within the European Union (EU) and the free movement of such data. The Data Protection Directive was an important component of EU privacy and human rights law.

The right to privacy is an element of various legal traditions that intends to restrain governmental and private actions that threaten the privacy of individuals. Over 185 national constitutions mention the right to privacy. On 10 December 1948, the United Nations General Assembly adopted the Universal Declaration of Human Rights (UDHR); while the right to privacy does not appear in the document, many interpret this through Article 12, which states: "No one shall be subjected to arbitrary interference with their privacy, family, home or correspondence, nor to attacks upon his honor and reputation. Everyone has the right to the protection of the law against such interference or attacks."

<span class="mw-page-title-main">Information Commissioner's Office</span> Non-departmental public body

The Information Commissioner's Office (ICO) is a non-departmental public body which reports directly to the Parliament of the United Kingdom and is sponsored by the Department for Science, Innovation and Technology. It is the independent regulatory office dealing with the Data Protection Act 2018 and the General Data Protection Regulation, the Privacy and Electronic Communications Regulations 2003 across the UK; and the Freedom of Information Act 2000 and the Environmental Information Regulations 2004 in England, Wales and Northern Ireland and, to a limited extent, in Scotland. When they audit an organisation they use Symbiant's audit software.

Personal data, also known as personal information or personally identifiable information (PII), is any information related to an identifiable person.

Information privacy, data privacy or data protection laws provide a legal framework on how to obtain, use and store data of natural persons. The various laws around the world describe the rights of natural persons to control who is using its data. This includes usually the right to get details on which data is stored, for what purpose and to request the deletion in case the purpose is not given anymore.

Privacy law is a set of regulations that govern the collection, storage, and utilization of personal information from healthcare, governments, companies, public or private entities, or individuals.

<span class="mw-page-title-main">Information sensitivity</span> Classification of secrecy of information

Information sensitivity is the control of access to information or knowledge that might result in loss of an advantage or level of security if disclosed to others. Loss, misuse, modification, or unauthorized access to sensitive information can adversely affect the privacy or welfare of an individual, trade secrets of a business or even the security and international relations of a nation depending on the level of sensitivity and nature of the information.

The digital economy is a portmanteau of digital computing and economy, and is an umbrella term that describes how traditional brick-and-mortar economic activities are being transformed by the Internet and World Wide Web technologies.

Data portability is a concept to protect users from having their data stored in "silos" or "walled gardens" that are incompatible with one another, i.e. closed platforms, thus subjecting them to vendor lock-in and making the creation of data backups or moving accounts between services difficult.

<span class="mw-page-title-main">General Data Protection Regulation</span> EU regulation on the processing of personal data

The General Data Protection Regulation, abbreviated GDPR, or RGPD is a European Union regulation on information privacy in the European Union (EU) and the European Economic Area (EEA). The GDPR is an important component of EU privacy law and human rights law, in particular Article 8(1) of the Charter of Fundamental Rights of the European Union. It also governs the transfer of personal data outside the EU and EEA. The GDPR's goals are to enhance individuals' control and rights over their personal information and to simplify the regulations for international business. It supersedes the Data Protection Directive 95/46/EC and, among other things, simplifies the terminology.

The gathering of personally identifiable information (PII) refers to the collection of public and private personal data that can be used to identify individuals for various purposes, both legal and illegal. PII gathering is often seen as a privacy threat by data owners, while entities such as technology companies, governments, and organizations utilize this data to analyze consumer behavior, political preferences, and personal interests.

<span class="mw-page-title-main">Brussels effect</span> Market mechanisms by which the European Union regulation is adopted globally

The Brussels effect is the process of unilateral regulatory globalisation caused by the European Union who de facto externalizes its laws outside its borders through market mechanisms. Through the Brussels effect, regulated entities, especially corporations, end up complying with EU laws even outside the EU for a variety of reasons. The effect is named after the city of Brussels, the de facto capital of the European Union.

<span class="mw-page-title-main">Data Protection Act 2018</span> United Kingdom legislation

The Data Protection Act 2018 is a United Kingdom act of Parliament (UK) which updates data protection laws in the UK. It is a national law which complements the European Union's General Data Protection Regulation (GDPR) and replaces the Data Protection Act 1998.

The right of access, also referred to as right to access and (data) subject access, is one of the most fundamental rights in data protection laws around the world. For instance, the United States, Singapore, Brazil, and countries in Europe have all developed laws that regulate access to personal data as privacy protection. The European Union states that: "The right of access occupies a central role in EU data protection law's arsenal of data subject empowerment measures." This right is often implemented as a Subject Access Request (SAR) or Data Subject Access Request (DSAR).

Regulation of algorithms, or algorithmic regulation, is the creation of laws, rules and public sector policies for promotion and regulation of algorithms, particularly in artificial intelligence and machine learning. For the subset of AI algorithms, the term regulation of artificial intelligence is used. The regulatory and policy landscape for artificial intelligence (AI) is an emerging issue in jurisdictions globally, including in the European Union. Regulation of AI is considered necessary to both encourage AI and manage associated risks, but challenging. Another emerging topic is the regulation of blockchain algorithms and is mentioned along with regulation of AI algorithms. Many countries have enacted regulations of high frequency trades, which is shifting due to technological progress into the realm of AI algorithms.

Non-Personal Data (NPD) is electronic data that does not contain any information that can be used to identify a natural person. Thus, it can either be data that has no personal information to begin with ; or it is data that had personal data that was subsequently pseudoanonymized or anonymized. NPD is part of the overall Data Governance Strategy of a region or country. While personal data are covered by Data Protection Legislation such as GDPR, other kinds of data would fall under the scope of NPD Regulation.

Michael Veale is a technology policy academic who focuses on information technology and the law. He is currently associate professor in the Faculty of Laws at University College London (UCL).

Digital self-determination is a multidisciplinary concept derived from the legal concept of self-determination and applied to the digital sphere, to address the unique challenges to individual and collective agency and autonomy arising with increasing digitalization of many aspects of society and daily life.

Automated decision-making (ADM) involves the use of data, machines and algorithms to make decisions in a range of contexts, including public administration, business, health, education, law, employment, transport, media and entertainment, with varying degrees of human oversight or intervention. ADM involves large-scale data from a range of sources, such as databases, text, social media, sensors, images or speech, that is processed using various technologies including computer software, algorithms, machine learning, natural language processing, artificial intelligence, augmented intelligence and robotics. The increasing use of automated decision-making systems (ADMS) across a range of contexts presents many benefits and challenges to human society requiring consideration of the technical, legal, ethical, societal, educational, economic and health consequences.

References

  1. 1 2 3 "Data Market Study 2021-2023. First report on policy conclusions". European Commission. 7 May 2021. Retrieved 7 August 2023.
  2. 1 2 Sestino, Andrea; Kahlawi, Adham; De Mauro, Andrea (2 August 2023). "Decoding the data economy: a literature review of its impact on business, society and digital transformation". European Journal of Innovation Management. doi:10.1108/EJIM-01-2023-0078. S2CID   260405973.
  3. ↑ Chamberlin, Bill. "The Data Economy: 2016 Horizonwatch Trend Brief". Horizon Watch. IBM Expert Network. Retrieved 20 August 2018.
  4. ↑ Van Loo, Rory (2018-07-01). "Technology Regulation by Default: Platforms, Privacy, and the CFPB". Georgetown Law Technology Review. 2 (2): 531.
  5. ↑ Information Technology and Innovation Foundation (2017). Post-Hearing Written Submission Nigel Cory Trade Policy Analyst Before the United States International Trade Commission Investigation No. 332-56 Global Digital Trade I: Market Opportunities and Key Foreign Trade Restrictions [PDF file]. Retrieved from http://www2.itif.org/2017-usitc-global-digital-trade.pdf
  6. ↑ Flyverbom, Mikkel; Madsen, Anders Koed (January 2015). Sorting data out – unpacking big data value chains and algorithmic knowledge production. doi:10.4135/9781412985871. ISBN   9780803972377.{{cite book}}: |journal= ignored (help)
  7. ↑ Satell, Greg. "5 Things Managers Should Know about Big Data Economy". Forbes . Retrieved 7 September 2018.
  8. ↑ "Human-Driven Data Economy". Sitra. Retrieved 7 September 2018.
  9. ↑ "Prepare for a new human-driven data economy HealthTech Wire". HealthTech Wire HIMMS Europe. May 23, 2018. Retrieved 7 September 2018.
  10. ↑ Dehaye, Paul-Olivier (December 21, 2017). "PersonalData.IO helps you get access to your personal data". Open Knowledge International Blog. Retrieved 7 September 2018.
  11. ↑ Syrjänen, Tuomas (January 24, 2018). "The Rise of the Personal Data Economy". GreenBook Blog. Retrieved 7 September 2018.
  12. ↑ Personal Data: The Emergence of a New Asset Class (PDF). World Economic Forum. January 2011. p. 40. Retrieved 7 September 2018.
  13. ↑ "What is the Algorithm Economy". Techopedia. 4 October 2017. Retrieved 7 September 2018.
  14. ↑ Kumar, Abhishek; Finley, Benjamin; Braud, Tristan; Tarkoma, Sasu; Hui, Pan (2020). "Marketplace for AI Models". arXiv: 2003.01593 [cs.CY].
  15. ↑ Ezrachi, Ariel; Stucke, Maurice E. (2019). Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy. Cambridge: Harvard University Press. ISBN   9780674241589.
  16. ↑ Daly, Angela (2018). "The introduction of data breach notification legislation in Australia: A comparative view" (PDF). Computer Law & Security Review. 34 (3): 477–495. doi:10.1016/J.CLSR.2018.01.005. S2CID   67358435.
  17. ↑ Davies, Jamie (August 2018). "It turns out regulating the data economy is really hard". Telecoms news. Retrieved 27 August 2018.
  18. ↑ Abate, Serafino (13 August 2018). "Is the data economy self-healing, or should economic regulation be considered?". GSMA. Retrieved 27 August 2018.
  19. ↑ Maya, Uppaluru (April 16, 2018). "The U.S. Needs a New Paradigm for Data Governance". Harvard Business Review. Harward Business Review. Retrieved 7 September 2018.
  20. ↑ Wendehorst, Christiane; Cohen, Neil; Weise, Steve (August 25, 2017). "Feasibility Study ALI-ELI Principles for a Data Economy" (PDF). European Law Institute. Retrieved 20 August 2018.[ permanent dead link ]
  21. ↑ Crabtree, Andy; Lodge, Tom; Colley, James; Greenhalgh, Chris; Mortier, Richard; Haddadi, Hamed (November 2016). "Enabling the new economic actor: data protection, the digital economy, and the Databox". Personal and Ubiquitous Computing. 20 (6): 947–957. doi: 10.1007/s00779-016-0939-3 . hdl: 10044/1/52734 .
  22. ↑ Tene, Omer; Polonetsky, Jules (April 2013). "Big Data for All: Privacy and User Control in the Age of Analytics". Northwestern Journal of Technology and Intellectual Property. 11 (5). Retrieved 20 August 2018.
  23. ↑ O'Neil, Cathy (September 6, 2016). Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy. Crown Publishing Group.
  24. ↑ "The world's most valuable resource is no longer oil, but data". The Economist. Retrieved 2018-11-20.
  25. ↑ "Proposal for a regulation of the European Parliament and the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation GDPR). COM(2012) 11 final" (PDF). European Parliament. Retrieved 20 August 2018.

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