How consumers could regain sovereignty over their data on the web
The third digital panel discussion on Revisiting Digital Governance is now online. With contributions from Dennis J. Snower (Global Solutions Initiative), Gabriela Ramos (UNESCO), Cornelia Kutterer (Microsoft), and Jason Furman (Harvard University).
Berlin, March 22, 2021 – How should states and companies deal with the data that consumers generate or disclose online? Renowned experts discussed this in a series of digital events hosted by the Global Solutions Initiative. The third session focused on the prerequisites and limits of international approaches to joint action. The participants agreed that states must enter a discourse on how to ensure that digital service providers use users’ data in an ethically responsible manner in the future. Participants of the discussion, moderated by Sabine Christiansen, were:
- Prof. Jason Furman, economist at Harvard University and former advisor to former U.S. President Barack Obama,
- Cornelia Kutterer, Senior Director European Rule of Law & Responsible Tech at Microsoft, responsible for government relations,
- Gabriela Ramos, Assistant Director-General for Social and Human Sciences at UNESCO; and
- Prof. Dennis J. Snower, President of the Global Solutions Initiative and, among other things, Senior Professor of Macroeconomics and Sustainability at the Hertie School of Governance.
The recording of the digital panel discussion is now published on the Global Solutions Initiative’s website. Prof. Dr. Christian Kastrop, State Secretary at the German Federal Ministry of Justice and Consumer Protection, which supports the event series, summarized the previous discussion rounds. He emphasized the need to significantly strengthen consumer protection in the “Digital Services Act” proposed by the EU Commission in December and warned that consumers’ trust in the responsible handling of their personal data is a prerequisite for digital technologies’ lasting success.
The problem: Non-transparent digital barter
The starting point for the discussion is the working paper “Revisiting Digital Governance,” published in the fall of 2020 at the University of Oxford’s Blavatnik School of Governance. In it, authors Dennis J. Snower, Paul Twomey (former head of ICANN – Internet Corporation for Assigned Names and Numbers), and regulatory expert Maria Farrell analyse how personal data is increasingly becoming a surrogate currency for digital transactions: Users for example exchange their personal data with service providers for e-mail services or journalistic content. The digital service providers then monetize this data in the form of personalized, targeted advertising. To increase their commercial success, service providers formally educate their users, attract more and more of their attention, and reward existing users for attracting new users to the networks. “Internet companies are literally breeding their users in this way,” criticizes Dennis J. Snower, president of the Global Solutions Initiative.
In contrast, the existing mechanisms for doing business – exchanging money for services or goods – cannot be applied. The shadow economy of digital barter leads to a lack of transparency both for national economies (for example, it does not appear in the gross national product and is not taxed) and for consumers, who cannot gauge the actual monetary value of their data.
The solution: Three categories of personal data
Snower, Twomey and Farrell call for consumers’ data on the internet to be better protected from non-transparent and unauthorized use by digital service providers. To this end, they propose three different categories of data, each subject to varying levels of protection:
- Official personal data that may only be authenticated by authorities, such as name and date of birth. Only the involved internet users decide on their disclosure and use.
- Personal data, such as location data, résumés or order history. These should be subject to the sole control of the users and used only in their interest.
- Collective data which clearly defined groups in aggregated form may use, provided that the users from whom this data originates give their prior permission. This includes, for example, data for collectively created maps or health data for research purposes.
This precise categorization is the basis for reorganizing the business relationship between consumers and service providers, Snower said in the panel discussion. Countries that move forward on this would attract innovation and business, he said. The need to develop a common understanding of the problems across countries and a convergence of possible solutions are prerequisites, Gabriela Ramos (UNESCO) explained.
The discussion on “Revisiting Digital Governance” will continue at the Global Solutions Summit on May 27 and 28, 2021. This summit brings together high-level representatives from politics, academia, business, and civil society from G20 countries every year.
Christoph Podewils, Director of Communications