How can we pro­tect di­git­al con­sumers?

This article summarises a panel discussion at the CMS annual Technology, Media and Communications Conference 2018.

Every six minutes the average person looks at their phone, which equates to more than 150 times a day. It is a staggering statistic only matched by the realisation that there are reams of personal data constantly being created and stored on these phones that needs to be protected. However, securing ever-increasing amounts of data at a time when consumers are increasingly demanding control over their digital footprint is becoming a bigger challenge for regulators across the globe.

Charles Kriel, specialist adviser to the House of Commons Select Committee on Fake News says the recent fallout from Facebook’s data privacy scandal as well as other high-profile data breach events has resulted in consumers becoming increasingly uncomfortable about the amount of personal data that is being harvested by organisations and the opacity of what is actually done with that data. “It feels to me after that a little bit of the free ride is over and the frontier needs a bit of civilisation,” he says.

But how is that “civilisation” to be brought about and crucially is the protection of data to be considered a human or consumer right? The United Nations already has eight guidance principles for protecting data as a consumer right while the EU’s new General Data Protection Regulations (GDPR) sets out data policy as a human right. Dora Petranyi, managing director, central eastern European, CMS Europe, says regulators must carefully consider their roles given that data protection is now a global phenomenon that requires balancing policy with a workable data protection framework that can be properly resourced and policed. 

Mr Kriel says regulators worldwide currently have a variety of approaches, some more successful than others. “In the US, data privacy is a consumer right but the American consumer rights system is completely dysfunctional. Data privacy in the US is in a terrible situation right now and there doesn’t seem to be a lot of policy to address it,” he says.  However, in China, a completely different, and far more controlled, system is in place where data is collected and monitored through the phenomenon of the Chinese social credit score. This is a rating not only based on consumer credit scores but also on an assessment of how good and trustworthy a citizen is and how they express that and interact online.

While regulators try and strike the right balance the need for media and technology companies to get to grips with data protection is becoming ever more pressing as poor handling of personal information can destroy loyalty and trust in companies.  James Walker, chief executive and founder of Resolver, a free complaints tool, says many consumers contact his website over fears their data has not been handled properly.  He says that companies that fail to explain what they are doing with a customer’s data will lose their way, pointing to the recent failure of Wonga after it lost the trust of consumers and the regulator which resulted in a monitoring framework which made the payday lender’s model unsustainable: “That trust element once it is lost is very hard to rebuild.”

As ever the danger of doing nothing could mean more onerous regulation or taxation. Mr Kriel said talk about the greater taxation and regulation of the technology industry would not be necessary or recommended “if people had any trust for tech industry at the moment”, adding: “We have blown that trust. When we used to talk about disruption it was the new guy in room with a new toy that could so something cheaper and disrupted a market or supply chain. Now disruption is breaking the law, or destroying a community with [apps] employing people on minimum wage. It is any wonder we are dealing with this situation?” 

He said that while there may be an increasing trend for people to want to control their own data and own it, he believes the most pressing issue to regulate is how behavioural economics is used to manipulate people into their addictions – especially social media platforms: “When you go on Facebook – it judges how fast you scroll and what you do – every moment you are online they literally make more money and the idea is to keep you on as long as they can. You are playing chess with Artificial Intelligence and when you play against a computer you lose.” 

Authors

Picture of Dora Petranyi
Dóra Petrányi
Partner
Budapest