Love of Data: The Root of All Evil

  |  February 27, 2014   |  Comments

The time will come when businesses - even American businesses - will have to reconcile themselves to data regulations as serious as those around banking, and develop ways to manage Other People's Data.

I never spend coins. I throw them in a box which I take to the bank about once a year. Although it's significantly smaller than a shoebox, it takes two hands to carry and adds about $250 into my savings account.

My ability to really save money didn't start until I developed the envelope method - cash the paycheck and divide the fives, tens, and twenties into envelopes with "bicycle," stereo," and "portable TV" on them.

Money that went into envelopes was out of circulation. It would not see the inside of my wallet until it was time to head to the store. It would never be transformed into movie tickets, restaurant meals, or pitchers of beer. It was already "spent."

Later, I put my money in the bank and kept a ledger with columns labeled by desire (car, couch, trip to Europe) and rows that matched my bank statement total.

When my wife and I were finally ready to buy a house, my relationship with money changed dramatically. Suddenly, I was using OPM: Other People's Money. The longer I used it, the more it cost. It took a while for me to get my head around "renting" money.

This was a scary enough proposition that I had trouble sleeping for months. It took a while to get used to living with a mortgage hanging over my head.

Who Owns the Data?

Like money, there's something intoxicating about data. A little knowledge is a dangerous thing, but lots of knowledge is power.

The cost of data collection used to be high enough to require organizations to only collect the data they could justify. Like cash in envelopes, it had to have a specific purpose.

But today, more and more organizations are amassing more data than they know what to do with, collecting it because it's just too cheap not to.

But having the data is not the same as owning the data.

If my data cluster contains a multitude of data points about you, I can aggregate, correlate, and extrapolate it for my own purposes. But at some point, I will face the fact that it is actually your data.

If this sounds like a foreign concept, just look outside the U.S. and you'll find it is a concept born of the rights of citizens and not the rights of companies.

The rules and regulations emerging overseas are focused on an individual's rights to

  • View the data you have about them
  • Make corrections to your data about them
  • Expect a high level of security around the data you have about them
  • Be "forgotten" if they no longer wish to be in your database

In some, more progressive countries, regulations will give individuals the right to move their data from your database to your competitor's should they be so inclined.

All of our fancy technology has trouble with the first three - we've been trying to bring all of our data about an individual together in one "source of truth" for decades with only modest progress.

But the American mind has trouble with that last one. Imagine the amount of lobbying in Congress if this idea is floated from sea to shining sea.

The time will come when businesses - even American businesses - will have to reconcile themselves to data regulations as serious as those around banking, and develop ways to manage Other People's Data.

Privacy By Design is coming.

It's time to start saving for that rainy day.

For more about the history of privacy in the European Union, see this European Privacy Overview infographic.


Jim Sterne

Jim Sterne is an international consultant who focuses on measuring the value of the Web as a medium for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, is the founding president and current chairman of the Digital Analytics Association and produces the eMetrics Summit and the Media Analytics Summit.

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