The future of data privacy – can we take control?

As users, we power the internet through our data. Be it social media, online searches or simple tasks like shopping which we take for granted, our online activities leave a trail of data that has value and is ready to be exploited.

Unfortunately, it has taken the likes of Facebook’s Cambridge Analytica scandal and data leaks affecting popular services such as LinkedIn and Instagram, amongst others, for many of us to realise that our data is not as safe as we had assumed and perhaps that we have been too trusting of the corporations who control our data.

With data privacy increasingly at the forefront of our consciousness, it is no surprise that businesses are starting to bring to market a range of services aimed at helping us take control of our data. Solutions tend to focus on allowing individuals to securely and privately go about their business on the internet without leaving a trail of data, or the ability to gather one’s internet data footprint into secure, encrypted ecosystems from which the individual can decide with whom and when to share their data, with the possibility of monetisation.

Part of the challenge in whether these solutions become mainstream is whether we are bothered enough to take the trouble to adopt them and thereby put pressure on those who exploit our data, or whether we are content that our data is the price we pay for convenience and ease of use of the range of services which are increasingly integral to our lives. Current evidence suggests the latter, given the relatively minute uptake of such solutions, although this may also be a function of their relative novelty. In the case of the former, monetising our data at an individual level, for example, poses a challenge in that it may not be as lucrative as we might assume. Facebook’s Average Revenue Per User (ARPU), for example, was just $7.37 in Q418, Twitter’s $6.20 in Q218 and Snap Inc’s $4.31 in Q318. Although it is not a directly relevant metric, these ARPU figures help to give a sense of what our data might be worth. Although these are global figures which vary regionally (users in North America, for example, command much higher premiums), there is still a question mark over whether figures in this range are enough inducement to cause individuals to act.

Where does the market go from here? This will depend on several factors, including how trusting we are of those who control our data and on the back of this mistrust, whether governments decide to legislate in favour of consumer data protection above and beyond GDPR in Europe, for example. Monetisation, in particular, will ultimately depend on whether a market with adequate supply and demand develops to create a price which is acceptable to individuals whose data is being used and to the end users of that data (how such a market might evolve, given the need to disintermediate entrenched interests, is anyone’s guess). A shift in any of these factors could provide the impetus for individuals to consider how to actively control their data, creating demand for the emerging crop of solutions aimed at helping us with this goal.

To speak to Zafar: zkanani@forburyinvest.com