Data regulations such as the European Union’s General Data Protection Regulation (GDPR) can “cause friction” for businesses selling products and services over the internet, according to data Stephen Brobst, Chief Technology Executive at business analytics provider Teradata.
Under GDPR laws, businesses that fail to adequately handle and protect the personal data belonging to their customers that they store can be fined up to €20m or 4% of global annual turnover. Likewise, any data collection must be made clear to the customer and agreed to in advance.
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While GDPR has been in the spotlight, similar regulations have been put in place around the globe. Australia introduced the Notifiable Data Breaches Scheme in February, while the US state of California recently passed The California Consumer Privacy Act.
These directives are designed to give citizens greater control over the collection of their data.
It is widely accepted that consumer data regulation is positive, and in some cases a necessity, given the scale of data breaches and uses of data that have come to light in recent years.
Speaking to Verdict at Teradata Analytics Universe 2018, an annual coming together of Teradata and its customers, partners and tech industry leaders, Brobst said:
“GDPR is a step in the right direction. It gives more transparency about how data is being used. I have more rights, like the right to be forgotten and so on.”
Consumer privacy comes at a cost
However, making it more difficult for businesses to collect data, or withholding data entirely, can come at a cost for consumers.
According to Brobst, some parts of GDPR are “counterproductive” and not always in the best interest of the consumer.
“There are some things in GDPR that I think are counterproductive,
“If you follow GDPR to the letter of the law, every time you collect a piece of data, every time I come to your website, you would have to ask me ‘Can I collect data on you for this session?’. This to me is stupid, because as a consumer, if I trust your brand, I’m going to say ‘Yes, I agree, you can collect it. Don’t ask me again, and if I change my mind, I will tell you.’”
According to Brobst, regulations such as GDPR put barriers between businesses and consumers. While data collection is more transparent, it can come at a cost for consumers through loss of services such as recommendations and targeted advertisements.
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“It creates so much friction for doing commerce. I [businesses] don’t even ask [for permission to collect data] because the value of the data isn’t worth the restrictions that I caused in doing commerce. So then you lose the opportunity to have the data, and without the data you can’t serve the customers well.
“I like that eBay makes good recommendations for the things that I can buy. That’s better than getting random recommendations for stuff that I don’t want to buy.
“You know they’re going to do the advertising anyway. It’s a matter of how relevant is it, and I’d rather have relevant than not relevant.”
A consumer’s choice
“The pendulum is shifting,” Brobst said on the current state of data regulation.
However, much like a pendulum, data regulation seems to have swung from one extreme to the other. While it was previously difficult for consumers to opt out of data collection practices, regulations like GDPR can now make it difficult for consumers to opt in.
“Eventually there’s going to have to be a balancing of what is in the best interest of the consumer. Not just the extreme, paranoid activists that don’t want any data for any reason.
“I like that Netflix makes good recommendations. Some people say ‘No, I don’t want them to know anything about me’. Ok, you should have that right, but I should have the right to say ‘Yes, I want them to know, and don’t cause too much friction to allow me to do that’.
“There’s gotta be a balance.”
Big data ethics
Incidents like the Cambridge Analytica scandal, in which Facebook user data was used to profile and target voters in the run-up to the 2016 United States presidential election, as well as large-scale data breaches involving companies such as Equifax, Ticketmaster and British Airways, have cast a shadow on big data in 2018.
However, Brobst doesn’t think that the mistakes of some shouldn’t reflect badly on the data analytics industry as a whole.
“Any tool can be used for good or for bad, right? It’s the reality.”
When done in the right way, consumers have little to fear of data collection. Not only does Teradata work with its partners to ensure effective regulation compliance, but also that they’re using data in the right way.
“It’s not only that you’re compliant in law, it’s that you’re doing the right thing,” Brobst said.