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Who owns the web’s data?

The Economist | Brett Ryder | Oct 22, 2020

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The Romantic vision when Tim Berners-Lee had when he created the World Wide Web in 1989 were the halcyon days. Now the web risks falling into what he has called a dystopia of prejudice, hate and disinformation.

People around him talk of “digital feudalism” to describe the control big technology platforms have over data. As a result, Sir Tim has co-founded a startup, Inrupt, that aims to shift the balance of power. It is one of many incipient efforts aimed at putting data back into the hands of the people.

This sounds like a quixotic goal as some $1.4trn of the combined $1.9trn market value of Alphabet (the owner of Google) and Facebook, comes from users’ data and the firms’ mining of it, after stripping out the value of their cash, physical and intangible assets, and accumulated research and development.

See: House Lawmakers Condemn Big Tech’s ‘Monopoly Power’ and Urge Their Breakups

These companies' appetite for data is a concern for policymakers. The platforms’ business models depend on network effects and scale to keep users engaged and to sell more advertising. The result is a culture of virality that, while entertaining, poisons public discourse and disquiets governments. Economically, the bigger the tech firms are, the harder it is for potential rivals to overcome their data advantage, which suppresses innovation. Access to capital is no longer the biggest problem for startups. It is access to data.

Any solution must make data more evenly accessible so that potential rivals can grow. This can be done in several ways. One is to empower individuals. Another is to consider collective action. A third is to rely on governments. All three will need to reinforce each other to have a chance of success.

On an individual level, is hard to wrest control back from the tech platforms in practice because their bargaining power is woefully weak. Another option is to start gathering data on behalf of the individual from all sorts of sources. Inrupt, for instance, is working with the government of Flanders, a region of Belgium, to give every citizen a “pod” to store personal data.

“It hopes private firms will build user-friendly apps around the data, with people’s consent, says John Bruce, its co-founder.”

A second way to strengthen the power of those who provide data is by collective action. Glen Weyl, an economist at Microsoft, a software colossus, proposes “unions” that bargain on behalf of groups of people for a share of the income generated from the use of their data.  Andrew Yang, a former American presidential hopeful, has proposed a “digital dividend” to individuals via collective bargaining.

See: Future Market Dynamics Part 3 – data sharing, trust and a world of choice

These efforts, however valiant, are in their infancy. They may not amount to anything unless governments, too, weigh in. As with the American government, the eu continues to threaten the cudgel of antitrust law against the tech giants.

Silicon Valley says it has got the message. This year Facebook offered to pay users for recordings of their own voice, to improve speech recognition. The tech firms are making it easier for users to shift photo files to other platforms. Switching platforms remains fiendishly hard. Scale and virality are so vital to their business models that they lobby fiercely against regulation. They reassure themselves that most consumers continue to support the exchange of data for free stuff.

Yet they must be aware that access to data is becoming one of the philosophical issues of the age. Feudalism eventually gave way to greater property rights. One day data serfdom will go the same way, too.

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