Consumers as data sheep ?: Digitization needs new rules – politics

– Dennis J. Snower is Chair of the Global Solutions Initiative, Professor of Macroeconomics and Sustainability at Hertie School, Berlin, and Senior Research Fellow at Blavatnik School of Governance, Oxford University. From November 10, the Global Solutions Initiative will broadcast an online debate on the future direction of digitization on its website (, which also includes Christian Kastrop, Secretary of State at the Federal Ministry of Justice and Consumer Protection, takes part.

Thanks to an unwanted stress test, the corona pandemic has evolved into an accelerator of the digitization of all areas of life – from business to education to private life. The zoom conference in the home office instead of the meeting in the conference room, online orders from the couch instead of shopping in the city, a spontaneous video conversation with grandma instead of the time-consuming visit – digitization has shown its advantages here.

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But at the same time it also has negative sides, which became increasingly clear before the corona pandemic: fake news undermines democratic processes and endangers the cohesion in society. Large digital companies such as Google, Amazon and Facebook form monopolies, jeopardize the functionality of the economic system and avoid tax payments. Cyber ​​criminals cause billions in damage.

Digital technology permeates everyday life and has a disruptive effect. And the problems that arise are considerable, because the current data regime is based on a kind of digital horse trade: the service is free to use, but you give your data to the provider.

The problem is that users cannot appreciate the value of their data. So you do not know whether the service received is appropriate. You lose control of your personal information without realizing the consequences. And the consequences are serious: the digital monopolies control our attention and structure our social networks – primarily with the aim of generating revenue for advertisers and other influencers without us immediately noticing. This undermines economic, social and political freedoms. This is a threat to society as well as to a competitive market economy.

At the same time, this opens the door for manipulation of democratic processes. To solve the existing problems while preserving the benefits of the current system, a fundamental course correction is needed quickly. Digitization can only bring benefits if it succeeds in eliminating the inefficiencies and injustices that the current set of rules entails.

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The economic, social and political freedoms in the digital space should be kept in mind and promoted more strongly. This means that people must have control over their personal information. Politicians must therefore adjust the right levers, ie further develop the European General Data Protection Regulation in the right places, to make the digitization of a double-edged sword a real success story.

Giving control of their data back to the user means balancing the power and information gap between the user as a data generator and the platform provider, in the sense of “leveling the playing field”. One approach could be to strengthen users’ participation and representational power, in addition to direct control over data. Just as trade unions or consumer lawyers represent and negotiate collective interests, this principle can be applied to the digital space.

New categories: official data, collective and private

A precondition for this is a new system of categories on how to handle which data. This could look like this: There is ‘official data’, such as name and date of birth, which is authorized by the state and which is decided by the user alone. And there are “collective data”. These are shared voluntarily by users with a specific group of people and for a specific, predetermined purpose. This includes, for example, the corona contamination data in the alert app or the publicly available data on social media profiles. The third category is “private data”. These are not collective and do not require authentication by an authority. This type of data can be generated by the user himself, for example location data of the mobile phone, or data and data patterns generated by external parties, such as motion profiles.

The knowledge advantage of digital service providers is great, especially when it comes to generating, processing and using collective and private data. It is all the more important that the user is not left to his own devices, but has an institution on his side that looks after his interests and negotiates on an equal footing.

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At the same time, the platform providers’ monopoly leads to distortions of competition. Here too, politics must be adjusted afterwards. In the meantime, it is often no longer an option for users to log out of services and delete their own profile. There is a lack of alternatives and social participation would be made more difficult.

Therefore, not only does direct or indirect participation power need to be strengthened, but regulations at EU level must also be adapted. With comprehensive legal protections for users and a competition regime that ensures the same rules are adhered to online and offline, the power of the major digital companies can be limited. Only if such a comprehensive rearrangement is successful can digitalisation lead to real social progress – not primarily increase the profits of digital service providers.

Consumer protection is more power over its own data

When people gain power over their data, competition is encouraged, because only then will challengers in the market have a real chance against the established top digital dogs. At the same time, the use of personal data for commercial and political manipulation is prevented. In practice this would be consumer protection. It would also respect fundamental rights that are undermined and regularly violated by the current model.
The state and thus society would also benefit financially from this reshuffle, as the problem of profit shifting and related tax avoidance by global companies has increased as a result of increasing digitalization. If people had sovereignty over their data, that would be a stop.

At the same time, increased transparency makes it possible to generate new sources of tax revenue, for example in the new information markets. And finally, the rearrangement of the data regime also promotes new opportunities for economic innovations. It offers new opportunities for education, training and a restructuring of the labor market. Empathy and solidarity are also becoming basic values ​​in the digital space, instead of the hatred that is prevalent in many places today. In short: the rearrangement of the digital sphere would lead to more humanity. And that’s what digitization needs to become real progress for humanity.

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