Michael Hopp of Plesner explores the importance of Big Data.
" Big Data raises some legal privacy issues that governments and the European Union have tried to cope with, but the real potential and the real issues of Big Data have not yet been revealed."
Big Data is commonly defined as data sets with sizes that require special software tools to handle. Traditional software tools to capture, manage, search, share, transfer, analyse, visualise and process data fail to handle Big Data. Today Big Data sizes range from a few dozen terabytes to many petabytes of data in a single data set – and are constantly growing.
Despite the recent rapid development in the field, Big Data is not a new concept. Back in 1944 in his book The Scholar and the Future of the Research Library, Fremont Rider predicted that the amount of data in the world would increase exponentially. In the 1960s, BA Marron and PAD de Maine invented a solution to handle the increasing amount of data. Their new computer system was able to increase the rate of information transmission. Since then engineers, inventors and experts all over the world have used the basics of Marron and de Maine’s system to develop and improve the handling of data. In the 1960s the issue was to create a system to organize the increasing amount of data, which had made it too difficult to find and use physical data stored by companies and public authorities.
Over time the issues on Big Data have changed. Today organising and systemising Big Data is no longer a major difficulty. Challenges on how to use the Big Data, and how to control and limit the use of Big Data, are present concerns. The main focus in this article is the role and value of Big Data in connection with marketing and personal data protection.
Companies are obviously well aware of the value of Big Data, and big-data systems like A/B-tests and Data Mining are being used to aim customised marketing at a specific market segment and to figure out which persons will be possible buyers of specific products.
In a historical aspect the trend shows that Big Data systems are no longer used just for analysing data but also to make reports for marketing strategies. Furthermore the modern systems are able to store, analyse, process and contain all the data available.
Seen from a marketing perspective the value of Big Data has increased exponentially with the number of consumers with access to the internet. Consumers’ use of the web and not least internet shopping are the main reasons for companies’ interest in Big Data. The internet has led to new possibilities to use and collect personal data. For instance, cookies, where the consumers leave a track behind them when they visit websites, has created a whole new range of marketing strategies.
Social networks and forums such as Facebook and Google have given companies access to unique personal information and data on the users, and given marketing a whole new dimension. Social forums and networks make people reveal details such as age, job, interest and civil status, etc, giving companies even better possibilities to customise the marketing.
Big Data is of huge value for Google, Facebook and a large number of companies, and contributes to a fair part of their annual profit. Despite the internet’s role in the rapid development of Big Data and new marketing strategies, Big Data can also be of value for “offline” companies. Physical shops as well as online shops can now compare the consumers receipt to the member-card or user-profile and customise the marketing based on the consumer’s profile.
Big Data and the use of consumer data have drawn attention to issues regarding privacy. The Data Protection Directive 95/46/EC is the legal framework on privacy in the European Union, and sets out rules for the use of Big Data, together with the ePrivacy Directive (2002/58/EC as amended). In accordance with the Data Protection Directive EU member states shall protect the fundamental rights and freedoms of natural persons and in particular their right to privacy with respect to the processing of personal data. Big Data containing personal data on natural persons must comply with the rules set out in the directive. Even if there are no personal data, the Big Data may be collected via cookies and similar technologies and hence be subject to the ePrivacy Directive.
Since personal data is any information relating to an identified or identifiable natural person (one who can be identified, directly or indirectly, eg, by identification number or by physical, physiological, mental, economic, cultural or social identity), a lot, though not all, of the data of marketing value for companies are deemed personal data.
One of the major obstacles in using Big Data is the principle of finality. The principle of finality sets out that data must be collected for specified, explicit and legitimate purposes and not further processed in a way incompatible with those purposes. The principle interacts with the principle of proportionality. The proportionality principle prevents the personal data to be used excessively in relation to the purposes for which they were collected. Thus companies and public authorities are restricted in the use and processing of personal data in their databases, including the reuse, transfer or sale of data. On the other hand, a company using its marketing database to make Big Data analysis and address further marketing on existing customers would, depending on the circumstances, not contradict the legitimate purposes of collection.
The principles of proportionality and finality would often prevent the companies from selling personal data to other companies, for the purpose of the latter’s Big Data analysis. The sale of Big Data is not excluded though and with the consent of the customer or anonymisation of the personal data the sale of databases would be possible.
Consent is any freely given specific and informed indication of wishes from the consumer to the processing of personal data. The consent must be obtained before selling the database. If the consent to the sale of personal data were not obtained when building the database, a new consent must be obtained later on. Due to the nature of Big Data, involving huge amounts of data on a large number of customers, acquiring subsequent consent would be costly, time-consuming and practically impossible to obtain. Furthermore the consent must be given to the possible future sale of personal data and to the Big Data analysis by the buyer. Thus the company obtaining the consent must be very specific in defining for what present and future purposes the personal data might be used.
Besides obtaining consent from the consumer, the sale of databases can comply with the privacy rules if the personal data is anonymised. The anonymisation must as a main rule be so efficient that the consumer cannot be identified in any way. That process itself contains certain difficulties, but is possible. The value of an anonymised database and the costs of the anonymisation process are factors that make trading in anonymised databases less attractive for companies.
The above mentioned sales process of a database involves the transfer of personal data from one data controller to another. Further, other parties than the seller and the buyer of the database have access to personal data. Data brokers are companies collecting and maintaining personal data for the purpose of sale. Through outsourcing contracts the data brokers collect the data from the original source or with other means from secondary sources. The European Union legal framework does not in detail regulate the work of data brokers, and they act in a grey area of the personal data rules.
The legal grey area in which the data brokers act and the general personal data issues related to the sale of databases are some of the factors that determine the future of Big Data. Some might say that Big Data has not yet shown its real potential and that it is highly overrated. The coming years will show if the sceptics or the optimistic database trading companies are proven right in their predictions on Big Data. Until then, we can only conclude that Big Data is rapidly growing in size and is being acknowledged as an important topic by a number of national governments. The European Commission has estimated that the volume of digital data is increasing by 40 per cent every year, and estimated that releasing the public sector’s data would benefit private companies by €140 billion annually.
In a historical perspective we have moved from systemising and organising data, to today’s complicated analysis of Big Data. Big Data raises some legal privacy issues that governments and the European Union have tried to cope with, but the real potential and the real issues of Big Data have not yet been revealed.