Trend 2015: Redefinition of Privacy

We are living in an age of disposable technology. The cost of technology has come down to a level where each and every product can be equipped with sensors and an internet connection – and is in the process to: from shoes to shirts, toothbrushes to keychains, home thermostats to traffic lights and employees and their interaction at work. Analyzing the vast amounts of data collected enables the development of algorithms with the potential to improve the quality of life for millions of people all over the world in a groundbreaking way: early detection of diseases, personalization of medicine, optimization of traffic flows, or revolutionary new ways of research are only a few examples of how the Internet of Things on the basis of Big Data will fundamentally impact every domain it touches.

As always, however, the previously unimaginable potential of technological development goes hand in hand with significant threats: the abuse of personal information, suppression of political opponents and the obstruction of civil liberties have not remained just hypothetical downsides of such an environment. The pace of the development will only accelerate in the coming years along with the tensions already experienced in the last few years. A transparent set of rules (both legal and technological) governing the use of data will determine whether the revolutionary benefits of technology can be reaped or whether conflicts and radicalization will limit its potential.

Affected Industries: all

Intro

In the spring of 2008 an angry customer demanded to speak to the manager of a Target store just outside of Minneapolis. Clutching coupons for baby clothes and cribs his daughter had received in the mail at the clerk he complained: “Are you trying to encourage her to get pregnant? She’s still in high school!”. When the manager called the man a few days later to apologize, the father was somewhat abashed. He had talked to his daughter in the meantime and she had confessed to him that she actually was pregnant and she was due in August.

How has Target been able to know about the pregnancy which was a secret even to her father living under the same roof? A simple explanation would be that she gave herself away by purchasing a pregnancy test or obvious baby care products at Target, landing her in the marketing segment for pregnant women. But that was not the case. The answer lies in Target’s data mining efforts led by Andrew Pole, a statistician hired in 2002.

As pregnant women are particularly receptive to habit forming changes in behavior, identifying this target group was one of the objectives Pole and his team was working on. They identified a set of 25 products like zinc food supplements, scent-free soap, a purse large enough to double as a diaper bag and a bright blue rug, enabling them to predict an 87 percent chance of pregnancy with a due date sometime in late August.

 

Big Data and Privacy: Algorithmic Regulation

Almost all of the tech trends identified by us for 2015 center around measuring and analyzing a diverse set of data points to identify patterns in huge data sets (Big Data) in order to develop algorithms driving context-sensitive reactions: ubiquitous sensors (Trend: Quantified Self) enable the build-up of unlimited pools of data, further enriched by the blurring of online and offline (Trend: Blurring of Online/Offline), enabling the context-sensitive adaption of our environment to the users’ needs without requiring the user to express those needs explicitly (Trend: Pro-active Experiences). It’s hard to overestimate the ramifications of these developments on our understanding of privacy and on almost every business model.

In an environment based on algorithmic regulation correlations might determine the individual’s options instead of causalities: the purchase of a particular combination of magazines might impact my credit rating negatively, as the default risk of consumers with a similar set of magazine choices might be particularly high. The metadata generated by us in all our interactions is more revealing than we might know. Facebook can impact the outcome of elections and our Likes can enable correlations between our preference for curly fries and our intelligence:

We are living in an age of disposable technology. The cost of technology has come down to a level where each and every product can be equipped with sensors and an internet connection – and is in the process to: from shoes to shirts, toothbrushes to keychains, home thermostats to traffic lights and employees and their interaction at work.

In this Internet of Things for the first time in 2008 more things were connected to the internet than people living on the planet. In 2010 more than 12.5 billion things were hooked up to the internet already and Cisco predicts that this number will rise to 50 billion things in 2020. A Dutch company, for example, is equipping cows with sensors enabling the health monitoring and pregnancy identification via internet, generating 200 MB of data per cow and year in the process.

A not too distant vision of the future of data-tracking, supplied by billions of sensors from toothbrushes to cereal boxes, and their use for gamification and the setup of incentive structures for desired behaviors is provided by Jesse Schell in his highly entertaining yet thought provoking talk from minute 1:36 on:

 

Personal Health Data

Fitness trackers are collecting a wealth of data to enable its users to optimize their daily routines for a better health. Or for the reduction of their health insurance premiums: a host of insurance companies have started pilot projects, incentivizing clients to share their fitness tracking data with them in exchange for better rates. Although sharing of this kind of data is voluntary, the implications of these developments are obvious: with mass-market proliferation of fitness trackers the voluntariness of sharing the data will erode very quickly. If money can be saved by sharing the information and being in good health, not sharing the data will raise the suspicion that apparently the client has something to hide, placing them in a higher risk and higher premium bracket than those who are sharing their data. The tipping point for eroding the solidarity system of an insurance company is close at hand.

The collection of health data will not be limited to the surface of the body: sensors will be ingested, delivering data wirelessly in real-time from the brain, stomach and bloodstream. They can warn of heart attacks before they happen, administer just the right doses of medicine, monitor pacemakers without requiring surgical interventions and much more.

The cost of sequencing a single DNA have come down to as little as USD 1.000 from USD 3 billion 13 years ago, enabling the identification of risk factors and appropriate counter measures. This poses the most fundamental questions regarding the privacy and use of this information and the business models related to it. Although in the best interest of both clients and health insurance providers in the long term for the sake of preventing serious diseases and expensive treatments, the short term impact on insurance providers could be the opposite: high risk patients might end up booking appointments with a doctor and receiving preventative treatments, creating costs for the insurance companies they wouldn’t have incurred without the DNA sequencing.

Movement Profiles and Location Information

Cars are already equipped with a multitude of sensors, enabling the identification of traffic violations such as speeding. On the basis of this data, fines could be levied automatically without requiring the police to enforce this using speed controls. Insurance companies have seized the potential by offering special rates to clients sharing their driving data. This will result in the same automatism towards “voluntary” sharing as previously described for health insurance: drivers not willing to supply their data might be considered higher risks, resulting in a higher premium for the coverage.

Regulation might soon require car manufacturers to enable the police to deactivate cars remotely. Widespread automated license plate readers have turned the blanket surveillance and storage of location information into the default, capturing sensitive information of not just suspects and their cars but of everyone into the default mode. This location data reveals clues about the purpose of the journey based on the places visited and often also about who the journey was with:

That the abuse of this kind of data is not just a hypothetical threat has been demonstrated recently by the controversial mobility company Uber who threatened to release incriminating trip data of journalists writing critical articles about the company. These kind of movement profiles are compiled by mobile operating systems like Android and iOS alike and are the enabler of pro-active experiences.

A world without secrets?

In order to optimize internal processes and employee productivity, some companies have started to equip their employees with sensors documenting their movement profiles as well as the interaction with other employees, the tonality of the dialogues and the emotions associated with it. Chuck Jorgensen, who lead the research project for subvocal speech at NASA, is convinced that we are moving towards a world without secrets.

In this world, ubiquitous sensors, cameras and microphones are documenting and analyzing every possible clue that provides potential insights into what we are saying – explicitly and implicitly. While humans are influenced by the actual words – no matter if true or not – machines will be able to judge us based on biological factors out of our conscious control: facial expressions, micro-gestures, breathing rate, pupil eye dilation, gaze fixation, electromiographical tension of the muscle system, voice spectrum and many more, all picked up by sensors proliferating in the mass market. Based on all this information machines will be able to determine whether what we are saying is the truth and what emotions we are experiencing in real-time with a very high rate of accuracy. Judging by the number of lies each of us tells every day and by the significance of secrets in the political realms, it’s hard to fathom the extent of the consequences of these developments.

Conclusion

The ubiquitous collection of data through sensors and platforms permeating every fabric of our lives, their analysis, development of algorithms and incentives for optimization provide a seemingly unlimited potential for improving the life of millions all over the world. On the flipside, however, technological advances go hand in hand with the danger of abusing these powers:

“Technology is continually giving us ways to do harm and to do well; it’s amplifying both. It’s amplifying our power to do well and our power to do harm, but the fact that we also have a new choice each time is a new good.” Kevin Kelly

While Evgeny Morozov persuasively points out the dangers of these developments towards algorithmic regulation, Tim O’Reilly makes a compelling case in favor of it. No matter where you position yourself in this discussion, if you see the opportunities outweighing the risks or the other way around, one thing is for certain: the economical and political interests of these developments are so groundbreaking, that there is no way of stopping them. Becoming a luddite is certainly (again…) not going to help.

“Everyone will expect to be tracked and monitored, since the advantages, in terms of convenience, safety, and services, will be so great.” Hal Varian, Chief Economist at Google

Determining rules for the tracking of data and the distribution of the benefits reaped from their use will therefore be at the forefront of the debates in the years to come. A radicalization will have detrimental effects, limiting the potential of these technologies. It will therefore be key to create an information symmetry by providing transparency to the users and giving them insight into the use of their data. Without being able to judge the impact of the data collected and the ability to control what is being stored, trust will erode even further. This will put the very fate of the internet at peril – and the potential for the economical improvement and a more open society with it.

Companies collecting their users’ data will therefore have to provide them with a transparent overview of what is being stored – and the option to delete it. Google provides an example of how this can be done, giving every user access to its dashboard.

These corporate rules and codes of conduct will increasingly be supplemented by legal frameworks, such as the development of the General Data Protection Regulation in the European Union. Technological developments, however, will always be a step ahead of the legal regulations and are putting a lot of rules that used to apply to the test. Moreover, the global nature of the internet and the limitations of rules undermined by technology, require entirely new concepts to ensure the desired outcome. Premature legislation runs the danger of choking innovation or leads – as in the case of Europe’s “Right-to-be-Forgotten” verdict – to unwanted side-effects without actually achieving the goal in the first place.

“I expect that the dynamics of security and privacy are going to be a bloody mess for the next decade, mired in ugly politics and corporate greed.” Danah Boyd, Research Scientist at Microsoft

Given the powerful and diverging political and economical interests, it remains to be seen if the internet will become a pillar of an open and free society or if it will usher in the most efficient machinery for suppressing these exact values:

“The question is, are we ready and willing to fight for the Net as it should be in the name of civil rights and open communications? Or will we sit back compliantly, happily gobble down the occasional treats tossed in our direction, and watch as the Internet is perverted into a monstrous distortion to control speech and people alike, rather than enabling the spread of freedom.” Lauren Weinstein

In the light of the revelations about surveillance, blanket data collection and the erosion of privacy, the father of the World Wide Web, Sir Tim Berners-Lee, has initiated a discussion on what the internet means to us and on how we could develop a Magna Carta for the web. Although this won’t provide a guarantee for a desired outcome, it is an important first step to make our collective goals explicit and determine the framework required to implement them.

 

More Trends

Trend 2015: Pro-active Experiences

The proliferation of mobile devices lead Google CEO Eric Schmidt 2010 to its development mantra “mobile first”: every product developed by Google had to have the mobile experience and the mobile user as the starting point. Today, no company can afford not to offer experiences optimized for mobile. Websites still not meeting this requirement are even penalized in Google’s search algorithm, giving them less prominence in the search results.

Mobile optimization is therefore expected and doesn’t suffice for differentiation anymore. Recent developments are using mobile as an enabler to enrich the experience in a much more integrated fashion, taking into account all the information gathered by the smartphone 24/7: data on preferences, locations visited, daily routines and much more are all up for grabs with the goal of creating an omniscient companion. Users should not be required to explicitly state their goals anymore – the app should be able to infer the user’s intent and provide him with just the right information at exactly the right time. In this setup a user tells the system (explicitly or implicitly) only what he wants – not how to get it anymore, as the computer will be able to hide this complexity from the user.

Affected Industries: Travel, Navigation, Entertainment, Home Automation, Automotive, Software, Energy/Utilities, Insurance

Overview