“Data: Facts and statistics collected together for reference or analysis

Privacy: The state or condition of being free from being observed or disturbed by other people”

In certain ways, the idea of data privacy is nearly oxymoronic — the collection of data necessarily requires observation, while the freedom from observation constitutes privacy. Both terms are valuable in two distinctly different ways. Data provides actionable insight and predictive capacity that can be used in a vast array of applications. In contrast, privacy allows for individual freedom, and can be ascribed intrinsic value, comparable to other human rights. Thus, the term data privacy actually refers to the tension between data and privacy, a tension which is often masked by differences in power between individuals and centralized institutions.

Recently, public discourse over Facebook’s practices and the EU’s implementation of General Data Protection Regulation (GDPR) has highlighted the opposing nature of the two terms. Moreover, these events have drawn attention to the value of privacy, which remains primarily conceptual and theoretical, perhaps hiding in the abstract due to its status as an assumed entitlement. Or maybe our general trust in institutions leads us, whether we are fully aware of it or not, to willingly forgo our privacy for services. After all, who has time to read the Terms of Service before accepting anyway?

Over the last decade, advancements in technology (as well as shifts in cultural habits) have led to an explosion of both the perceived and actualized value of data. In fact, this phenomenon has enabled the emergence of some of the largest, most powerful companies in the world. In an era of data supremacy, some company business models have morphed into the following:

Provide a service to secure eyeballs, engagement, and collect information -> sell that information to advertisers. In such a case, what is truly the company’s product and who are its customers? Is the company’s data not the product and are the advertisers not the consumers?

Privacy is a pivotal issue of sustainability since, similar to natural capital or ecosystem services, it is invaluable but difficult to explicitly value in the contexts of markets. Further, it can be easily exploited, resulting in wealth transfer/concentration, income inequality, and the misallocation of capital. If the data-privacy balance is under threat, which recent events suggest it has been, the reaction from society could have tremendous impacts on the real economy. In fact, part of the pushback against the broadly centralized, data-gathering institution model has likely already manifested itself, driving demand and enthusiasm for cryptocurrencies. After all, a decentralized model may have the potential to disarm the monetization power of big data, or the monopoly power of some of today’s tech giants.

Where do we go from here? Historically and at present, there exists the ability to monetize data but not privacy. Will this change going forward? Privacy can be further unpacked by the notion of sharing and control. When you search your name in google, you may have certain links that populate that you’d rather not populate, amongst others you are totally fine with — yet you are powerless to specifically control what you share.

Unlike data, privacy is individual in nature, and consequently cannot be scaled. Data held in a decentralized manner and accessible only by the source (the subject of the data) may change the balance of power between data and privacy. Specifically, company margins that are upheld or in some cases completely enabled by the monetization of user data may be under threat, as that business model may prove unsustainable. Facebook wants permission to use facial recognition on me? That will be $5 please!