Tech and mobile companies want to monetise your data ... but are scared of GDPR
Are you guys also feeling a bit teary and sad for those poor, poor businesses?
The vast majority of technology, media and telecom (TMT) companies want to monetise customer data, but are concerned about regulations such as Europe's GDPR, according to research from law firm Simmons & Simmons.
The outfit surveyed 350 global business leaders in the TMT sector to understand their approach to data commercialisation. It found that 78 per cent of companies have some form of data commercialisation in place but only 20 per cent have an overarching plan for its use.
Alex Brown, global head of TMT Sector at Simmons & Simmons, observed that the firm's clients are increasingly seeking advice on the legal ways they can monetise data. He said that can either be for internal use, how to use insights into customer behaviour to improve services, or ways to sell anonymised data to third parties.
One example of data monetisation within the sector is Telefónica's Smart Steps business, which uses "fully anonymised and aggregated mobile network data to measure and compare the number of people visiting an area at any time".
That information is then sold on to businesses to provide insight into their customer base.
Brown said: "All mobile network operators know your location because the phone is talking to the network, so through that they know a lot about people's movement. That aggregated data could be used by town planners, transport networks, retailers work out best place to site new store."
However, he added: "There is a bit of a data paralysis at the moment. GDPR and what we've seen recently in terms of enforcement – albeit related to breaches – and the Google fine in France... has definitely dampened some innovation."
Earlier this year France's data protection watchdog fined Google €50m for breaching European Union online privacy rules, the biggest penalty levied against a US tech giant. It said Google lacked transparency and clarity in the way it informs users about its handling of personal data and failed to properly obtain their consent for personalised ads.
But Brown pointed out that as long as privacy policies are properly laid out and the data is fully anonymised, companies wanting to make money off data should not fall foul of GDPR.
Simmons & Simmons' survey also revealed that 53 per cent of TMT companies think they need to improve their understanding of data privacy regulation. Meanwhile, just 31 per cent of respondents said they had updated their communication to customers on data collection and use in the last two years – despite a number offering financial incentives and offering a more personalised service to incentivise data sharing.
Brown noted that lawyers will have rewritten the privacy policies to align with regulatory changes. "But what they are perhaps telling us is they are not talking to customers in different ways. And that comes down to the value exchange: your data for what?
"The survey indicates there is still focus on data being used in ways that are of benefit to the company, like personalised marketing. That is largely about the benefit to the company, rather than the user."
"But if you don't engage customers and deliver value, why would they sign up [and allow their data to be used]?"
Why indeed. ®