This piece has been authored by Namratha Murugeshan, a final year student at NALSAR University of Law and member of the Tech Law Forum.

In 2006, Clive Humby, a British mathematician said with incredible foresight that “data is the new oil”. Fast forward to 2019, we see how data has singularly been responsible for big-tech companies getting closer to and surpassing the trillion-dollar net worth mark. The ‘big 4’ tech companies, Google, Apple, Facebook and Amazon have incredibly large reserves of data both in terms of data collection (owing to the sheer number of users each company retains) and in terms of access to data that is collected through this usage. With an increasing number of applications and avenues for data to be used, the requirement of standardizing the data economy manifests itself strongly with more countries recognizing the need to have specific laws concerning data.

What is standardization?

Standards may be defined as technical rules and regulations that ensure the smooth working of an economy. They are required to increase compatibility and interoperability as they set up the framework within which agents must work. With every new technology that is invented the question arises as to how it fits with existing technologies. This question is addressed by standardization. By determining the requirements to be met for safety, quality, interoperability etc., standards establish the molds in which the newer technologies must fit in. Standardization is one of the key reasons for the success of industrialization. Associations of standardization have helped economies function by assuring consumers that the products being purchased meet a certain level of quality. The ISO (International Standards Organization), BIS (Bureau of Indian Standards), SCC (Standards Council of Canada), BSI (British Standards Institute) are examples of highly visible organisations that stamp their seal of approval on products that meet the publicly set level of requirements as per their regulations. There are further standard-setting associations that specifically look into the regulation of safety and usability of certain products, such as food safety, electronics, automobiles etc. These standards are deliberated upon in detail and are based on a discussion with sectoral players, users, the government and other interested parties. Given that they are generally arrived at based on a consensus, the parties involved are in a position to benefit by working within the system.

Standards for the data economy

Currently, the data economy functions without much regulation. Apart from laws on data protection and a few other regulations concerning storage, data itself remains an under-regulated commodity. While multiple jurisdictions are recognizing the need to have laws concerning data usage, collection and storage, it is safe to say that the legal world still needs to catch-up.

In this scenario, standardization provides a useful solution as it seeks to ensure compliance by emphasizing mutual benefit, as opposed to laws which would penalize non-adherence. A market player in the data economy is bound to benefit from standardization as they have readily accessible information regarding the compliance standards for the technology they are creating. By standardizing methods for collection, use, storage and sharing of data the market becomes more open because of increased availability of information, which benefits the players by removing entry barriers. Additionally, a standard-mark pertaining to data collection and usage gives consumers the assurance that the data being shared be used in a safe and quality-tested manner, thereby increasing their trust in the same. Demand and supply tend to match as there is information symmetry in the form of known standards between the supplier and consumer of data.

As per Rational Choice theory an agent in the economy who has access to adequate information (such as an understanding of costs and benefits, existence of alternatives) and who acts on the basis of self-interest, would pick that choice available to them that maximizes their gains. Given this understanding, an agent in the data economy would have higher benefits if there is increased standardization as the same would create avenues to access and usage in the market that is currently heading towards an oligopoly.

How can the data economy be standardized?

The internet has revolutionized the manner in which we share data. It has phenomenally increased the amount of data available on the platform. Anyone who has access to the internet can deploy any sort of data on to the same – be it an app, a website, visual media etc. With internet access coming to be seen as an almost essential commodity, its users and the number of devices connected to the Internet will continue to grow. Big Data remained a buzzword for a good part of this decade (2010’s), and with Big Data getting even bigger, transparency is often compromised as a result. Users are generally unaware of how the data collected from them is stored, used or who has access to it. Although, sometimes terms and conditions concerning certain data and its collection specify these things, it is overlooked more often than not, with the result that users remain in the dark.

There are 3 main areas where standardization would help the data economy –

1. Data Collection
2. Data Access
3. Data Analysis

 

1. Data Collection – Standardizing the process of data collection has a supply and demand side benefit. On the supply side, the collection of data across various platforms such as social media, personal use devices, networking devices etc., would be streamlined based on the purpose for which they are being harvested. Simpler language of terms and condition, broad specifications of data collection would help the user make an informed choice about whether they want to allow data collection. Thereby, this would seeking permissions from the user by way of categorizing data collection and making the same known to the user. On the demand side, this streamlined data collection would help with accumulating high-quality data as required for specific usage by those collecting it. This would also make for effective compliance with as is required by a significant number of data protection laws across the globe. Purpose limitation is a two-element principle. It says that data must be collected from a user for “explicit, specified and legitimate” purposes only and that data should be processed and used only in a manner that is compatible with the purpose it is collected for. This helps purpose limitation because once data providers are aware of how their data is going to be used, they can make a legitimate claim to check the usage of it by data collectors and seek stricter compliance requirements.

 

2. Data Access – Standardizing data access would go a long way in breaking down the oligopoly of the 4 big tech companies over data by creating mechanisms for access to the same. As of now, there is no simple method for data sharing across databases and amongst industry players. With monetization of data rising with increasing fervor, access and exchange will be crucial to ensure that the data economy does not stagnate or have exceedingly high barriers to entry. Further, by setting standards for the access to data the stakeholders will be able to participate in discussions regarding the architecture of data access.

 

3. Data Analytics – This is the domain that remains in the exclusive control of big tech companies. While an increasing number of entities are adopting data analytics, big tech companies have access to enormous amounts of data that has given them a head start. Deep Blue, Alexa, Siri are examples of the outcome of data analytics by IBM, Amazon and Apple respectively. Data analytics is the categorization and processing of data collected and involves putting to use the data resource to achieve the goal of creating newer technologies to cater to the needs of people. Data analytics requires investment that is often significantly beyond the reach of the general population. However, data analytics is extremely important to ensure that the data economy survives. By consistently searching for the next big thing in data analytics, we have seen the advent of Big Data, Artificial Intelligence and Machine Learning (a subset of AI) so far, indicating that investments in data collection and processing pay-off. Further, data analytics has a larger implication on how we tend to work and what aspects of our life we let technology take over. The search for smarter technologies and algorithms will ensure that the data economy thrives and consequently have an impact on the market economy. Standardization of this infrastructure would ensure fairer access norms and usage of collected data.

With the increasing application of processed information to solve our everyday problems, the data economy is currently booming; however, large parts of this economy are controlled by a limited number of players. Standardization in this field would ensure that we move towards increased competition instead of a data oligopoly, ensuring increased competition that will ultimately lead to the faster and healthier growth of the data economy.