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Data Protection Marketing Data and Privacy

At the crossroads: China, Europe & the US offer different 'internet freedom' models

By Arnaud Massonnie, Chief Executive Officer

Fifty-five London


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October 9, 2018 | 8 min read

How would you feel if your post about going to the gym gave you ‘points’ that count towards the quality of your housing? Or if your visit to your grandmother, deemed to be an act of intergenerational civic duty, counted towards getting social aid, or a better job. Or indeed, what would be your reaction to having your face displayed on a huge screen until you paid the fine crossing a road at an unsanctioned crossing point?

Internet economy montage graphic

How we decide to use data shapes the society we live in.

Sounds uncomfortable, right? But it is precisely the system for managing social governance that is currently being rolled out in China in their ‘Social Credit System’, leveraging mass surveillance via phone data, social media posts and CCTV cameras.

Such a Big Brother approach seems unthinkable to Western sensitivities. Indeed, the cultural norms in this scenario could not be more different to the ones we see in the USA. There, the fundamental belief that the best outcome will depend on individuals’ free decision-making is paramount. American society values the freedom of the individual to decide what they buy or not.

Businesses are therefore encouraged to take individual appetites into account to create personalised offerings based on the past actions that have been stored, re-formatted and monetised. There is no formal guide to the right way to use data in this version of the internet economy, but the assumption is that the marketplace will reward the companies that do the best job, and individual consumers will ultimately decide which companies win, and which ones lose.

This stark contrast in outlooks between the US and China illustrates the crossroads that we have arrived at in our relationship with the internet. The commercial power of the internet titans like Google, Amazon, Facebook and Apple (GAFA) is starting to cause governments to think about the economic and societal impact of these companies, which started as disruptors, but are now much more powerful than the companies that they disrupted and are becoming the new de facto ‘establishment’.

So far, so obvious. It will be argued how these companies be checked and governed, and whether that would be a good idea. But we should consider here the foundation upon which any commercial ‘engineering’ of internet companies might be based. What would be the motivation of any legislation? And how can that work in a world where outlooks are so different?

Three directions

At its heart, we have profoundly different value systems in the three dominant economic groupings of the US, China and Europe.

In America, power means, above all, having the possibility to act (the ‘can’) before getting the permission to change reality (the ‘may). ‘Yes, we can.’ Nowhere in the world is there a more pure – or more successful – embodiment of the power of choice, through which actions of economic players, naturally guided by individuals’ personal interests, contribute to the wealth and wellbeing of all. In digital terms, the effect of this has been the giving up of personal data for more freedom of choice, to serve the ongoing search for well-being – and its consumerist translation. It’s worth noting that, if this sounds like a trite conclusion to recent events, that this observation was made about the fundamental nature of American society by Alexis de Tocqueville two centuries ago in his Democracy in America.

For centuries, China’s social history has taken it in a very different direction, where everyone can be scrutinized. The Chinese Social Credit System currently being rolled out is a system of 'rating' individuals’ reputations, and reinforces this idea of power in China. It has been presented as a way of guaranteeing social governance, and relies on a mass surveillance tool (involving phone companies, social media posts, surveillance cameras) and uses a combination of face recognition, big data technology, and peer pressure. This social credit is much stronger than its American counterparts - credit history is based only on residents’ financial activity, and ratings, likes and reviews are only attached to our personas and avatars, not to our real-world identities. China’s collective Social Credit is the worthy descendant of Dang’an, a system of archiving performance and attitudes under Mao. Moreover, it is a child prodigy that revives the panoptic society from Foucault’s Discipline and Punish, where anyone can be spied upon at any time without their knowledge.

The absolute order that the Chinese government embodies is based on self-discipline and respecting norms on a huge scale, made possible by technology. Privacy is consequently disregarded, and becomes the bargaining chip with which everyone contributes to the nation’s unity and the population’s wellbeing.

Europe is taking a very different path from the US and China, by empowering its citizens and putting personal data protection above the interests of businesses and institutions. With the passing of GDPR laws, any European can give explicit consent (which can be withdrawn at any time) for the proper usage of his or her personal data. Among the legal arsenal that gives rights to citizens, the right to be forgotten (erasing all data collected by a given entity) and the right to portability stand out as notable.

The negative effects of monopolistic power among these Internet monoliths is also being openly argued among European governments and regulators in a way that is perhaps long overdue. We are seeing the ability of the GAFA companies to control access to information about choice, pricing and branding based on conformity to their digital ecosystem being investigated.

Europe, the crucible for democracy and capitalism, seems more aware than the US and China of the need to set the boundaries for how institutions and businesses can use the data of its citizens. With GDPR, there is an explicit recognition that power needs to be given back to the citizen to offer checks and balances against a non-transparent world of internet disruption that has recently shown the limitations of self-regulation. In the cases of Facebook’s facilitation of Cambridge Analytica’s targeting techniques, and other manifestations of monopolistic power, digital companies can leverage the combination of media, ecommerce and behavioural data to control our access to information, and this has a detrimental impact on the very basis of fair competition.

New answers

What we can hope for is a new breed of disrupters, who might create platforms based on the American titans but based on privacy by design. They might be run by volunteers and funded by donations like Wikipedia, or a system based on a symbolic fee in exchange for a non-intrusive world where data remains unsold, perhaps like the original WhatsApp.

We could see a domino effect of Europeans exercising their right to be forgotten, and then having their hearts – and their precious data – set on using new platforms which will guarantee the right to knowledge and control of their personal data.

It would be a recognition that in the knowledge economy, which is critical to success in the Twenty-First Century, there is no more important goal than the protection of the individual’s access to information that fairly represents the world around them. It is the role of governments not internet companies to judge how that information is fairly distributed, and this seems to me to be the crossroads at which we find ourselves. Victor Hugo wrote, ‘Power, willingness, knowledge, three works that run the world.’

Arnaud Massonnie is managing partner and co-founder of 55 and Richard Wheaton is UK managing director of fifty-five

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