Cognitivo PoV - Market power in the data-driven economy
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Data is the oil of the 21st Century, but data democratization is a term that is hard to get a handle on. Let's talk about democratization of "Data Proceeds"
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Cognitivo PoV - Market power in the data-driven economy
- 1. Balancing market power in the data sharing economy Nov 2019 contact@cognitivo.com.au www.cognitivo.com.au
- 2. Our lives are increasingly mirrored online 2 Online (facilitated) Interaction Wearables / IoT Digital Twin + • Over 2.5 quintillion bytes of data are created every single day and it’s only going to grow from there. • 90% of the world’s has been data created in the past 2 years. • By 2020, there will be more than 50b devices connected to the internet, that’s over 8 devices per person. • Humanity is undergoing a digital metamorphosis.
- 3. What you are interested in There’s a race to “monetise” data 3 What you buy Who you are Where you buy When you buy Where you go Those that are creating a data honey pot (with hopes of being bought out) Those using data to create a genuinely great experience to compete for customers
- 4. Consumers’ online attention is concentrated on certain channels 4 News outlets Rev: $136b USD Market Cap: 725b Rev: $55.8b USD M. Cap: 519b USD R $110.36b USD M. Cap: 779.7b R: $265.5b USD M. Cap: 700b Other (e.g. gmail) Search Youtube 20.5% Facebook Messenger Instagram WhatsApp 18.6% Office365 / Outlook.com 3.4% 2.3% 2.2% 2.3% Revenue $9b USD M. Cap ~8b USD R: $1b USD M. Cap: ~20b Source: Nielsen Digital Panel Feb 2019, Cognitivo Research Revenue and Market Value as at Dec 31 2018 Note: Time spent on other websites: 50.8% • US based search, content aggregators and social platforms dominate our online-attention • ~40% of all Australia’s time spent online relates to Google of Facebook • Telco’s are restricted to compete in this space • It is clear that traditional news / media / advertising firms cannot compete this is reflected in market values ShareofTimeSpentOnline
- 5. This concentration of market power is not unprecedented 5 • Standard Oil worth $1T in 1900 (inflation adjusted), controlled ~90% of the refined oil in the US. Broken up into 34 companies in 1911 • Microsoft found to have a monopoly, ordered to be broken into 2 (OS vs Software), later appealed and ordered to share API’s with 3rd parties. Source: GS.statcounter.com • Today, Google has >90% of the global search market and Facebook has ~70% market share in social media.
- 6. There are growing calls by politicians to invoke anti-trust legislation against digital giants 6 However, the world is a very different place today and the US isn’t the only competitor for leadership in the digital economy 1890
- 7. 7
- 8. Democratisation of Data “proceeds” is coming 8 Andrew Yang – US 2020 Presidential candidate • “It’s not like any of us wants to use the fourth- best navigation app” That would be like cruel and unusual punishment. There is a reason why no one is using Bing today.” • “We say this [data] is our property and we share in the gains, that’s the best way we can balance the scales against the big tech companies.” Democratisation is about how every citizen can benefit from a unique resource, without eroding the competitiveness of that very resource.
- 9. 3 key aspects of Data Market Power need to be in balance for healthy competition 9 Competition Data Protection & Privacy Consumer Protection Compatibility and portability of data increases competition Offering consumers choice and lower prices Consent options and disclosure that is easy for consumers to understand and are adhered to by businesses Competitive, data-driven markets competing for well-informed consumers on all dimensions of price and quality, including level of privacy protection Addressed by: Open Data Regulation Addressed by: GDPR / Australian Privacy Principles++ Source: Adapted from European Data Protection Supervisor (2014) and ACCC (2019) Addressed by: Anti-trust and Competition Laws
- 10. Deep mistrust in institutions, both governments and companies, will stifle innovation 10 Almost 10 per cent of eligible Australians have opted out of the My Health Record - Australian Digital Health Agency The future of the digital economy relies on trust, by both consumers and business users. The Productivity Commission has noted: People need to “feel they have some control over how their own data is used and by whom, and an inalienable ability to choose to experience some of the benefits of these uses themselves” - ACCC 47% of Australia distrust both Governments and the Media
- 11. Technology enables new business models and can be used to build consumer trust Differential Privacy Fine-grain Data Management & ABAC Homomorphic EncryptionConfidential Computing (SMPC) Distributed Analytics Safe Harbour Tokenisation R4 Tool Input parties Computation nodes Result nodes Result party Re-identification Risk Assurance Federated Learning Consensus & Micro-currencies OrganisationalModel Bus. ClassificationScheme Property Local Laws Stat Planning Health & Disability Parks & Infra Asset Mgt. Leisure & Sport Community Dev Sustainable Living Building Support Strategic Planning Projects & Strategy Common Functions Finance IT Legal Risk ConceptualDataModel Asset Customer Arrangement Event 1.CRM 2.Finance Org Sales HR Operations Corporate Services Event Asset Risk H M Data ObligationsLibrary Policylandscape: Privacy Records Retention & Disposal Confidentiality & PCIDSS
Hinweis der Redaktion
- https://www.socialmediatoday.com/news/how-much-data-is-generated-every-minute-infographic-1/525692/ Over 2.5 quintillion bytes of data are created every single day, and it’s only going to grow from there. By 2020, it’s estimated that 1.7MB of data will be created every second for every person on earth. Statistic about 90% world’s data created in past 2 yrs
- https://www.sec.gov/Archives/edgar/data/1652044/000165204419000004/goog10-kq42018.htm What do we does a domestic economy in aus to comepte with these guys? Digital products are global, australia doesn't play in this space What do we do with the telcos? They know everything but their value has been eroded by whatsapp – we could open a domestic capability to compete with this, we could set a regulatory framework to enhance local competitiveness against intl competitors
- A lot of the oil companies still survive today On June 7, 2000, the court ordered a breakup of Microsoft as its remedy.[19] According to that judgment, Microsoft would have to be broken into two separate units, one to produce the operating system, and one to produce other software components.[18][20] The D.C. Circuit Court of Appeals overturned Judge Jackson's rulings against Microsoft The proposed settlement required Microsoft to share its application programming interfaces with third-party companies
- Sherman act – was this the basis for breaking up the oil companies - We chat becoming a leader in NLP Dji is drones Ubitech robotics
- Competitiors in other markets have access to talent, data, a loose regulatory environment and they will develop capabilities and companies to support their economy for the next 200 years
- - democratisation of proceeds because data itself can be copied - it doesn't make sense to break up companies that are doing really well but we need competition, everyone should share in the gains - every citizen can benefit from a unique resource without eroding the competitiveness of that resource (e.g. the oil dividends – we want the digital dividend/data dividend)
- Ensuring market power is balanced Getting the balance between the three forces in the circles is vital – this is what the ACCC has to look at – considering perception of digital giants havin too much market power In the past, we have had initiatives e.g. me and my bank account online – MAMBO – about bank account portability, check if there Is something similar in europe, open banking, open energy and open telco Link to tech in next slide
- The future of the digital economy relies on trust, by both consumers and business users. As the Productivity Commission has noted Businesses, as much as governments, rely on the willingness of the public – the source of so much of the data – to continue to trust data handling and use. Against the background of an ocean of personal data that is already public, there is now, and will be in the future, a need for continued community acceptance and trust in the handling of personal data by both governments and business. Social licence will develop if people: have a sound basis for believing in the integrity and accountability of entities (public and private) handling data People need to “feel they have some control over how their own data is used and by whom, and an inalienable ability to choose to experience some of the benefits of these uses themselves” turn this into the competition slide Source: http://www.roymorgan.com/findings/7640-social-media-distrusted-june-2018-201806260211, https://www.theguardian.com/commentisfree/2018/jan/22/distrust-social-media-traditional-journalism-fake-news
- Fine-grain data mgmt & ABAC – build a conceptual data model and define your policy landscape to ensure effective data management R4 tool – quantify re-identification risk tolerance and evaluate a dataset for compliance with this tolerance level BEFORE data is released Distributed analytics – business models based on big data analytics are emerging – but considering the existing distrust on behalf of the consumers who provide the data, new techniques such as differential privacy and homomorphic encryption are likely to be important to reassure consumers that their data is being used safely Differential privacy – noise is added to real data in a way which ensures that the data distribution is maintained - so models can be reliably trained on it – but the data itself is no longer real data so a person’s real information is not leaked, even if a data breach occurs Homomorphic encryption – enables computation on ciphertexts, rather than real text, without affecting the results OpenMined – open source community working on these privacy preserving techniques, Cognitivo’s Melb director is the Australian country lead for this Homomorphic – cypher based encryption that enables an organisation to safely encrypt it’s data while a second party can perform some analytics over the top and will never know the details. SMPC – it’s an encrypted communications protocol. Federated learning – bring the model to the data – google keyboard