Data Use and Protection in the Age of Digital Multi-Platforms

By on

Click to learn more about author Carlos Cruz.

In the age of digital transformation personal data becomes a precious asset while new business emerges. Informational symmetry approaches all industries; technological barriers have fallen; and the real competitive advantage in this scenario is knowing how to combine various technologies, and high-volume and platform-based business strategies.

Online markets are now dominated by organizations that have the ability to capture customer attention, data, and behavior, considering the different contexts and use of data within each industry.

Platforms represent fluid and multidimensional concepts when using data from multiple and multi-purpose sources to stay alive.

Google, Amazon, Alibaba, and Facebook are examples of organizations that dominate their markets through their digital platforms and data analysis and utilization strategies, becoming the most valuable companies in the world.

Customers are attracted to these platforms for a variety of reasons, notably for the ability to seduce the digital experience offered by the platforms and their high propagation and interoperability due to the intensive use of smartphones and the adoption of the cloud computing model.

Human beings are social in nature and this feature is extensively explored by customer experience scholars and the creation of digital interfaces that explore the stimulation of the hedonic quality dimension of users.

The human need to relate and exchange information is repeated in both the physical and digital worlds. The “Phygital” neologism originated from the growing convergence of the physical dimension and the virtual dimension that can combine the real world with the simulated one.

Then there is growing concern about the complexity and vulnerability of digital systems and the human need to know how organizations can protect our data from cyber-attacks, theft, and misuse.

Globally many organizations have been breached by hacking attacks and have had their data leaked and have had to spend millions of dollars to pay fines or engage in court settlements for allowing customer data to be exposed.

Uber, for example had to pay close to $150 million in 2016. Patient health data stored in healthcare and insurance companies’ systems also often doesn’t have adequate data protection, which results in increasing fine in the healthcare sector, especially in the United States.

Fines and retractions may become even more expensive with the arrival of the General Data Protection Regulation (GDPR) that originated in Europe and entered into force on 25 May 2018 to protect citizen data (initially European) against data privacy breaches.

Some notable scandals occurred between 2016 and 2018 that show the need to protect data in the age of digital platforms.

Yahoo, $85 Million: In 2013 it suffered a massive security breach that affected its databases and about three billion accounts (the company has not released this data for three years).

Equifax and Facebook $650,000: In 2017 the UK Information Commissioner’s office fined both companies for security breaches  under the first directive of the data protection law (pre-GDPR). If at this time the GDPR  was in place the fines would be much higher.

In October of the same year Facebook was penalized with a fine related to the Cambridge Analytica data fraud scandal, which combined mining and data analysis with strategic communication for the election process.

Tesco Bank, $21 million: The support bank of the UK’s retail supermarket chain (Tesco), was fined approximately $21.2 million by the Financial Conduct Authority (FCA) shortly after$3million was stolen from9,000 customer accounts in 2016. The FCA accused Tesco of “deficiencies” in the design of its debit cards, financial crime controls, and its financial crime fighting team.

Anthem $16 million: The US health insurer in 2015 suffered database breaches that affected 79 million people, exposing their personal data, social security numbers and medical IDI. In October of that year the company was fined$16 million from the United States Department of Health and Human Services due to not being in compliance with the Health Insurance Portability and Accountability Act (HIPAA). The company had to pay $115 million more because of a class action suit on the same violation.

These cases show us an increasingly clear and unavoidable direction on how organizations that control large platforms will find it more and more difficult to legally employ their users’ data while seeking new business.

Business platforms are enabled and supported by digital technologies and digital platforms, and the management, analysis and use of data from digital ecosystem participants is created by platform interoperability and data blending.

Digital platforms focus their strategies on combining their data-based services, capturing, treating, structuring, analyzing, and utilizing their users’ data along their journeys to generate new business or enrich existing business.

Data Governance strategies applied to the digital platform business model are areas widely studied in academia and also by experts in the search for the best data management and knowledge model.

By exploring the features and elements that make digital platforms attractive products, researchers explore network effects, then move to multi-sided markets and delve into the concepts of the winner takes everything from win-take-all-markets and the competitive purpose in a market-focused and competitive network ecosystem.

In the digital multiplatform business model, the above discussions gain even more strategic and competitive relevance by including the regulator in the role of advocate GDPR.

These forces require organizations to pursue greater expertise to do combinatorial data analysis simply and intelligently, and to achieve greater competitive relevance considering data as their primary asset.

These assets (data) are now available in large volumes, wide variety, from many sources, and are produced at high speed. This abundance can be toxic as it is difficult to govern and keep highly coveted data safe. This is the new oil of our century.

Many companies today collect more data than they really need because they don’t know what really matters to their business. There is captured data that generates low informational or no informational value. It is inaccurate, outdated, illegal, or simply useless data in the context of the organization’s business.

Clearly, lack of Data Governance further increases operational risks that drive data leaks and obstruct good cybercrime conduct.

The internet thus far can be considered the main thread of business platforms and digital platforms because its open architecture was designed for the benefit of all seeking symmetry of use but has failed at this point.

The web has changed dramatically and is beneficial to organizations rather than cost-effective to users of data, but according to internet creator Tim Berners-Lee, “This is the time to make a change to unlock the original promise of the web.”

This is what he is looking for in his newest project, Solid, which foresees the redesign of the World Wide Web. Its ambition is to build a new architecture for the internet and thereby make citizens’ data work for its true owners by delivering greater governance for the user, providing for building applications that talk to each other and prohibiting unwanted third-party access, and enabling new business to be created with revenue-generating models that connect developers and businesses reliably.

Certainly, when we think of how to protect ourselves in the virtual world, we think of our most important information (personal data) which the GDPR defines as any data (or combination of data) that can make a person identifiable in a given context.

By using your smartphone, you can be tracked, and your steps tracked and by paying with your credit card you reveal your spending habits and wealth level in both the physical and digital worlds. When we browse websites, we leave our digital tracks (data on habits, intentions, desires, curiosity, needs).

We conclude that combining this information creates the “perfect storm,” a unique algorithm that represents you. It is you.

We understand that the business of digital platforms is multi-industry (telecommunications, financial services and payments, retail, e-commerce, and digital marketing).

Competition and innovation forces competitors in each industry to rethink their strategies for continuing to use the data that feeds their business from the perspective of also protecting the pot of gold.

We are in the age of interconnected platforms and fragmented data security. In the future we will have the opportunity to enjoy the digital world with privileges of stewardship of our data or remain mere users.

Is the reinvention of the internet and real data security the key to universal basic income?

Will we be paid for the attention spent watching unwanted ads? Or receive tailor-made proposals and advertisements with our data?

There are many uncertainties about the future of the use and security of our data, and yet there is still no systemic or regulatory architecture that can provide us with the necessary protection as we become more digital, and our personal data is at greater risk. In fact, it creates a multi-billion dollar industry – the data protection industry – and again the product is us.

We use technologies such as cookies to understand how you use our site and to provide a better user experience. This includes personalizing content, using analytics and improving site operations. We may share your information about your use of our site with third parties in accordance with our Privacy Policy. You can change your cookie settings as described here at any time, but parts of our site may not function correctly without them. By continuing to use our site, you agree that we can save cookies on your device, unless you have disabled cookies.
I Accept