Last year, I defined "data sleaze" as
the data about one's own customers that are obtained secretly by businesses, and then sold to the highest bidders, also in secret transactions. (link)
Washington Post just published a very useful article about auto-makers who are doing the following:
Carmakers have turned on a powerful spigot of precious personal data, often without owners' knowledge, transforming the automobile from a machine that helps us travel to a sophisticated computer on wheels that helps us travel to a sophisticated computer on wheels that offers even more access to our personal habits and behaviors than smartphones do.
That is exactly what I was talking about. Your new car is spying on you.
The volume of personal data being tracked is staggering - for example, they can monitor your body weight by putting a sensor in your driver seat. It's all in the article, go read it.
***
There are many problems about data sleaze that our society has failed to recognize and address so far.
The data will be used against you.
Many companies claim that the data collection benefits you, while they make a profit selling your data to third parties. For example, the carmakers tell Washington Post that "the data is used to improve performance and enhance vehicle safey. The information, they add, will soon be able to reduce traffic accidents and fatalities, saving tens of thousands of lives."
How? According to Wikipedia, fatalities total tens of thousands per year so these carmakers are suggesting that having the data will eliminate all motor vehicle deaths! Is your car going to brake automatically because the sensor learns that you're speeding? If your car is skidding on ice, how is the data going to avert the crash?
If the sole purpose of data sleaze is car safety, then the data won't be sold to third parties for profit. Insurers and marketers are not involved in car safety. In fact, the data can reside within your car; why do the data need to be stored and sold, and tied to your personal information?
What harm can the data do you? Take as an example, you drive through high-risk neighborhoods to and from work each day - if the auto insurer learns that, it will hike your premium. That's not a benefit to you.
A retailer learns that you buy a gallon of OJ every week. How will the retailer monetize this data? You aren't getting a 30% off coupon from them since they know you are loyal. If they did that, they forego 30% of their sales for no reason. Instead, the retailer wants to increase your total purchase value so they might send you coupons for other items, or upsell you to a more pricey brand of OJ. The problem is that your interest and their interest don't usually align.
***
Data sleaze occurs behind customers' back.
The enabling device is the "terms and conditions." The carmakers say that their customers have given them "explicit permission" in language buried in thick service agreements. Everyone knows that few read these lengthy documents so in effect, permission is presumed but not granted.
Because the trading of the data is in the shadows, and because the businesses profiting from such data do not explain how they are using it (especially if they profit at our expense), consumers might believe mistakenly that the data collection is harmless.
***
The false claim of anonymity
Most businesses shy away from the word anonymity these days; and if they didn't, they probably are lying. Data sleaze is almost always tied to individuals. Imagine you are the insurer or the marketer paying the carmakers to use this data. You are using the data to adjust premium rates or send marketing materials. You must have personally identifying data, such as addresses, emails and phone numbers, to communicate these actions to the customers.
Though your points -- that data on us are being collected with our knowledge and that it can be used for purposes we may not imagine -- are good ones, your examples have a lot of spin on them. For example: you write,
"Take as an example, you drive through high-risk neighborhoods to and from work each day - if the auto insurer learns that, it will hike your premium. That's not a benefit to you."
You could just as easily write: Take as an example, you drive through *low*-risk neighborhoods to and from work each day; several auto-insurers buy your data, and one realizes that you provide a low risk to them, and offers you a policy with a lower cost. That's a benefit to you! Or: it would be silly for auto insurance cost to be the same for young men as for middle-aged women; if so, the latter would be effectively subsidizing the former. Similarly, other harder-to-collect data reveal previously hidden risks, with which one pool of people is, unknown to them, subsidizing another. For example, data on driving through "dangerous" neighborhoods. (Actually, dangerous neighborhoods aren't that dangerous, but that's a separate issue.)
Similarly: some people actually like "coupons for other items," etc. I'm not one of them, and I opt out of any marketing I can, but it's paranoia to think of this as a nefarious plot, or something that no one considers a benefit.
I think consumerism and marketing have too great an impact on society, and I also would like it to be possible to easily opt out of data collection schemes. Nonetheless, I do think that overblown spin from companies shouldn't be countered with overblown spin on the other side.
Posted by: Raghuveer Parthasarathy | 01/27/2018 at 01:32 PM
RP: It was intentional what I wrote. The case of hiking your premium leads to higher revenues for the insurer while that of lowering your premium leads to foregone revenues which need to be recovered elsewhere. Incentives matter!
Differentiating between young men and middle-aged women does not require data sleaze. It's already been done.
"Coupons for other items" should properly be described as "coupons for things you don't intend to buy" because my argument applies to any item you intend to buy.
I did spend my prior career in marketing analytics, and I'm just giving you what I've seen happen.
Posted by: Kaiser | 01/27/2018 at 11:15 PM
A good example would be the use of information about where I obtain fuel for my car. There are then several possibilities.
1. I'm told honestly that there is a cheaper option.
2. I'm told that there is a cheaper option but it is only when it is from a sponsoring company.
3. I get advertisements to buy from somewhere that is more expensive, even though the car knows that it is not in my best interests.
If I own something then I expect it to act in my best interests, so I would only agree to 1. Hopefully the reaction of the public to anything else will make sure that happens.
Posted by: Ken | 01/31/2018 at 02:50 AM
Ken: Nice example. The problem is the secrecy, hence data sleaze. If the public knows, then the businesses have the incentive to act in their interest. If the chance of exposure is low, there is an incentive to act for one's self-interest.
Posted by: Kaiser | 02/01/2018 at 02:55 AM