Given the proliferation of data breaches on nominally encrypted sites over the past year, is anyone really surprised that a firm like Cambridge Analytica could access Facebook-generated data on more than 50m people? It’s said that when you commit your personnel details online, you’re essentially feeding them into a vast global photocopier – and regardless of the Haight-Ashbury spiel on Facebook’s mission statement about giving people “the power to build community and bring the world closer together” – the dangers of schlepping around cyber-space are becoming more apparent by the day.
The Cambridge Analytica affair adds ballast to the notion that Facebook has limited ability to control where your data flows, how it is used, and by whom. You might even question whether this has been a priority for the company given its business model is predicated on amassing data from the online community, before collating and utilising it to sell targeted advertising. Perhaps the penny will finally drop for users of the service, and there’s already evidence to suggest that younger punters have been decamping to alternative social media sites such as Snapchat.
In fairness, this latest controversy may even be politically motivated, but it forms part of a wider narrative, as policy makers scramble to impose a viable regulatory framework on the world of data commerce. It’s a subject that was recently covered at length within these pages by my colleague Harriet Clarfelt, but you could be forgiven for thinking that the horse has already bolted on this one.
We’ve seen a flurry of anti-trust issues in recent times, most notably AT&T’s (US:T) proposed $85bn takeover of Time Warner (US:TWX) and Rupert Murdoch’s £11.7bn bid to take full control of broadcaster Sky (SKY). The irony of these terrestrial anti-trust issues wouldn’t have been lost on Mr Murdoch, as neither tie-up, nor the proposed sale of 21st Century Fox’s (US:FOXA) film and television assets to the Walt Disney Company (US:DIS), would create a media organisation that would rival the global reach of the likes of Facebook or Google. They’re already in a different league.
But there’s no doubt that regulators, perhaps belatedly, have the bit in their teeth, so these platforms, along with Jeff Bezos’s Amazon (US:AMZN) will probably try to convince regulators that internal reforms would deliver more effective outcomes than rigid legislative controls on their business activities. But the spectre of regulatory reform is looming as the overarching determinant for valuations of platform-owning tech companies – that’s the central consideration for investors.
If the lotus eaters addicted to Facebook are now waking up to the fact that almost anybody can use the platform to collect detailed information about them, how would they adapt to the knowledge that there are companies out there who want to exploit them on a molecular level?
The whole issue of data privacy takes on a different complexion when you consider the business model of a company like 23andMe. Speculation has mounted that the company plans to go public in the US (presumably on Nasdaq). Given the personal genomics and biotechnology company was co-founded by Anne Wojcicki, wife of Google co-founder Sergey Brin, it’s obviously got the right pedigree. The online service allows its users to study their ancestry and inherited genetic traits, but it also markets the aggregated data to researchers and scientists, for whom they provide categorised and searchable data. The commercial scope is obvious, as are potential areas of abuse if this information got into the wrong hands.
Another entity, dubbed Nebula Genomics, is the brainchild of Harvard and MIT geneticist George Church. The start-up is seeking to change how companies handle an individual’s DNA. The idea is to sequence a punter’s genome, provide the usual information, but then to secure it using a blockchain, and allow the individual to do whatever they want with the data, thereby enabling them to earn digital money by sharing it. Genomes, blockchain and crypto-currencies – what could possibly go wrong?
