When Competition Shifts From the Known to the Unknown

In traditional knowledge economies, companies gain advantage with information about what is known. But in the new information era, in which some companies and governments are exploiting massive amounts of data, economic and societal power is increasingly coming from the ability to predict the unknown.

In a provocative research paper, Masters of Big Data: Concentration of Power Over Digital Information, Alessandro Mantelero, an assistant professor of Commercial Law at the Politecnico di Torino and Faculty Fellow at the Nexa Center for Internet and Society in Turin, Italy, argues that skillful uses of big data are creating new concentrations of power — not simply among corporations, but also among nation-states and other groups. This power comes at least as much from the ability to describe and assess what is known, as from the predictive ability of new techniques to analyze large data sets, says Mantelero:

The predictive ability is the fundamental element that distinguishes this new kind of power from the ordinary power to acquire a large number of data or profile millions of people.The size of datasets makes it possible to draw inferences about unknown facts from statistical occurrence and correlation, with results that are relevant in socio-political, strategic and commercial terms.

These data-driven concentrations of power require checks and balances, according to Mantelero, who suggests three tactics to help keep those with data power in check, and to distribute power to those without access to data:

• Create specific international, independent authorities and introduce a mandatory notification of the creation of a big database. These authorities will have a role in establishing standards for transparency around the creation and maintenance of government and other groups’ large databases that track personal data of citizens, within and across national boundaries. The intent is to imbue these authorities with enough power to limit government overreach into the private sphere.
• Open public databases to citizens. Giving citizens access to raw data not only reduces the power of those who own information in terms of their exclusivity of access to the data, but also limits their advantage in terms of technical and cultural analysis skills. Alternative and autonomous centers focused on big data management could be created.
• Balance the geopolitical power of information distribution, which is currently dominated by U.S. public-sector companies. Stimulating competition in the development of new technologies in the ICT sector and strengthening the regulatory framework for the protection of information are the only possible responses in order to limit the potentially negative effects due to the use of services provided by foreign companies.

Given that the U.S. National Security Agency [NSA] has for years been collecting extraordinary amounts of domestic phone and Internet communications without formally notifying the public — and compelling U.S. technology companies to provide access to their data — Mantelero’s call to action is not just timely. It also throws into relief the legal ramifications of using predictive analytics on batches of data culled from hundreds of millions of unsuspecting citizens.

Whether or not Mantelero is right to be worried about the new concentrations of power afforded by data’s predictive capabilities, one thing is certain: as data increasingly becomes an arena in which companies and government work together, companies may want to consider bolstering their own government liaison offices — if not their legal teams.