Privacy & the Internet Economy – Big Data Threats and Opportunities

privacy-goes-public-100018807-galleryOver the past 10 years, Internet ad revenue has grown by 7X, from approximately $1.5B to now $10B annually.  A major driver of this growth is a “behind the scenes” network of cookie collection companies, data exchanges, and data analytics that lead to customer data collection and highly targeted digital advertising – in short, Big Data.

And while the Internet economy has grown, the views of Internet privacy have also started to change.  The view in the late ‘90s was simply, “you have no privacy, get over it”.  However, over the past 10 years, we have seen an increasing number of law suits and regulations that limit the ability of Internet firms to collect and use customer data.  Apple has been sued for iPhone tracking, Facebook was ruled “deceptive”, and Google was recently fined $22M for privacy violations. 

These are all the early signals of what could be the SOX regulations yet to come for Internet.  And it could be both a limitation on the growth of the Internet economy as well as a new opportunity for those new firms that will be able to guarantee compliance with upcoming privacy regulations.   

This new trend is the subject of one of our latest white papers, authored by Anil Dagar, Yasuhiro Endo, Abhay Gupta, Yan Li, Kuldip Pabla , and Sridhar Ramaswamy from our Engineering Leadership Professional Program at UC Berkeley.  The greatest sentiment for the privacy protection trend is in Europe.   Examples being considered by the European Union policy makers include 1) requiring people to give permission before being tracked, 2) provisions to fix data collection errors, and 3) offering the “right to be forgotten”.  

For now, regulators are on the fence.  Most consumers prefer privacy options, but at the same time, policy makers are aware that such changes will likely pose a challenge to the Internet economy as well as the real economy.   And where there is a challenge, there is also an opportunity.  See [link] to read the full report.

Posted by Ikhlaq Sidhu

Published by Ikhlaq Sidhu

Ikhlaq Sidhu is the founding chief scientist of the Center for Entrepreneurship & Technology in the College of Engineering at UC Berkeley.

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