But how likely are data-lockers to work? Will they really allow consumers to make money from the personal data that they share online? Here’s a summary of the main arguments for and against.
The argument for: Why data locking could take-off
What’s the point of locking down your data when it’s highly likely that companies have loads of it already? We have previously discussed the European Commission’s proposed new data protection laws, which if passed could grant people the “right to be forgotten”. This would make it possible for them to permanently erase all data they’ve already shared, and then lock it down moving forward.
The savings and money to be made – and these work on three potential levels:
- Earning money: Instead of allowing companies to build up massive detailed data stores of information on you via apps and other social channels (e.g. your health and how much you work out, eating, sleeping, drinking patterns, etc) – make them yourself, lock them down, and charge for them. The ultimate idea behind Personal’s services is that customers will have a marketplace where they can haggle and exchange their data, potentially earning up to £1,000 annually.
- Saving time: On filling in lengthy application forms for mortgages, insurance, academic courses, etc People can put their personal information in the lockers and this will either help auto-populate fields, or can be picked up by the intended recipient to be processed on your behalf.
- Saving money: As people can opt to share information in order to benefit from more personalised promotions for things they actually want and intend to purchase.
The argument against: Why data locking won’t take off (at least not yet)
- Security, as these lockers will be prime targets for hackers.
- The proposed EU legislation is still far away from becoming a reality, and as Paul mentioned it is attracting some impressive lobbying efforts. Indeed, both Facebook and Google dramatically increased their lobbying expenditure in 2012 compared to 2011, with Facebook multiplying its spending by 2.5 times.
- People are lazy, and busy. In order to benefit from the potential earnings and savings they will need to expend time and energy on reclaiming their data / setting up the service / building up detailed data sets on themselves for potential sale (not using Nike or anyone else’s handy app) and then haggling over their worth. So the benefits will really have to be worth it for them to make the effort, and it will all rely on a tipping point and mass adoption in order to make any real impact. It will also rely on people reducing the already strong connections they’ve already built up with companies they’ve regularly used for years, and trust (e.g. Amazon).
- Marketers and advertisers will only be interested in bargaining if they can see it’s the best way to reach people – again, it depends on en masse adoption.
So will consumers make money out of the data they share online? It’s a possibility, but it’s not happening yet. While all the lobbying and hype about data continues though, companies should be careful not to get distracted from building and maintaining trusted relationships with their customers. That way, customers will be more likely to want to continue to do business and share their information regardless.