Algorithms are the decision-makers of the future

Our internet presence generates a large amount of information. What happens to personal integrity in the wake of the digitalisation of society? How conscious are we that much of what we do on smartphones and on the internet is registered by major companies like Apple and Google who then sell the information on a data-driven market?

Merely by being on the internet, we generate a large amount of information: the pages we consult, the information we search for, the people we contact through social media, our emails and location data. The list can very long. Everything in digital society is potentially a source of data to be collected.

Does this sound frightening? It is only the beginning of the digital economy which operators such as Google, Facebook, Microsoft and Apple are using. The core of the digital economy is not the products or services themselves, which are free of charge to the end user. It is the information gathered, analysed and offered to other operators such as sales or gaming companies, banks, insurance companies, etc.

Everyone who uses a computer, a smartphone, a tablet or similar device enters into a large number of agreements. Many of these cannot be avoided, even for the simplest services. If you do not allow cookies, the service you want to use may be limited or cease completely. It is not possible to select only parts of the agreement, and with your consent, the information is then gathered.

“The prevailing asymmetry between the information-gatherers and the users is problematic in several ways. The users have become data sources for a series of processes and markets. The information-gatherers know a great deal about us, whereas we users often don’t know who gets access to the information, what they know, or how the information is used and passed on”, says Stefan Larsson, researcher at the Lund University Internet Institute. It is not possible to select only parts of the agreement, and with your consent, the information is then gathered.

” The prevailing asymmetry between the information-gatherers and the users is problematic in several ways. “

If you look at the information which is collected about each person, each small part can appear innocent and, on its own, not particularly useful. It is the mass of information in all its various parts which provides operators with your individual profile. Where you live, what car you drive and which coffee you prefer. Various algorithms are programmed to automatise the analysis of information gathered about you.

“Consumer mapping has been carried out for a long time; previous statistical methods could group people together and were descriptive. Today’s algorithms for analysis, in combination with large amounts of data, have come a lot further and succeed in predicting the future; they can now make predictions of future behaviour in individual consumers.”

In Sweden, two main public offices oversee the correct use of personal data and strive to ensure that consumers’ rights are not violated or undermined: the Swedish Data Protection Authority and the Swedish Consumer Agency. In two recently published reports on behalf of the Swedish Consumer Agency, researcher Stefan Larsson reviewed how operators work with consumer profiling and what is written and done about digitalisation from a consumer perspective.

“In brief, consumer profiling means gaining an understanding of consumers”, says Stefan. “This knowledge aims to serve as a basis for decisions on marketing, product placement or the design of various products or prices.”

In a new study conducted by Stefan Larsson together with legal researcher Jonas Ledendal for the Swedish Consumer Agency, in the field of “personal information as a means of payment”, the researchers investigate to what extent consumers are exposed to data gathering as a way of paying for the service itself, including so-called “free services”, with the aim of reinforcing consumer protection in an area mostly discussed in terms of protection of integrity. The Swedish Consumer Agency could play a greater role, according to them.

Increasing numbers of people are demanding stronger regulation for consumer protection. The same applies to the way in which personal data is used and collected, an area supervised by the Swedish Data Protection Authority.

Today, with highly automated digital commerce, the offer to the consumer occurs in real time and is adapted to the individual’s consumer profile. Prices can vary from one consumer to another, depending on how fat your wallet is.

Interest rates and premiums can also be adapted, depending on whether your finances are in good or bad shape. For example, people with less sound finances may be offered a higher interest rate, as they entail a higher risk for the lender.

Legislation and regulation of how personal information is managed has not developed abreast of the rapid spread of digitalisation, it seems.

Stefan Larsson’s report includes an account of a study conducted in Norway in 2015, which reviewed the front pages of six daily newspapers. On average, the pages featured between 100 and 200 cookies and the user’s IP address was passed on to 356 servers. The information was also forwarded to 46 third-party cookies: a considerable amount of information about the reader to which many operators gained access.

“Even if better transparency does not solve all the challenges brought by the incredible number of user agreements, which the average person in an everyday digitalised existence does not really keep track of, greater insight into how personal data is used is a condition for both supervision by public authorities and correct fundamental conditions for fair competition”, says Stefan Larsson. “If consumers do not see how their data is used, they cannot choose the services that process their data in a way that is acceptable to them either.”

Currently, work is underway on a new data protection ordinance, which will enter into force in May 2018, and aims to give individuals greater control over their personal data. A driving force for the renewed data protection, besides the fact that the previous rules were based on an EU directive from 1995, is to create the conditions for an increasingly data-driven market. The question is how this balance is best to be achieved in an increasingly digitalised society with boundary-crossing transfers of various forms of data.

Text: Peter Frodin

Photo: Peter Frodin

Don’t miss:

Seminar on Integrity issues in digital society, 28 April from 13:00 to 16:00, Large Auditorium, Ingvar Kamprad Design Centre (IKDC), Lund.

Facts

Stefan Larsson

Stefan Larsson is associate professor in technology and social change at the Lund University Internet Institute (LUii), and has a PhD in both sociology of law and physical planning. He is also a member of the Swedish Consumer Agency’s research council.

 

Relevant publications:

• Larsson, S. (2017) ”Digital konsumentprofilering. Stora data, prediktiv analys och policyutmaningar”, in Sandberg, A. (ed.) Kunskapsöversikter inom det konsumentpolitiska området, Konsumentverket. 2017:1.

• Larsson, S. (2016:12) Digitalisering och konsumentintresset. En litteraturstudie. Karlstad: Konsumentverket.
• Larsson, S. & Ledendal, J. (forthcoming) Personuppgifter som betalningsmedel, Konsumentverket.