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How Big Data is Like Big Tobacco (Part 1)

We are now ending the lust phase of our relationship with
big data. Thank God. The next phase promises to be equally exciting, albeit
considerably more turbulent. Some maturity, some retribution.

For the purpose of this discussion, set aside our myriad
definitions of “Big Data” the technology and focus instead on the
powerful oligopoly of companies that have grown to dominance by gathering and
selling data — your data. The concept isn’t new. Selling data has been an
industry for many decades. The Internet era exploded data. Then some Internet
companies exploited data — in a way and to a degree that we could barely
conceive 20 years ago. A concentrated group of companies, some household names,
some not, have set the world on fire by acquiring and selling data about you.
Yes, you. Call these behemoths collectively “Big Data”, because they
are heading down the path blazed by the Tobacco oligopoly affectionately known
as “Big Tobacco”, with potentially similar disaster in store. We can
hardly compare the damage Big Data does to the health crisis Big Tobacco
provided us. On the other hand, Big Data has no exclusive control over the
addictive commodity underlying its business. If they lose the public trust — a
process well underway now — a major piece of the economy is going to have to
change or die.

More data, more services… and games, phones, watches,
appliances, tools, cars, rockets…everything. It’s an amazing deal right?
Maybe. First be sure you understand the deal. Most people don’t. Or maybe they
don’t really want to. Those gadgets are cool! So, like the teenager who strikes
the Joe Camel pose for the first time or the unemployed laborer who scores a
zero-down adjustable rate mortgage, the relationship begins. Sure, smoking is
“bad for you”, you shouldn’t borrow more than you can repay and you
should understand the license agreement before you click. But everybody’s doing
it! They can’t ALL be wrong. Anyhow, if it was really bad for you, the
government wouldn’t allow it, right?

Then the lawsuits begin.

Let’s look back at the progression of Big Tobacco. In 1950,
the British Medical Journal published the first scientific study correlating
smoking and lung cancer. It wasn’t until 1964 that the US Surgeon General also
explicitly connected smoking cigarettes to cancer. Over subsequent decades,
evidence mounted despite being routinely obfuscated by Big Tobacco. Already in
the mid-50’s however, individuals had begun to sue Big Tobacco on various
grounds, mostly asserting fraud and violations of consumer protection laws. The
success of these cases? Through 1994 — 40 years of victim vs. Big Tobacco —
over 800 cases were brought in the US. Big Tobacco didn’t lose once. That’s
power. They knew how to win in the courts and in Congress. That changed in the
late 90’s.

Two things forced a 180 degree turn on Big Tobacco’s US
fortunes. First, tobacco insiders (THE
— Dr Jeffrey Wigand, among others) delivered
compelling evidence
that not only did Big Tobacco know their product
was harmful and dangerously addictive but they literally designed the product
to maximize addictive effects. “We’re a nicotine delivery business.”
The truth was out and it was ugly. Second, the government got involved when the
victims could no longer be ignored. Several States Attorneys General banded
together and eventually won the biggest settlement in history against Big
Tobacco in 1998. The complaint asserted fraud, deception, negligence and public
nuisance, among other things. In the US now, smoking is pariah activity and illegal in most public
spaces. Big Tobacco knew the writing was on the wall in the US. Long before the
judgment came, they had diversified into food and other consumables.

Big Data is running down a similar path. Deception? Check.
Users are only now realizing on a broad basis that many companies are watching,
recording and manipulating them CONSTANTLY. It’s not just what you buy. That’s
primitive stuff. Every site you visit, everything you ‘like’, every person you
interact with online, every word you type in “free” email or chat
service, every picture you take (yes, including those you thought were
instantly deleted), every physical place you go with that mobile device, the
middle of the night drunken surfing… yes, yes and yes. And it’s not just
online activity. Remember, companies have been at this for decades. All the
publicly available information is now being tied together with your digital
life to deliver an incredibly intimate picture of who you are and what you are
likely to want, spend, do. Just leave it to Big Data to make the predictions.
(What’s the best way to make an accurate prediction? Manipulate the outcome!)

Anyone not living in a gun shack has a profile that runs to
literally thousands of data elements. You don’t need to be a Facebook addict to
have a file 6 inches thick which carries your purchase history, voter
registration, residence, major credit events, network of friends etc. That list
is growing exponentially because now the cottage data industry has become Big
Data, with limitless resources. Increasingly, Big Data isn’t even bothering to
ask user consent for any of this. As they say: “Not paying for the
product? You are the product.” The government (US and EU) is taking notice
and taking action. Users feel deceived and governments have
picked up the scent.

In Part 2 of this series, I’ll take a deeper dive into
government intervention related to big data. This article was originally posted
on The Customer Edge, a new webzine for
Marketing, Sales, and Service leaders.

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