you’re building trust. But I can see how for internet
companies it’s a little scary to start down this road.
How do you answer the CEO who says, “Look, it’s
good you’re thinking about this, Sandy, but you’re
hampering innovation. We need to collect this data.
We’ll figure out how to make it secure and make
sure people are comfortable with what we’re col-
lecting.” I think that’s exactly wrong. Look at the
financial industry, for instance. Starting in the 1800s,
it was basically unregulated, and we had booms and
busts that destroyed huge swaths of the economy
and ruined many families and communities. That’s
rest of Europe. In Trento, Italy, hundreds of families
are living with the New Deal on Data. They get no-
tification and control of data generated about them.
It’s securely shared in an auditable way. And guess
what? These people share a lot more than people
who don’t live under New Deal rules, because they
trust the system and recognize the value in sharing.
Being confident about your personal data makes for
a better economy, not a worse one.
Trento is a collaboration with Telecom Italia and
Telefónica (disclosure: I sit on the advisory board of
Telefónica), and it is a way of anticipating data protection regulation in the EU. We’ve used software
called openPDS, developed by my group at MIT. It
stands for “open personal data store,” and it allows
people to see what data companies have and to share
data in a secure, safe way. The idea of the Trento experiment is to ask how people feel about this way of
sharing data, how they use it.
A big question is, Does an openPDS environment
generate more innovative services or fewer? The
answer seems to be that you get more, because consumers have explicitly trusted you with their data, so
you can offer services you never would have been
able to offer before because it wasn’t safe. A simple
example is sharing financial data with peers. When
anonymous sharing is safe, you get new sorts of applications that rely on the trust and security of the
Can this scale? Absolutely. We’ve had extensive
discussions with companies that have hundreds of
millions of customers, and yes, it can.
Are you hopeful the New Deal will truly come into
being? I’m quite hopeful, actually, because people
are fed up. They’re cynical. If you ask what they
worry about, identity theft comes in ahead of nuclear war. They don’t do much about it because they
don’t see that they can do much, but the New Deal is
a good, plausible thing we can do today. Regulators
believe in it. Computer scientists believe in it. Smart
people who are the heads of tech companies think
we can do this. They may not be in favor of it, but
they think we can do it. It simply requires that creative businesspeople harness the will of consumers
in order to construct a value proposition better than
the current steal-all-your-data paradigm. We’ve just
got to push on through.
HBR Reprint R1411E
Who’s going to hold the
complete picture of your
life? Some credit-rating
where we are with personal data. People say personal data is the new oil of the internet. What they
mean is that it’s a new asset class, a new value, a
new money. And we don’t have the regulations to
treat it like the value class it is. We need data banks.
We need data auditing. We need them in order to
avert huge disasters from breaches and attacks and
class action suits. The FTC has said it’s going to go
after data collection, and the only thing that limits
it is that it doesn’t have enough lawyers. But it may
get more lawyers if it collects a lot of big fines.
What happened when finance was regulated?
Less volatility, greater trust, and more-successful
financial institutions. People will be more willing to
share data if they’re confident that it’s safe to do so.
Right now there’s lots of data you would never share.
You’d never share the location of your kids. You’d
never share certain financial things you do. If this
was a regulated industry, you might feel comfortable
sharing personal data.
Is there any evidence that data is like money in this
way? Yes. We’ve set up some safe-harbor areas in
Europe—cities that run by different rules than the