Why big data are not the new oil – Mark Schaub

0 Flares 0 Flares ×

Mark Schaub

Shanghai-based lawyer Mark Schaub dives further into the legal consequences of self-driving cars. Big data – generated by cars – are not the same as oil, as some argue, he says. Privacy is a key issue, that did not matter to oil, he writes at the China Law Insight.

Mark Schaub:

Everyone is talking about data and how it is like oil. The above quote has been repeated by the Economist, newspapers, titans of industry and world leaders.

However, data really is not like oil.

Oil is ultimately a finite and diminishing resource. Its value is linked to scarcity. Oil has one basic use. Data has none of these attributes. Data and its uses expand exponentially. Indeed it is forecast that in the next two years, 40 zettabytes of data will be created – this is data equivalent to 4 million years of HD video. [1] Most crucially consumers of oil do not generally take matters personally. Data on the other hand, inflames consumers’ passion-how do I maintain privacy? Who has access to my data? How will the data be used?

Big data is a focus area for many industries and the auto industry is no exception. However, with the advent of self-driving cars the auto industry will not only be a consumer of data but also a major generator of data. A single self-driving car could generate as much as 100GB of data every second. [2]

Given that China has 217 million cars and the number increases by nearly 11% each year [3] this means the potential amount of data produced yearly would be far greater than the data held by Google.[4]

Self-driving cars may not need oil to function (as most will be electric) but they will need data to be on the roads. Self-driving cars will rely on a massive amount of data to flow via various sensors integrated into the vehicles. The vehicle will need to know its precise location, its destination and also be able to keep track of everything while it is on the road.[5] Self-driving cars will also need to learn about their environment and the consumers who use them. The “smarter” self-driving cars can become, the greater the convenience for the users. However, the cars will need increasing amounts of personal data to become smarter and also to incorporate data results into the services.[6]

Unlike oil the data generated by self-driving cars will not be a simple commodity that will be used for one purpose and consumed. The data generated will have great value to carmakers, mobile operators, insurance companies, restaurants, hotels and any other innumerable numbers of service or product providers that hope to interact with a self-driving car or its user. Google has built a $400 billion business on its knowledge of over one billion[7] users’ internet habits using their search engine for 1.2 trillion searches per year. [8] Imagine how valuable similar insights that are generated by observing billions of consumers’ behavior in cars for extending periods of time every day.  The potential for monetization will be almost limitless.[9]

Data – great for companies, great for convenience, great for consumer experiences – but not so great for privacy.  Privacy concerns on the part of consumer have greatly increased in recent years with the growth of social media, internet and data hacks. Self-driving cars will amplify concerns and consumers and regulators realize how much data and personal information these vehicles will generate, use and record about users and the surrounding environment. Self-driving cars will be a veritable fleet of data factories. Such mobile surveillance will mean that privacy will be compromised … everywhere.

As millions of self-driving cars are expected to be on the road within the next few years the issue of balancing the modern concern of privacy and the pressure to not hinder the next great industrial revolution will be increasingly pressing. A balanced regulatory scheme will need to be established to protect privacy on the one hand while still allowing the technology to develop unheeded by excessive government intervention.

Much more at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at our meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more stories by Mark Schaub? Do check out this list.