Relax and Learn to Love Big Data

Lawmakers should tread lightly when looking to curtail data collection.

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The Internet ate my privacy! That's the way many people feel these days and it's hard to blame them. It seems like there's more information about us flowing around online with each passing day, whether we intended that to happen or not.

But there are also great benefits associated with those data flows and the uses of our personal information, and lawmakers should be careful when seeking to curtail commercial data collection and use or else they could kill the goose that lays the Internet's golden eggs.

In recent years, concerns about our digital privacy have been exacerbated by the growth of "big data," or massive datasets that are used by companies and other organizations to catalog information about us. These data sets are used to tailor new and better digital services to us and also to target ads to our interests, which helps keep online content and service cheap or free. But some critics still fear the ramifications for our privacy of all this data being collected.

Policymakers are responding with stepped-up efforts to enact new regulations, or at least get industry to voluntarily agree to certain data "best practices" or codes of conduct. Various privacy advocates have pushed these efforts fearing that, without new regulation, we will forever lose control of our data or, worse yet, be subjected to new forms of economic or social discrimination.

[See a collection of editorial cartoons on the NSA.]

While some of these concerns about big data are understandable, the critics often overstate these dangers while also glossing over the overwhelming benefits. They also ignore the extent to which people adapt to new information technologies over time.

First, consider some of the benefits of big data. Many of the information services and digital technologies that we enjoy and take for granted today came about not necessarily because of some initial grand design, but rather through innovative thinking after-the-fact about how preexisting data sets might be used in interesting new ways. Some examples include: language translation tools, mobile traffic services, digital mapping technologies, spam and fraud detection tools, instant spell-checkers and more.

If new laws or regulations preemptively curtail data collection based on privacy fears, innovative new services like these might be lost in the future. As Viktor Mayer-Schonberger and Kenneth Cukier point out in their new book, "Big Data: A Revolution That Will Transform How We Live, Work, and Think," "data's value needs to be considered in terms of all the possible ways it can be employed in the future, not simply how it is used in the present." They note, "data is like a magical diamond mine that keeps on giving long after its principle value has been tapped."

[Read the U.S. News Debate: Should Americans Be Worried About the National Security Agency's Data Collection?]

Meanwhile, the harms that are sometimes alleged about commercial data collection and use are almost never substantiated. No one is being excluded from the information economy because of these practices. To the contrary, data collection means all consumers enjoy a fuller range or goods and services, usually at a very low price.

But there's another reason policymakers should resist the urge to regulate commercial data collection and use too quickly or casually. People will adapt to most of these practices as they have in the past when other technologies disrupted established social and economic norms. We've seen panics come and go about many other technologies, including the telephone, cameras and even caller ID. In these and other cases, technologies that were initially viewed as intrusive or annoying one day often become not just accepted, but even essential, in fairly short order. 

To the extent there are serious privacy-related harms associated with personal data collection and use, they are mostly confined to health and financial information, which are far more sensitive in nature. However, we already have privacy rules covering those classes of information.

[See a collection of political cartoons on Obamacare.]

Another way to address privacy concerns is through stepped-up consumer education efforts. We need better digital literacy programs to teach children and adults alike to think critically about their online interactions and how to safeguard information. Part of those efforts should also be aimed at companies and organizations to encourage better data stewardship. Data-collecting entities need to be pushed to adopt sensible collection, use best practices, and keep their users better informed about these practices.

By contrast, heavy-handed regulatory approaches to data management will likely derail our data-driven economy and all the benefits it brings us. This is not about "protecting corporate profits" or Silicon Valley companies. This is about ensuring that individuals as both citizens and consumers continue to enjoy the myriad benefits that accompany an open, innovative information ecosystem.

Adam Thierer is a senior research fellow at the Mercatus Center at George Mason University.

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