Welcome to we-commerce

Weigend believes privacy is an illusion in the modern world.

Former Amazon scientist Andreas Weigend unravels the data game.

While former Amazon chief scientist Andreas Weigend can see the value of data collection for consumers, he is concerned about the dark side of surveillance. Nevertheless, he can see ways of striking a better balance.

History is littered with examples of technological breakthroughs that have led to unintended or unforeseeable consequences.

It is doubtful, for instance, that the designers of the original Global Positioning System (GPS) satellite navigation system, working deep within the US Department of Defense in the early 1970s, could have foreseen that the same technology one day would be used by joggers to track their fitness regimen.

But as technology evolves, it inevitably becomes cheaper and easier to access. Many technologies that have been developed for military or covert purposes, such as remote flying drones, spy cameras and infra-red goggles, eventually find their way into the hands of consumers.

It should be no surprise then that the reverse happens, and that consumer technology has become one of the primary toolsets of global intelligence agencies.

Revelations about the United States’ National Security Agency (NSA) and similar bodies around the world monitoring ordinary citizens through their digital activity have thrown the unintended consequences of digital technology into the spotlight.

The speed at which organisations – both commercial and covert – have learned to use consumer data has been staggering. So too is the picture of someone’s life that can be divined from its study.
Every digital interaction a person has leaves a digital footprint. Even something as simple as carrying a mobile phone can be used to reconstruct their pattern of movement, as their device switches between the nearest available base stations.

"History is littered with examples of technological breakthroughs that have led to unintended or unforeseeable consequences." – Andreas Weigend

Even more can be learned by studying who they are contacting, and yet more again from intercepting and analysing their messages.

The question now being asked is whether forfeiture of personal privacy is the price we pay for interacting in the digital world. It’s a topic that plays on the mind of Andreas Weigend, a former chief scientist at online retail giant Amazon and expert in what he calls “the social data revolution”.

Weigend knows better than many what it is like to live in a “surveilled” society. Growing up in the former German Democratic Republic (East Germany), Weigend has first-hand experience with the old style of government overwatch, having come to the attention of that country’s notorious state security service, the Stasi, which kept a file on him.

Of course the task of compiling a file back then was much harder than for modern intelligence agencies, who can simply vacuum up the massive data trail that citizens leave as they interact on the internet – something Weigend calls the digital exhaust. 

The study and use of the digital data we all generate has been the focus of Weigend’s career. He completed a PhD in Physics from Stanford University in 1991, but his fascination with data has seen him spend the past 20 years consulting to organisations including Goldman Sachs, Lufthansa and the World Economic Forum on data, social-mobile technologies, and consumer behaviour.

Now based in San Francisco, Weigend has written more than 100 papers on how computing intelligence can be applied to commercial problems. He also lectures on this topic at universities in the US and China.

In his two years at Amazon, he received first-hand experience of how personal data can be used by commercial organisations to provide better, more personalised services to customers based on their preferences and past activities.

Weigend says the pooling of massive data reservoirs is changing the balance of power in many interactions. And at times that is working in favour of ordinary citizens. One example is in the hiring of employees.

Whereas once it was much easier for companies to find information on potential employees, Weigend points to services such as glassdoor.com and salary.com which make it easier for candidates to review potential employers.

“As a potential employee you can find out a great deal about the hiring manager,” Weigend says.

Another shift in balance is happening in the health industry. Weigend is convinced that if more people shared data about their experience with treatments, the pooled data resource could be used to solve innumerable medical problems.

“If you add to that, that for US$100 you can get your DNA information and do personalised medicine [where your DNA is used to predict what diseases you may develop, and determine what treatments may work best], then in a utopian world, all the problems are solved,” he says.

Weigend once made headlines when he told a gathering of the United Nations that data was “the new oil”, due to its value both to governments and commercial organisations. But he has since postulated a much darker variation.

“Maybe data is the new nukes,” he muses.

“On average, it [data] seems to be quite an efficient way to run an economy. But the downside is very, very big.”

In the same way a nuclear accident might have grave consequences for the people involved, Weigend says it is worth thinking about the consequences a serious data breach might pose to an economy.

“If there’s a serious data breach, it’s very difficult to estimate what the effects will be on the population,” he says.

“If a non-benevolent dictator comes into power, or if somebody gets hold of these records and has some target group in mind, it can be absolutely terrible.”

But the rapid evolution of technology is giving rise to new services that are generating ever more data on the activities and movements of ordinary citizens. Weigend cites one service that pays people to mount cameras on the dashboards of their cars. These cameras automatically capture images of the licence plates of the vehicles around them, and combine that information with GPS data to determine where various cars are. As the licence plate is photographed by different drivers it is easy to build up a picture of that car’s movements.

While the service is totally legal, and potentially beneficial in the event that a car is stolen, Weigend says it is an example that may have interesting consequences for drivers.

“Now when you combine data from innocent cameras, you can tell where my car has been, and by good analogy, where I have been, and you know how far I’ve driven and how fast I’ve driven,” Weigend says.

“So if you are in insurance, you can argue that the guy doesn’t sleep enough – he only got home at 4am and left at 7am.”

Concerns regarding the collection and use of data have come to a head in San Francisco, where buses carrying employees of data companies such as Google, Amazon and Facebook have been stoned.

"Maybe data is the new nukes." – Andreas Weigend

“Those buses now really symbolise the power struggle between the ‘haves’ and the ‘have nots’,” Weigend says.

“And it’s basically between the data ‘haves’ and the data ‘have nots’, because the argument and the anger goes towards companies that collect data. People don’t know what they collect, they just know that the people are making lots of money.”

This resentment has also manifested itself through the public response to Google Glass, the heads-up display technology that people wear in front of their eyes. Concerns have been raised most specifically in relation to the tiny video camera that these devices contain.

Weigend says the concerns that many people have about digital surveillance are magnified by its prevalence in our lives. The reliance that many people have on tools such as Google and its ubiquitous online mapping service makes it very difficult for those consumers who are concerned about their privacy to take the steps they need to safeguard it – such as shutting off their devices.

“In order for Google Maps to tell me where I need to turn left, then they need to know where I am,” Weigend points out.

“So that pact with the devil is that I get value from Google if I give them data, and of course, they make a couple of bucks on the side. This has been, for the last 10-20 years, the most successful business model in the world.”

Even if people turn off their digital devices, they still face being tracked by technology such as dashboard cameras and Google Glass-like devices. The consequence of this, says Weigend, is effectively there is no privacy, and the discussion itself needs to become one about transparency.

“We called it illusion of privacy,” Weigend says. “[Even for] people who just have a minimal technical understanding, it’s not difficult for them to see they have no choice but sharing.”

The future is one that requires citizens to not just be more aware of the data they are generating, but also the value that their data holds for the organisations that are collecting it.

“You could find a better overall equilibrium by giving people richer ways of expressing themselves and their preferences,” Weigend says.

“I don’t have the wisdom of a solution there. But we should think about charging for use of our data. It’s always a question about monetising data.”

On the flipside, Weigend says it is worth remembering not just the value that consumers get from many of the services that have been built using the data they generate, but also the value they get from generating data for each other. This is manifest most clearly through the review comments that appear on many websites, such as Amazon.

“Sure, somebody can fake it,” Weigend says.

“And believe me, somebody does fake it. But that doesn’t stop the world becoming a better place, given the amount of information we now have accessible to make decisions.

“The balance of power has moved because you can’t really tell people lies anymore.”

Most critical to Weigend though is this question of transparency, to ensure that people who are generating data are aware of how that data is being used. “Treat people as agents,” Weigend says, “Treat them as people, and not as data sources.” 

Welcome to we-commerce 

Andreas Weigend sees clear upsides for companies in the social data revolution, as it provides a means for them to gain a close understanding of customer behaviour.

While Google can track almost everything we do via a smartphone, Facebook has become a central player for identifying people, their influencers and preferences and, vitally, their networks or connections. The era of e-commerce shifted first to me-commerce and now it’s we-commerce.

There’s so much data available these days, it’s important to interrogate it the right way, Weigend insists. Today’s challenge is in determining what you want to know about your existing or potential customers: Where do they go?; What are they looking for?; What do they buy?; and, importantly, Who do they count as friends?

And keep in mind that these days people are paying more attention to their colleagues or friends than mass media.

A further challenge is in gleaning more personal insights from individuals. One way to tackle this is to ensure customers understand what they’ll get out of it if they supply more information, suggests Weigend.

This article is from the September 2014 issue of INTHEBLACK.

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