Tech's Fight For the Upper Hand On Open Data

The fundamental question is not privacy - since consumers have demonstrated repeatedly their willingness to trade it for something they consider more valuable like speed or access - but it's fair value to the provider as well as the user. JL 

Rana Foroohar reports in the Financial Times:

The worry is that if private companies are granted the authority to decide who gets to participate in the digital marketplace, then they could shun whoever they like, however they like. If “data is a central type of capital”, then it must be freely available to everyone  and a private company cannot decide that publicly accessible, searchable data is their private property. (Are) the products and services we receive in exchange for our data are worth it, or should the terms of the exchange be reconsidered?

One thing that’s becoming very clear to me as I report on the digital economy is that a rethink of the legal framework in which business has been conducted for many decades is going to be required. Many of the key laws that govern digital commerce (which, increasingly, is most commerce) were crafted in the 1980s or 1990s, when the internet was an entirely different place.

Consider, for example, the US Computer Fraud and Abuse Act. This 1986 law made it a federal crime to engage in “unauthorised access” to a computer connected to the internet. It was designed to prevent hackers from breaking into government or corporate systems. The mythology is that the law was inspired by War Games, the 1983 movie starring Matthew Broderick.

While few hackers seem to have been deterred by it, the law is being used in turf battles between companies looking to monetise the most valuable commodity on the planet — your personal data. Case in point: LinkedIn vs HiQ, which may well become a groundbreaker in Silicon Valley. LinkedIn is the dominant professional networking platform, a Facebook for corporate types. HiQ is a “data-scraping” company, one that accesses publicly available data from LinkedIn profiles and then mixes it up in its own quantitative black box to create two products — Keeper, which tells employers which of their employees are at greatest risk of being recruited away, and Skill Mapper, which provides a summary of the skills possessed by individual workers.

LinkedIn allowed HiQ to do this for five years, before developing a very similar product to Skill Mapper, at which point LinkedIn sent the company a “cease and desist” letter, and threatened to invoke the CFAA if HiQ did not stop tapping its user data. LinkedIn’s lawyers argued not only that this was a violation of users’ trust, but that its client was a “private entity with a right to control access to its private property” — meaning not only its servers, but the consumer data on them, too.

None of this is uncommon in the Valley. Data scraping companies, which can seem a bit creepy, are rife — as are big companies that watch little firms experiment with new ideas, and then try to steal and/or crush them once they reach critical mass (either with a cease and desist letter, or by acquisition).

I have been inundated recently with calls from small tech firms complaining about anti-competitive practices on the part of the larger platform companies. Most will not go public for fear of never getting another round of funding or a job (Silicon Valley has quite the omerta code, as I’m discovering). But HiQ figured it had nothing to lose, because if it could not get LinkedIn data it would be out of business. The US District Court in Northern California, which is hearing the case, agreed, and gave it an injunction to continue scraping while the legal battle moves forward (LinkedIn filed its opening brief last week).

Meanwhile, a case that might have been significant mainly to digital insiders is being given a huge publicity boost by Harvard professor Laurence Tribe, the country’s pre-eminent constitutional law scholar. He has joined the HiQ defence team because, as he told me, he believes the case is “tremendously important”, not only in terms of setting competitive rules for the digital economy, but in the realm of free speech. According to Prof Tribe, if you accept that the internet is the new town square, and “data is a central type of capital”, then it must be freely available to everyone — and LinkedIn, as a private company, cannot suddenly decide that publicly accessible, Google-searchable data is their private property.

People may not like what HiQ is doing, but just as sex offenders have a right to use the internet, so data scrapers have a right to make their living in the public space, at least for the moment. The worry is that if private companies are granted the authority to decide who gets to participate in the digital marketplace of ideas, then they could shun whoever they like, however they like.

For its part, LinkedIn argues that its position is the speech-maximising one. It believes that if users knew their data were freely available to unrestricted collection and access by third parties, they would be less likely to put it online. This is a good point, and perhaps one that consumers and users of the internet in general should think more carefully about.

Whether your concern is anti-competitive business practices, or the preservation of free speech, one thing that we have to grapple with is that we are both the raw material and the end consumer of what is being sold online. We are the product.

Given that, we might want to think much more carefully about three things. First, the extent of information that we reveal and all the myriad ways in which it can be used. Second, whether the products and services we receive in exchange for our data are worth it, or whether the terms of the exchange should be reconsidered. And third, how governments may shift the rules of the new digital playing field, and what it will mean for capitalism in the 21st century.