“Experts often possess more data than judgement,” Colin Powell once said. Companies have been racing to collect as much data on people as possible. This vast data collection includes information on our location, purchase history and past behaviour.
The race to collect data has intensified. How much data on each of us is out there? It is estimated that companies now hold ten times more data on us than they did in 2005. Former Google CEO Eric Schmidt has said that every two days we create as much information as we did from the dawn of civilisation until 2003.
Data is often described as “the new oil” and is hugely valuable. Data helps companies sell to their customers on a scale they never thought possible. Companies often feel pressure from within to collect more and more data on customers.
A note of caution to those companies. The current instinct of some seems to be to collect, slice, dice and commoditise as much data as possible. This instinct must be tempered. Just as companies have been becoming more sophisticated in their use of data, governments have been becoming more sophisticated in drafting laws to regulate the use of personal data.
Across the globe we have seen governments execute a crackdown on how companies use data. The newly-agreed EU General Data Protection Regulation is one example of how data laws are becoming stricter. The GDPR will put pressure on companies to collect and use data responsibly. It will be a law with global reach, applying inside and outside the EU. It will give customers maximum control on how their data is used.
Companies will often need clear consents from customers if they want to mine their data. Customers will also have a right to have their data deleted and can seek compensation if companies misbehave with their data. Companies can also be fined up to 4 per cent of their global annual turnover for data protection breaches.
These laws are a powerful argument against collecting too much data. In simple terms, the more data a company collects, the more responsibility it has to its customers to seek consent for it, to change it or to erase it.
In this digital age, data is more important to companies than ever. But companies have to be smarter in the amount of data they collect or risk fines or compensation for having collected too much. Companies should remember the famous movie quote: “More isn’t always better. Sometimes it’s just more.”