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Regulating the Data Industrial Complex

Apple CEO Tim Cook recently issued a prominent warning about the current state of technology. He argued that bad actors have weaponized personal information, exploited user trust, and undermined our shared sense of what is true. According to Cook, AI cannot make meaningful, responsible, and efficient progress by cutting corners. It must respect human values and acknowledge privacy as a fundamental human right. “Advancing AI by collecting huge personal profiles is laziness, not efficiency,” suggested Apple’s CEO. However, the internet was quick to accuse both Cook and his company of hypocrisy.

Many tech titan disagree, and indeed have conflicting interests. Cook and Mark Zuckerberg have exchanged public barbs. A recent Facebook Newsroom post flatly reads, “Tim Cook has consistently criticized our business model and Mark has been equally clear he disagrees.” Zuckerberg has also clashed with Elon Musk on AI issues. And the list goes on. The tech industry lacks consensus and isn’t adequately self-regulating, as evidenced by frequent data breaches and scandals. Will it be able to guide the hands of regulators in a manner that is both moral and self-preserving?

This conversation cuts deep into marketing tech. There are no easy answers. Setting aside the ethical implications of data, some marketers have felt overwhelmed by the explosion in marketing tech tools that rely on it. These tools have the potential to improve marketing, both for marketers and consumers, by increasing the relevance of promotions, but this value could get lost in the big data debate.

Dave Parker, a partner at Seven Peaks Ventures, told me, “The most successful marketing tech companies will offer more than a single point solution, they will solve multiple pain points across organizations and big problems that are pervasive across large markets.”

When asked about new data laws, investor David Ellis said, “I think this will be a very minor hiccup in the short-term.” He told me that these laws have the potential to reduce consumer aggravation. However, new platforms also enable marketers to provide information that is of legitimate interest to consumers. Ellis thinks that these platforms can overcome the short-term complications of regulation.

Ellis is Managing Director at EGL Holdings, an early investor in The Pedowitz Group (TPG), and an advisor to Grapevine6. The latter is a company that seeks to turn touchpoints into selling points. Grapevine6 analyzes personal digital profiles and curates timely, trusted third-party content that can be shared to social media in order to establish thought leadership. This business model is, of course, data-driven. Ellis said that the program analyzes “anything about you on the web and delivers to you, every morning, three or four articles that would present you as a thought leader.” Businesses like this offer clear value, premised on consent, but in other territories throughout the so-called “data industrial complex,” it gets murky.

Additionally, some regulators will have to overcome a gap in their own technological knowledge if they wish to craft socially beneficial and effective rules.

In his public comments, Tim Cook said that Apple is in full support of a comprehensive federal privacy law in the United States. “Companies should challenge themselves to de-identify customer data — or not to collect it in the first place,” he said, during a list of recommendations that he framed as essential rights.

Cook said that some U.S. companies oppose any form of privacy legislation and others might endorse it publicly but resist it behind closed doors. He insisted that these companies have nothing to fear and suggested that innovation stands to benefit from public confidence.

“Technology’s potential is, and always must be, rooted in the faith people have in it, in the optimism and creativity that it stirs in the hearts of individuals, in its promise and capacity to make the world a better place,” he said.

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