Google Spain Case Raises More Questions Than It Answers

I'm an enthusiastic supporter of greater control over your data. But I'm really struggling with the European Court of Justice ruling that you can stop a search engine linking to something lawfully published about you in your local newspaper's online archive.

The case in question concerned the appearance of someone's name in a local Spanish newspaper announcement for a real-estate auction connected with proceedings to recover social security debts 16 years ago. The individual concerned (openly named in the judgment, ironically) claimed that the proceedings had been "fully resolved for a number of years and that reference to them was now entirely irrelevant." He failed to obtain an order banning the newspaper from carrying the item in its online archive, but succeeded in getting Google Spain to remove any links to it.

But surely if it was lawful for the local newspaper to have published the item of data - and it remains okay for it to publish the data via its website - then it should be okay to allow someone to find it?

I mean, why stop at gagging Google's local site? Why not make local libraries cut tiny holes in their microfiche records?

On this point, the ECJ cited problems where multiple jurisdictions were involved, even though this was purely Spanish scenario:

"Given the ease with which information published on a website can be replicated on other sites and the fact that the persons responsible for its publication are not always subject to European Union legislation, effective and complete protection of data users [subjects?] could not be achieved if the latter had to obtain first or in parallel the erasure of the information relating to them from the publishers of websites."

But how could removing links to an item from a national search engine achieve "effective and complete protection" of the data subject when the same items are lawfully available via a national newspaper's online archive anyway? Surely a national problem such as this has to be dealt with at source, or not at all?

Another key issue is that the ECJ didn't seem to weigh up all the possible public interests against the particular individual's rights to 'respect for private life' and 'protection of personal data'. 

Surely, for example, there was some public interest in the publication of the notices of auction complained about, such as achieving a fair price for property being sold to pay a debt to the state? Perhaps if that requirement had been abolished you could make a case for requiring the deletion of public notices relating to them. But, absent their abolition, I'm not sure you can say it's "entirely irrelevant" that someone was mentioned in such a notice, even if that were years ago.

And is there not a public interest in being able to more readily find published material via search engines? Consider the huge variety of research processes that must now rely on search engines, from journalistic research, to employment checks, to official background checks. What holes will now emerge in such research processes? Will records be kept of all the links that search engines were told to remove? If so, where will those records be kept? Who will be allowed to access them? Aren't researchers now on notice that they should check individual newspaper archives for data that search engines aren't allowed to let you find? How many won't bother when they really should?

The problems with the judgment don't end there, as is demonstrated by the tortuous path the ECJ took to reach its result (explained here). 

All of this underlines the need for careful policy thought and regulatory clarity around these issues, rather than the celebratory gunfire heard in some quarters. This judgment raises more questions than it answers.

 

Has The Initial Term Of Your #Mobile Contract Expired?

Are you a cash cow?

Today I contacted Vodafone to cancel the 3G contract I took out as part of an iPad offer a few years back. It's included as an extra number on my mobile bill, so it was easy to kind of forget it in the total. Turns out I'd diarised the wrong cancellation date, and could've cancelled last October, when I was first 'out of contract'. Okay, so I'm a bit of a mug (worse, I'd long ago switched the iPad to 'airplane' mode, so wasn't even using the 3G option), but I do tend to have a lot more important things on my mind. The decent thing would have been to remind me at the time the intial term expired to give me a chance to consider if I wanted to extend, switch or cancel. But that's not part of the service...

The first customer service person I spoke to wasn't allowed to process my cancellation request. She had to put me through to another person who could. I protested, but to no avail. Needless to say, the next person began putting me through the whole process again, presumably so I'd lose the will to cancel and consider an upgrade.

I toughed it out and insisted on cancellation. The representative agreed to put that through, but said it would only take effect in 30 days' time. Hang on, I said. If it was true that I was "out of contract", as they kept saying I was, then how could Vodafone still be entitled to 30 days of my money - not to mention the extra 6 months they'd already enjoyed through my diary error? I knew the answer, but I wanted to hear the explanation.

You see, they didn't really mean that I was 'out of contract' in the sense that the contract had somehow expired. That would be misleading. If the contract had really ended, Vodafone wouldn't have been entitled to be paid for the extra 6 months, never mind the 30 days. Instead, they only meant that the minimum term of the contract had expired. That meant the contract had actually continued subject to termination on 30 days' notice - so it could have gone on for 30 years if I hadn't called to cancel it. 

When I asked if Vodafone has a process for notifying customers when they are 'out of contract' (i.e. when their initial term has expired), the representative said they did not.

Of course, Vodafone does have a process of calling you about upgrade opportunities a long time in advance of when the initial term expires. But that's just marketing. They then go quiet around the time the initial term expires, so you bear the risk of beoming a rolling 30-day cash cow.

I wonder how many customers paid for an iPad or other device through a 3G contract and forget it's still appearing in their bill even though the initial term had ended? And how many get a new mobile and don't realise they're still paying for an old one they thought was 'out of contract'? Are they to be treated as stupid people, or people with a hell of a lot of other stuff on their mind who could do with a reminder? Would they be prepared to pay a small admin charge for a reminder at the right time, or should such a reminder be a part of any decent service?

It's worth noting that Ofcom banned "automatic rollover contracts" for consumers and businesses with no more than 10 employees in September 2011. But the ban only applied to landline voice and broadband services, and it only means the customer can't be automatically renewed into another extended 'minimum contract period'. The new rule is that the maximum duration of initial contracts can only be 2 years; and at that point users must be offered an option to contract for a further maximum duration of 12 months. That means they are prompted to extend, switch or cancel.

Should a similar rule be brought in for mobile services?

 

Twitter Gnip Shows Why Social Media Should Share Revenue With Users

Source: Financial Times

Like Google's declaration of war on the human race, the news that Twitter will buy Gnip illustrates why social media platforms should share their Big Data revenue with users. Indeed, they would seem to have no choice if they are to survive in the longer term.

Gnip's CEO claims that:

"We have delivered more than 2.3 trillion Tweets to customers in 42 countries who use those Tweets to provide insights to a multitude of industries including business intelligence, marketing, finance, professional services, and public relations."

And that's not all. Gnip also has "complete access" to data from many other social media platforms, including WordPress, the blogging platform, and more restricted access to data from other platforms, such as Facebook, YouTube and Google+. 

Quite whether users consent to all that is an issue we'll return to in another post shortly. 

Meanwhile, Twitter suggests that Gnip's current activities have "only begun to scratch the surface" of what it could offer its Big Data customers in the future. Yet, from a user's perspective, Twitter has barely changed since Gnip began its data-mining activities. So are users receiving enough 'value' for their participation to keep them interested?

The social media operators would argue that their platforms would never have been built were it not for the opportunity to one day make a profit from users' activity on those platforms. And it may look like the features have not changed much since launch, but part of the value to users is the popularity with other users and it costs a lot to keep each social media platform working as the number of users grows. Each platform also has to keep up with changes to other platforms so users can continue to share links, photos and so on. That means platforms tend to lose a lot of money for quite a long time, as the FT's comparison chart shows. 

But analysing the value to users gets mirky when you consider that the social media are already paid to target ads and other information at users based on their behaviour, and that the cost of that type of Big Data activity is reflected in the prices of the goods and services being advertised. 

And it doesn't seem right to include the cost of buying and operating a separate Big Data analytics business, like Gnip, in the user's value equation if the user doesn't directly experience any benefit. After all, that analytics business will charge corporate customers good money for the information it supplies, and the cost of that will also be reflected in the price of goods and services to consumers. 

In other words, social media's reliance on revenue from targeted advertising and other types of Big Data activity means that social media services aren't really 'free' at all. Their costs are baked into the price of consumer goods and services, just like the cost of advertising in the traditional commercial media.

And if it's true that the likes of Gnip are only just scratching the surface of the Big Data opportunities, then the revenues available to social media platforms from crunching their users' data seem likely to far exceed the value of the platform features to users. 

Yet user participation is what drives the social media revenues in the first place (not to mention users' consent to the use of their personal data). The social media platforms aren't publishing their own content like the traditional media, just facilitating interaction, so there's also far less justification for keeping all the revenue on that score. And it seems easier to switch social media platforms than, say, subscription TV providers. 

So the social media platforms would seem to have no choice but to offer users a share of their Big Data revenue streams if their ecosystems are to be sustainable.

Bischoff's Understated Record Speaks For Itself

The departure of Lloyds Banking Group chairman, Sir Win Bischoff, provides another reminder that nothing much has changed in UK banking. 

The so-called 'City grandee' has spent the past five years as chairman of a banking group that's been fined at least £40m so far, and owes customers £10bn in compensation for mis-sold PPI. The fines have included £28m for mis-selling individual savings accounts and income protection insurance products between 2010 and 2012. Yet Win still talks of banking with his 'stomach' (as did the Lehman's gang) and trots out the languid understatement that "all of us have to be very much more mindful of whether the product or service we provide actually meets the needs of the customer." 

Win doesn't need to say that he hates all this new-fangled regulation - we get that from the career stats - but he reminds us anyway, in typically understated fashion: "I still hark back to the days when I would have tea with the governor of the Bank of England and he wouldn't be sitting there with the rule book. He would say '"Win... is this the right way of going about it or should you be in this kind of business'." 

History doesn't record how often the governor actually said this to Win, or what Win said or did in response (if anything). But it's pretty clear that tea consumed in this manner was spectacularly harmful for the UK economy. Unless, of course, you count steadily declining bank competition, mortgage endowment mis-selling, consistent underinvestment in payment systems and a century of under-funding small businesses as wondrous achievements... (and, you know, I think Win just might!).

Anyhow, Win will have plenty of opportunities for cosy chats over a nice cup of tea in future, as he's off to head up the Financial Reporting Council, the accountancy 'watchdog'. They'll relish his capacity for understatement over there, too. You see the FRC has been having a little difficulty in defining the nature of scepticism in the audit context...  biscuit?

Optional Annuities Could Mean Working Pensions

Odd that Will Hutton should claim in The Observer, of all places, that making the purchase of pension annuities optional will end in long term social disaster. UK pensions are already a long term social disaster. Hutton himself points out that "400,000 people buy £11bn of annuities every year", yet "the annuity market [has become] overstretched, offering indifferent and often wildly different rates." 

This is because consumers have no choice. There's no competitive pressure at all on the insurance companies or their agents to remove unnecessary middlemen, reduce fees to customers or simplify products. In fact, the Financial Services Consumer Panel recently found that the annuities industry continued to focus on increasing its revenues through product complexity, even when consumers were given the option to shop around. No one in the industry seized the opportunity to make annuities more transparent and better value for the consumer. [Update on 26 March: Legal & General has suggested the market for individual annuities will shrink by 75% - rather endorsing the government decision to make them optional!].

Will Hutton argues that rather than make annuities optional "the response should have been to redesign [the market] and figure out ways it could have offered better rates with smarter investment vehicles". But that seems naive, given the FSCP findings. The industry had that opportunity and declined it. 

It's equally naive to suggest that less demand for annuities will mean losing a valuable opportunity for insurance companies to 'pool the risk' of funding pensions. The industry merely sees risk pooling as a chance to exploit asymmetries of information to line its own pockets. 

The only way for the government to shake up the cosy annuities cartel was to remove the implicit guarantee that everyone would have to buy an annuity. 

Mr Hutton then seeks to set up some kind of moral panic that the 'freedom to buy a Lamborghini' instead of an annuity will result in people simply frittering away their life savings. Not only does this suggest that he'd rather your life savings were placed in the grubby mitts of the annuities industry so they can buy the Lamborghinis, but it also insults the consumers who face the abyss of the annuities market. Their concern clearly arises from the lack of decent returns, not because they're eager to spend the cash on exotic cars.

Finally, Will suggests that the State is entitled to control how you invest your pension money because it allowed you to avoid paying income tax on your pension contributions in the first place. If you agree with that, then presumably you would say the State is entitled to control how you spend every penny of your income that it has allowed you to keep. This of course places a great deal of trust in the State's financial management capabilities that we know from bitter experience is ill-deserved. As a result, it's more likely that citizens will gain greater control over the allocation of 'their' tax contributions, not less (as I've joked about previously). But regardless of whether it's the State or the taxpayer who is in control, neither party wants the State to be saddled with the consequences of an uncompetitive and opaque annuities market. That would only suit the annuities spivs. Again, the only alternative is to expose the market to competition from all manner of transparent savings and investment opportunities. 

Importantly for economic growth, the freedom to avoid annuities opens up the potential for £11bn a year to be invested directly into the productive economy at better returns in much the same way that the new ISA rules will liberate 'dead money' from low yield bank deposits. Not only could we see some pension capital crowd-invested into long term business and infrastructure projects in a way that won't be interrupted by the need to purchase an annuity, but those in draw-down might also consider some 3 to 5 year loans to creditworthy borrowers as a way to generate some additional monthly income.