Big Data Makes Waves on Both Sides of the Atlantic

On both sides of the Atlantic, companies employ the analysis of big data to improve their decision-making processes, and design products and services that are better able to satisfying consumers. Big data also means the mining of user data for market advantage. However, while US companies have learned to exploit the enormous economic potential of big data, the EU is lagging behind, so that the European Commission has unveiled an impressive plan of industrial policy to close the technology gap in data mining and machine learning.

Thus, in the context of a more general strategy to achieve a Single Digital Market, the Commission is working to increase the generation, circulation and use of digital data, in order to support the growth of a European data economy. In particular, the Commission is encouraging the digitization of EU manufacturing, through the support for hyper-fast connectivity and promotion of cloud computing, implementation of the network of things, definition of technical standards for interoperability, and development of computational capacity on the part of both commercial and institutional actors. Furthermore, by promoting a program of economic reforms, the Commission is supporting the free cross-border sharing and circulation of personal data and non-personal data coming both from the private sector and the public sector. Unlike the former, the latter is already legally required to give free access to and freedom of use for the data in its possession. The Commission also assigns a role to antitrust law to monitor the conduct of the powerful digital platforms owned by US oligopolies, so as to level the playing field for all companies, including European businesses, who wish to enter digital markets.

In contrast with Europe, the US has shied away from an interventionist approach, starting with the Obama administration and continuing with the current Federal Trade Commission, who have left US companies (and institutions) free to invest in big data analysis, with the only limitations posed by worries that the algorithmic processing of information can reinforce existing forms of social exclusion and discrimination. For example, what would happen if the task of determining whether someone should be granted a loan is completely delegated to algorithms? Could it happen, for instance, that a given client is barred from credit, not because he/she is a bad debtor, but because he/she is getting divorced, and this places the client in a cluster of individuals who have proved insolvent in the past? Again, since analysis of big data enables the uncontrolled emergence of sensitive personal information, such as ethnicity or religious affiliation, could this lead to people being denied the possibility of enrolling in a given university due to their Islamic faith, thereby producing effects (either involuntarily or secretly) that are contrary to those sought by legislation against discrimination?

In fact, also European policymakers are sensitive to these fears, and have responded with a kind legislation that puts the EU at the forefront in the protection of privacy. Moreover, starting from May 2018, EU legislation on privacy apply to all European citizens wherever they are located, i.e. even outside the borders of the Union. Conversely, from the perspective of US policymakers, before regulatory interventions, it is market rivalry that acts as best warrant against the discrimination and profiling of individuals, since digital companies have to compete to win the favor and trust of consumers, and businesses ignoring forms of user discrimination are likely to lose out to more principled competitors.
The old historical distinction between the two sides of the Atlantic, with America favoring competition over regulation, and Europe favoring regulation ahead of competition, therefore applies also to the Fourth Industrial Revolution.