Mark Zuckerberg appeared before the European Parliament in May to testify about Facebook’s data management. There is some irony in the fact that Facebook, which globalized personal communications, now finds its issues globalized in a very personalized fashion.

This mega contretemps began when the Cambridge Analytica controversy over improperly collected Facebook data zoomed to the top of the charts. A number of commentators excitedly began to speculate that Facebook had been discovered engaging in data manipulation. I expected that they would soon follow with dark hints that the Ford Motor Company was manufacturing automobiles.

Seriously? What business did they think Facebook was in?

As the controversy unfolded, data analysis was widely characterized as darkly villainous and needing to be regulated and restricted. Zuckerberg has been pressed to appear before the British Parliament and has refused. Who knows how many other legislatures will also want to get into the act?

The risk is that many countries will develop public policy and regulations that, while well intentioned, could undermine the ability of individual citizens and commercial operators to communicate with the rest of the world. The time has arrived to stand up for the value of collecting and analyzing data so that the benefits of managed data can continue to be spread far and wide.

Data analysis has been around a long time

Listening to the alarmists, one could be forgiven for thinking that data manipulation originated with the election of Donald Trump. Yet it has been around and providing benefit for decades. For almost a century, magazines have sold their subscription lists to businesses eager to reach the kind of persons who read a particular magazine, without asking the subscribers for permission. Look magazine in the 1930s, for instance, appealed to a different sort of reader than Popular Mechanics. The lists allowed potential customers to receive advertisements relevant to their interests.

In the 1940s, advertisers sought out radio audiences in the millions, looking for listeners who matched their desired markets ‚ÄĒ that is the origin of the ‚Äúsoap opera.‚ÄĚ By the 1960s, the growth of television had turned this exercise into a science, and advertising agencies spent huge sums to reach targeted markets.

The same has been true in politics. Franklin Roosevelt closely followed Gallup poll data analysis as he built a coalition to create the New Deal and later a different coalition to support Great Britain in its fight against Nazism. In 1940 he used this sort of analysis to select his vice-presidential candidate over the strenuous objections of his party in order to win Midwestern states.

If Roosevelt’s approach was horse-and-buggy data manipulation, the 2008 and 2012 Obama campaigns were nuclear physics. The Obama people proudly and correctly explained, to loud applause, that their data analytical skills allowed them to know the likely voting intentions of almost all households.

Long before social media, there were large sources of personal data available for analytics. For example, banks used their mortgage data to identify potential customers for personal lines of credit. Even more useful were government census data. By knowing someone’s address, analysts could match information to census tract data that provided invaluable insights into wealth, behaviour and attitudes.

We need data analytics more than ever

What has changed in this century is the amount of information available. In the first half of the 17th century, there were on average only 640 books in total published each year in Great Britain. Within living memory, it was possible for experts or scholars to read all the material related to their field of expertise.

That has all changed in the past 20 years. The deluge of information now exceeds humankind’s ability to absorb it. The number of e-mails sent per day in 2017 averaged 269 billion. About 500,000 comments are posted on Facebook every minute, and 300 hours of video are uploaded to YouTube every minute. Ninety percent of the data in the world today has been created in the last two years alone. The current output of data is roughly 2.5 quintillion bytes per day. That is the equivalent of 11 billion copies of the Beatles’ White Album.

The choice is either to simply close our eyes to all this information or to develop ever more sophisticated techniques to analyze the data so they can be used for greater insight, planning and application.

Is regulation the answer?

How badly the development of public policy can go astray was highlighted when the Facebook CEO testified before members of the US Congress in April. To paraphrase Winston Churchill, the US government is the worst possible government except for all the others. It has not only endured but succeeded for over 200 years. Regrettably, the Facebook hearing was not the brightest moment in its illustrious history.

Members of Congress cited their grandchildren as sources of information or seemed to have gone to Google, ironically, for briefings. The depth of understanding at times seemed paper-thin.

One inquisitor repeatedly asked if Facebook would change its business model of allowing people to use it for free. A great deal has been made of the free-use model being a means of inducing people to unwittingly provide their personal data, which could cause them harm. Yet before cable, we watched television and listened to radio for no charge. In exchange, we voluntarily watched or heard commercials, with no apparent lasting damage.

Notwithstanding limited understanding of data management or the business realities driving it, almost all the legislators proposed regulations as the solution to the problem. They seemed particularly taken by European regulations without recognizing that the company at the centre of the matter they were investigating, Cambridge Analytica, was European.

The digital economy has made extraordinary progress because it has been free from burdensome regulations. Those who believe regulating social media is the solution should take a good look at Internet regulation in China.

The digital economy has made such extraordinary progress because it has been free from burdensome regulations. It’s hard to imagine that poorly informed legislators could produce a regulatory regime that would resolve the issues and allow the industry to continue to develop. Those who believe regulating social media is the solution should take a good look at the experience of Internet regulation in China.

The more troubling assertion is that manipulation of data results in manipulated people. The suggestion that Donald Trump was elected or the British voted to leave the European Union because people received a few messages based on data analytics speaking to their concerns is denigrating to the average citizen. There is something elitist about the argument that the average person is easily misled and incapable of making their own judgments and, therefore, needs their social betters to decide what they should see. People will make their own decisions based on their needs and experiences ‚ÄĒ they have a pretty good idea of what is best for them.

The opportunity to manipulate data and apply the results in communicating to the market helps small companies far more than the large ones. It enables the local yoga studio to reach out affordably to possible customers in its neighbourhood. It allows community groups to mobilize support. We recently saw $15 million raised on social media to help a small town whose hockey team had been involved in a tragic bus collision.

On a wider scale, the ability to manipulate data offers the potential to dramatically improve health care for all, provide first-class education to every child and help entrepreneurs across the globe begin new businesses. This argument needs to be made forcefully and repeatedly, especially on social media ‚ÄĒ by, of course, targeting the right audience with the right message.

The advent of digital technology and the Internet has been the greatest liberator of humanity since the invention of the printing press. Everyone can freely speak to everyone else in the world. Knowledge is no longer limited to the few. But given the quantity of data circulating, state-of-the-art analytics is the prerequisite to benefiting from this great opportunity of free expression. Otherwise, the great mass of data is a locomotive without wheels.

Nothing is perfect, including data manipulation techniques. Invasion of privacy and fraud will always be threats. Surely, increased competition, innovation and transparency will bring about better solutions to the flaws of data analytics than attempts to turn the clock back with ham-fisted restrictions.

Thomas Jefferson once said, ‚ÄúWere it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.‚ÄĚ I think I know where he would stand on this issue.

Three cheers for data manipulation!

Photo: Facebook CEO Mark Zuckerberg testifying before the House Energy and Commerce Committee hearing regarding the company allowing third-party applications to collect the data of its users without their permission and also its response to Russian interference in the 2016 US residential election. EPA, by MICHAEL REYNOLDS.

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George Bothwell
George Bothwell has spent his career at the intersection of commerce and public policy in North America and Europe. He has led marketing and communications at Coca-Cola, Bank of Montreal, Barclays Bank and Atomic Energy of Canada.

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