Evidence of meeting #119 for Access to Information, Privacy and Ethics in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was data-opolies.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bianca Wylie  Co-founder, Tech Reset Canada
Maurice Stucke  Professor, College of Law, University of Tennessee, As an Individual

11:55 a.m.

Liberal

Anita Vandenbeld Liberal Ottawa West—Nepean, ON

Thank you.

It's basically our digital governance study.

11:55 a.m.

Co-founder, Tech Reset Canada

11:55 a.m.

Conservative

The Chair Conservative Bob Zimmer

Ms. Vandenbeld, that's time.

Next up for five minutes is Monsieur Gourde.

11:55 a.m.

Conservative

Jacques Gourde Conservative Lévis—Lotbinière, QC

Thank you, Mr. Chair.

I thank the witnesses for being here this morning.

There seem to be some grey areas in the new digital environment that has been prevalent over the past two or three years. I think Canadians feel that they are seeing only the tip of the iceberg.

Ms. Wylie, you talked about the importance of understanding what is happening. Unfortunately, I don't know whether Canadians are aware of everything that is happening. What do you think?

11:55 a.m.

Co-founder, Tech Reset Canada

Bianca Wylie

I completely agree with you.

11:55 a.m.

Conservative

Jacques Gourde Conservative Lévis—Lotbinière, QC

Okay.

Mr. Stucke, what do you think?

11:55 a.m.

Prof. Maurice Stucke

It's true that we don't know that much.

In fact, I'll bring this out for you. Facebook did a study. It was called the emotional contagion study. It altered its algorithm, so that it gave some users more positive news and other users more negative news. They wanted to see what impact that had on individuals' behaviour. The ones who got more positive news were more positive in their posts, and the ones who got more negative news had more negative reactions.

It was only because this study was published that it created such an outcry. You realize, then, the power that these companies might have to affect the public discourse.

This lack of transparency will only increase as we migrate from a phone world to the world of a digital personal assistant, in which perhaps one or two of these data-opolies could very much control, with Google with its Home, and Amazon with Alexa.

Now you're going to have, in orders of magnitude, a greater amount of data and greater interaction with the digital assistant, in the home, in the car, on the phone and elsewhere. There's going to be very little transparency on how that digital assistant is going to recommend the products and services it provides—what it features, what it says, what it does and the like.

We're really moving into an unexplored terrain.

11:55 a.m.

Conservative

Jacques Gourde Conservative Lévis—Lotbinière, QC

Ms. Wylie, Mr. Stucke, in your opinion, whose responsibility is to denounce that situation and to educate Canadians on the new reality of personal information getting around and being used to profile our behaviour, economically speaking or otherwise?

Ms. Wylie, what do you think about that?

11:55 a.m.

Co-founder, Tech Reset Canada

Bianca Wylie

I think a lot of people are sort of culpable in where we are. As a citizen, I have perhaps legitimized the last 10 years of how the government has been acting by not being more vocal. As a technologist, I saw hints of some of this, but in that time I also wanted to believe that action was starting to occur within government to take some more control of the situation.

That didn't happen. To me, this is also where that shift.... There's a responsibility on behalf of government to protect the people who live in this country. We talk about the trust in government being low sometimes. What's happening now is completely destabilizing the legitimacy of the government. To be acting as though this isn't a big deal—we're just going to do little tweaks here or there—when we don't have fundamental, big changes under way, as well as big questions around the asymmetrical power that impacts the people who live here, a lot, is very problematic.

At this point in time, this falls to government. I don't want people to have to become hyper data literate in their time off right now. This is why we have laws and policies, to make sure that people don't have to be overly engaged in this. That's where we are now. People are having to get super engaged in this because they realize how vulnerable they are. They're not protected at this point in time. This is problematic to me, and this really falls on government.

If you're a company and you're allowed, of course you're going to do it.

Noon

Conservative

Jacques Gourde Conservative Lévis—Lotbinière, QC

Mr. Stucke, what is your opinion?

Noon

Prof. Maurice Stucke

In the past 10 years we've had a natural experiment in relying on market forces. The belief was that if we leave it to the free market, the free market forces will allocate data and privacy in ways that promote our needs. The problem—even with the market fundamentalists—is that we didn't appreciate these barriers to entry and these network effects, which are unique in this data-driven market.

One thing is that market forces will not necessarily provide the solution. We should not rely on that. We can have very powerful firms that can dominate an industry for years and could adversely affect innovation as well.

Given that, there is a role for the government. What type of role should the government play? Up to this point the government has more or less taken a “notice and consent” standpoint, which is that the company just has to provide a privacy statement and that, as a result, will be sufficient.

I was at a conference last weekend. Joseph Turow from the University of Pennsylvania does a study every few years. What people have found is that when you say to someone that a company has a privacy statement, they assume the company is protecting privacy, even though the privacy statement could be to the contrary. Putting too much on the consumer to read and to navigate this.... It is too much.

I would argue instead to look at some good privacy-by-design or privacy-by-default mechanisms to make it easier on the consumer so they don't have to read these privacy notices. Even when they read the privacy notices, many of them say there is no ability to negotiate. What would be an alternative to this scenario? Here, it might be data minimization—that a company can't collect data if it's not necessary for them to provide that product, and the individual can say no. They have universal opt-out. They would expressly have to opt in for particular instances, and it would be well explained to them.

That's a little something that I would encourage you to explore.

Noon

Conservative

The Chair Conservative Bob Zimmer

We had better move on to Mr. Picard, for five minutes.

Noon

Liberal

Michel Picard Liberal Montarville, QC

Thank you.

Professor, you talked about establishing the value of the data owned by me or by anyone who supplies personal data. Let's say I'm a company that invests a huge amount of money—billions—in software. My deal is that you give me your name and number and address, and I'll give you access to billions of dollars of research for you to have live, and write anything you want on a blackboard, and that's it. In your wildest dreams, you would never be able to access or work with this technology if someone didn't give it to you. That's a fair deal for a few names and numbers compared to the price of the investment I made to develop the software.

How do you evaluate the data then?

Noon

Prof. Maurice Stucke

Right now there really is no way to.... There are instances where data is valued and where data is bought and sold. There, you can ask what the market value of that data is and how it's used, but often there is no sort of market value for that data. It's hard, because you don't know exactly who is using that data for what purpose, and how that data may be used later on when it's merged with other datasets. I really don't know the value of my data, and I don't know if I'm going to get a fair deal, much like the earlier example of getting a cup of coffee. I don't know if that's a fair exchange.

The other thing is that in a competitive market I would have alternatives and I could see how much they would pay me for my data. One thing is, how do you unilaterally assess the value of the data? Second, is there sufficient, robust competition so I can get a true market price for my data?

12:05 p.m.

Liberal

Michel Picard Liberal Montarville, QC

Would you expect me to ask Facebook for royalties every time they use my data with someone else?

12:05 p.m.

Prof. Maurice Stucke

What would be the market clearing price in that instance? If you ask Facebook, they have to provide you, first of all, with the data, but also your content that you post on Facebook. You're ostensibly working for free. You're a free labourer providing content on a platform that's used to attract other people. Now if you were to say, “You need to compensate the individual for the data and the content”, what would then be the number? It could be quite arbitrary because you don't have a robust market right now. You have one dominant social platform.

12:05 p.m.

Liberal

Michel Picard Liberal Montarville, QC

With my personal data, if I decide to share with the people, with the world, what I ate for breakfast, that's my own business. They know my name because I'm on Facebook. They know my face because my face is on Facebook, except for those who put the face of their dog on it. Anyway, they know who I am, what I eat, what I wear and where I go, because I want to share that with the world.

In order to be able to do that, I use a software that I don't have the means to develop myself. I would never be able to use such a tool. They give it to me for free, practically. In fact, there's no such thing as a free ride in this world. In exchange, as with any market value, because market value is not a dollar sign but what you get in return for your offer, I have billions of dollars of researched software to make my life funnier and more exciting. That's a fair deal, don't you think?

12:05 p.m.

Prof. Maurice Stucke

Is it a fair deal for the consumer whose data is being collected and tracked?

That is something that the Germans' Bundeskartellamt is looking at. They're investigating Facebook for, not so much the data that Facebook collects when you're on Facebook, but when you're then going to any other website in which there's a Facebook “Like” button. Their consumers were not aware that their data was being collected. Whenever they went to the website of, let's say, The New York Times, or the Wall Street Journal, or any other website, Facebook was collecting data on them.

The other point is that, yes, there are benefits—and I've testified before the European Commission on this—in accessing data, but now you can control the terms. The data-opoly can then determine with whom it's going to share the data, and under what terms and under what conditions, and then with whom it won't. Now you're putting a lot of faith in one particular firm. Look at AT&T and Bell Labs, back in the seventies, which had lots of innovations. Now you're relying on that company and what innovations it wants to promote and not promote.

12:05 p.m.

Liberal

Michel Picard Liberal Montarville, QC

I have 30 more minutes of questions. How much time do I have?

12:05 p.m.

Conservative

The Chair Conservative Bob Zimmer

You're 20 seconds over, but we're going to have some more time at the end.

12:05 p.m.

Liberal

Michel Picard Liberal Montarville, QC

Okay. Thank you.

12:05 p.m.

Conservative

The Chair Conservative Bob Zimmer

I'm usually pretty lax with the time. I like to see themes follow through, so rather than cut them off, we want to hear what they have to say.

We'll go to Mr. Kent for another five minutes.

12:05 p.m.

Conservative

Peter Kent Conservative Thornhill, ON

Thanks again, Chair.

Let me start by saying that I think the mega-data companies have provided a multitude of very meaningful benefits over the last couple of decades. Artificial intelligence is spectacularly beneficial in some areas, algorithmic programs, and so forth.

However, we were surprised to learn in this committee, back in April, when a Facebook senior Canadian executive and the deputy chief privacy officer for Facebook from the west coast of the United States appeared, and although they and others had many meetings with senior ministers of the Canadian government and senior decision-making officials, there wasn't a single registered Facebook lobbyist on the Commissioner of Lobbying of Canada's registry site.

It's good to note that about a month later, Facebook has registered one official lobbyist, and we don't know whether these executives are still unofficial. They explained their meetings with the government officials as assisting them to understand the capabilities and processes of Facebook in, I guess, governmental terms.

Professor Stucke, you wrote an article entitled, “Should We Be Concerned About Data-opolies?” It is a very detailed article. You made one point, saying:

Companies need things from the government; governments often want access to data. When there are only a few firms, this can increase the likelihood of companies secretly cooperating with the government to provide access to data. Moreover, a dominant firm is likely to lobby the government on many more fronts.

Could you elaborate on that a bit with regard to perhaps potential compromises of government regulation when it comes to the consideration of a Cambridge Analytica-AggregateIQ-Facebook scandal?

12:10 p.m.

Prof. Maurice Stucke

Right. It has been a historical concern of antitrust that once you have significant economic power, that could translate into political power, and you then create policies that promote the dominant firm.

Yesterday in class we talked about the DuPont case, which is an antitrust case. There, DuPont was very successful in erecting tariffs on cellophane to protect its dominant share in the market. There is no doubt that you could probably cite examples of that as well. There was concern that you could then start creating policies that help protect the dominance.

The unusual thing about these data-opolies is when it starts coming to surveillance. I was recently in Hong Kong giving a similar talk, and one of the concerns there was how the government is getting data from these private data-opolies to help create a credit score on consumers—like a general sort of citizen score—to better monitor and track them and the like. They're basically co-operating with these data-opolies. You have a relationship whereby they're providing data to the government, and then the government is providing favours to the company. This is a historical concern with a new twist.

12:10 p.m.

Conservative

Peter Kent Conservative Thornhill, ON

Are there comments?