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EU regulators misunderstand big data

Joshua New, policy analyst with the Center for Data innovation | May 28, 2015
More data doesn’t mean less competition.

The reason Facebook enjoys such a large user base is because consumers find value in participating in the largest social network. Restricting the size of the network -- or circumscribing the company's ability to leverage user-generated data to offer more services -- would necessarily reduce the value consumers receive. If regulators in the EU are concerned that data gives certain companies an unfair competitive edge, they should encourage a more robust data economy so that new entrants and incumbents both can easily collect and share data. Strict regulations that prevent companies from exchanging data could create the exact anti-competitive problem that regulators are trying to avoid -- because startups are better able to compete with their larger rivals if they can easily collect and buy data. Regulators in the EU should be careful not to craft policies based on a misunderstanding of the role of data in business, as these policies would adversely impact European companies, reduce value for consumers, and hinder the advancement of data-driven innovation around the world.

 

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