7 minute read.
When we interact with technologies on a daily basis—phones, cars, computers, ATMs, and so on—we leave behind digital footprints. The company that produces the software for these devices then owns that data and, in turn, gains insights about our behavior.
But what if one company owned every software in the world? Are we the sum of our digital parts? Would they know everything about us?
This vision is not exclusively a technology ethics question anymore. With advances in the internet of things, machine learning, artificial intelligence, and society’s growing reliance on smart devices, the age of digital replicas has arrived.
“Tomorrow’s monopolies won’t be...measured just by how much they sell us. They’ll be based on how much they know about us and how much better they can predict our behavior than competitors.” - Bala Iyer.
Before the internet.
The best salespeople and businesses strive to understand the psyche of their buyers. Deep consumer insights were segmented by specific facets of an individual’s life: banks knew your financial habits, retailers knew your buying habits, and so on.
Few businesses could afford to pull together and access these data.
It was just not feasible to combine all consumer interactions to make one comprehensive behavioral profile.
Not to mention, data collection tools such as focus group discussions, surveys, key informant interviews, which aimed to better understand specific consumer intent and behavior, are riddled with their own flaws.
These methods can be limited in scope, expensive, and the responses are not always accurate.
Businesses knew this and wanted to know what people were actually doing. But how do you understand true intent of someone without invading their privacy?
Enter the internet.
Marketers could reach more people and get more data points, leading to the rise of big data as the marketing currency. At this point, insights were still siloed by industry, but the information was in depth and in bulk.
However, big data went against product personalization. How can we have a unique product experience if our recommendations of what to buy are based on what millions of other people have already bought?
It's not unique because the cross selling suggestions made by e-commerce businesses such as Amazon are based on what others in your demographic have bought, not necessarily what you need.
Enter the smartphone and internet of things.
With amazing user experience as the enchanting allure, we sold our data privacy at the price of every Siri, Alexa, Fitbit, smart home, smart car we have bought into. Now, things that could not be measured accurately before (how much do you really exercise?) could be measured.
For better or worse.
We have willingly let these devices into our private lives and, as a result, they have all become data collection tools of our behaviors.
What is a Digital Replica?
According to Bala Iyer, “A digital replica is a digital representation of an individual, object, or asset. Such a representation is constructed based on an individual, object, or asset’s interactions with its environment.”
This isn’t new. GE creates digital replicas of all its jet engines, locomotives, and turbine assets. With the help of internal sensors, they can offer predictive maintenance to service the assets before critical parts fail. The more elaborate and accurate the sensors, the more precise its digital replica becomes.
Individuals are, however, far more complex than physical products. Fortunately, tech giants still only have bits and pieces of our digital footprints—not enough to create a full digital replica.
My digital footprint at the moment is still fragmented, but the data quality is higher: Fitbit knows my sleeping and exercise data, Google knows my deepest secrets, Facebook knows my social persona and network, and Amazon knows my buying habits—and soon enough my eating habits (why else would it buy Whole Foods?).
Merge all of this information together, fill the gaps with machine learning and AI, and you have my digital replica.
Where is this headed?
The pursuit of ultimate product personalization will define the digital market. Whoever owns the largest set of accurate digital replicas will monopolize the market.
However, there are significant challenges, especially identity management. If I use multiple devices and email accounts, then my personality is distorted into multiple digital replicas.
Try this. Search“offline data management for NGOs” on Google on your personal computer and then on a friend’s computer. I bet you’ll get different results because Google thinks you’re two different people (leave a comment on what you get).
The emergence and adoption of blockchain has the potential to solve this headache as more companies, and even governments, opt in to its shared network.
However, this requires companies to share information, including the tech giants, who might rightfully think they have enough data to create their own identity management system.
This sets the stage for the next age of digital competition. We’ll see the tech giants expand into markets that give them more behavioral raw data to increase the accuracy of our replicas.
My prediction is that we will soon see Dr. Google: merging Google Fit with unique identity management. Considering Google already knows when we are about to become ill, we will soon have a personal digital doctor. It will recommend courses of action and teach us how to self-operate with the Google Surgeon Robot.
Don’t be surprised if the tech giants expand into markets that initially don’t make sense. It’s all in the pursuit of knowing more about us.
Lack of data privacy for starters. We have become so immune to data privacy invasion that it has become a fact of life. Imagine if we found out that the NSAs and CIAs of the world were creating digital replicas. We would be bloody scared.
Collective calls for privacy are sidelined by our greater desire for convenient user experience, leading to us doing things that seem at odds with the technical ethics we preach.
So, are we entitled to our swivel chair outrage, or is it possible that more and more of us are enlisting and enabling tech companies with the power that we do not want governments to have?
Additionally, with tech companies accumulating more information about us than ever before, it will also become harder for regulators to identify digital monopolies.
Google’s antitrust fine by the EC is a good start, but regulators will have to adapt by looking at digital markets as integrated ecosystems and not as a traditional one layer markets.
The stance that regulators take on the definition of consumer welfare will greatly affect the future of digital markets. I mean, who can argue that cheap and user-friendly products are against consumer welfare?
User experience and convenience are tech companies' bait to get what they really want: our data to increase personalization of cross-selling and upselling their products.
As we enter the personalization spiral, soon we will not be making our own choices. Iyala makes this point: “Individuals getting lured into providing monopoly access to their digital replicas because of the convenience of personalized services may never realize that their choices are being made not by them but by their providers.”
With the rise in product choices, will we see the demise of our choice?
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