In California, we pride ourselves on leadership and innovation – individually, in the market and in government. For example, our citizens choose to lead the nation in environmental stewardship and consumer protection, and our state government reinforces and supports those choices.
I am concerned, however, that in two very important leadership areas – digital innovation and consumer privacy – we might needlessly be on the precipice of significant conflict because our leaders are considering overbroad privacy laws that could harm my digital startup and others like it that propel California’s economy.
I am a mom of four kids who deeply values my family’s privacy. I am also a 15-year veteran of a family-owned mobile app publisher with 35 employees and a global audience, and I am starting a company that builds apps for kids. My companies take privacy seriously.
The problem stems from the California Legislature’s attempts to transform seemingly wise but perhaps outdated 40-year-old privacy principles into new laws to govern innovative digital companies’ data practices. The Fair Information Practices Principles, or FIPPs, are intended to guide “data collectors” and ensure that our personal information is unlikely to be misused or abused. The FIPPs are the foundation of privacy laws globally, and of U.S. laws pertaining to health care, genetic, financial and online privacy.
Several FIPPs principles are as important today as they were 40 years ago. For example, consumers should know who is collecting our information. We should have confidence that our data is stored securely, that identities are cloaked when data is aggregated and shared, and that companies are accountable for data breaches.
But several traditional privacy principles are outdated, or perhaps do not recognize the value of data science and how innovation works. For example, it is critically important that my company tracks our consumers’ in-app behavior so I understand if the app is working as intended, what features draw users to stay with our product longer or to leave it abruptly. We compete with Electronic Arts, Disney and Kabam for users and mind share, but we will never match their marketing budgets, so we need another advantage. Data is our lifeblood and can be that advantage.
Similarly, innovation is the product of data scientists and analysts digging into large data sets to look for trends, connections, aberrations and opportunities..
Innovation might appear serendipitous to outsiders, but solving big problems and creating products is more often a result of hard work, hard science, brilliant identification of opportunity and deep engagement with data. Unfortunately, new privacy laws being considered in Sacramento would restrict too tightly what my company can do with data, because lawmakers do not recognize the value to innovators of accessing large and historical data sets and continuously analyzing consumer data. As a small competitor in a very large market, I can be nimble and respond to the data indicators quickly, which might be my only edge.
In particular, the privacy concepts of “specific use” and “data minimization” sound compelling and appealing to legislators. These concepts encourage companies to collect only data necessary to perform a specific function, to use the data only for that function and to delete data when that function is complete. But to learn whether our users enjoy different experiences in different countries, at different ages, or with different types of services or functions, we must merge data sets and might need to keep data for long periods of time so we can learn more, compare more, understand better and improve our products.
In this instance, leadership might require moving slowly and carefully, and revisiting old principles in order to build a new privacy-innovation paradigm.
Kellie Hartwell is founder and chief executive of Bird Run Media, a prelaunch app publisher startup headquartered in Santa Monica.
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