applis mobiles, mobile apps

Do mobile apps for kids respect privacy rights?

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The number of mobile applications for children is rapidly increasing. An entire market segment is taking shape to reach this target audience. Just like adults, the personal data issue applies to these younger audiences. Grazia Cecere, a researcher in the economics of privacy at Institut Mines-Télécom Business School, has studied the risk of infringing on children’s privacy rights. In this interview, she shares the findings from her research.

 

Why specifically study mobile applications for children?

Grazia Cecere: A report from the NGO Common Sense reveals that 98% of children under the age of 8 in the United States use a mobile device. They spend an average of 48 minutes per day on the device. That is huge, and digital stakeholders have understood this. They have developed a market specifically for kids. As a continuation of my research on the economics of privacy, I asked myself how the concept of personal data protection applied to this market. Several years ago, along with international researchers, I launched a project dedicated to these issues. The project was also launched thanks to funding from Vincent Lefrere’s thesis within the framework of the Futur & Ruptures program.

Do platforms consider children’s personal data differently than that of adults?

GC: First of all, children have a special status within the GDPR in Europe (General Data Protection Regulation). In the United States, specific legislation exists: COPPA (Children’s Online Privacy Protection Act). The FTC (Federal Trade Commission) handles all privacy issues related to users of digital services and pays close attention to children’s rights. As far as the platforms are concerned, Google Play and App Store both have Family and Children categories for children’s applications. Both Google and Apple have expressed their intention to separate these applications from those designed for adults or teens and ensure better privacy protection for the apps in these categories. In order for an app to be included in one of these categories, the developer must certify that it adheres to certain rules.

Is this really the case? Do apps in children’s categories respect privacy rights more than other applications?

GC: We conducted research to answer that question. We collected data from Google Play on over 10,000 mobile applications for children, both within and outside the category. Some apps choose not to certify and instead use keywords to target children. We check if the app collects telephone numbers, location, usage data, and whether they access other information on the telephone. We then compare the different apps. Our results showed that, on average, the applications in the children’s category collect fewer personal data and respect users’ privacy more than those targeting the same audience outside the category. We can therefore conclude that, on average, the platforms’ categories specifically dedicated to children reduce the collection of data. On the other hand, our study also showed that a substantial portion of the apps in these categories collect sensitive data.

Do all developers play by the rules when it comes to protecting children’s personal data?

GC: App markets ask developers to provide their location. Based on this geographical data, we searched to see whether an application’s country of origin influenced its degree of respect for users’ privacy. We demonstrated that if the developer is located in a country with strong personal data regulations—such as the EU, the United States and Canada—it generally respects user privacy more than a developer based in a country with weak regulation. In addition, developers who choose not to provide their location are generally those who collect more sensitive data.

Are these results surprising?

GC: In a sense, yes, because we expected the app market to play a role in respecting personal data. These results raise the question of the extra-territorial scope of the GDPR, for example. In theory, whether an application is developed in France or in India, if it is marked in Europe, it must respect the GDPR. However, our results show that among countries with a weak regulation, the weight of the legislation in the destination market is not enough to change the developers’ local practices. I must emphasize that offering an app to all countries is extremely easy—it is even encouraged by the platforms, which makes it even more important to pay special attention to this issue.

What does this mean for children’s privacy rights?

GC: The developers are the owners of the data. Once personal data is collected by the app, it is sent to the developer’s servers, generally in the country where they are located. The fact that foreign developers pay less attention to protecting users’ privacy means that the processing of this data is probably also less respectful of this principle.

 

Facebook

Fine against Facebook: How the American FTC transformed itself into “super CNIL”

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Article written in partnership with The Conversation
Winston Maxwell, Télécom Paris – Institut Mines-Télécom

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[dropcap]T[/dropcap]he US consumer protection regulator has issued a record $5 billion fine to Facebook for personal data violations. This fine is by far the largest ever issued for a personal data violation. Despite some members of the US Congress saying that this is not enough, the sanction has allowed the FTC to become the most powerful personal data protection regulator in the world. And yet, the USA does not have a general data protection law.

To transform itself into a “super CNIL”, the American FTC relied on a 1914 text on consumer protection that forbids any unfair or deceptive practices in business. France has a similar law in its Consumer Code. In the USA, there is no equivalent to CNIL on a federal level. Therefore, the FTC have taken this role.

It was not easy for the FTC to transform a general text on consumer protection into a law on personal data protection. The organization faced two obstacles. Firstly, they had to create a legal doctrine that was clear enough for businesses to understand what constitutes an unfair and deceptive practice in terms of personal data. Then, they had to find a way to impose financial sanctions, since the 1914 FTC act did not include any.

Proceedings against Facebook

A Facebook office. Earthworm/Flickr, CC BY-NC-SA

To clearly define a deceptive personal data practice, the FTC created a legal doctrine that punishes any business that “fails to keep their promises” in terms of personal data. The FTC had started a first lawsuit against Facebook in 2011 accusing them of deceptive practices due to the discrepancy between what Facebook told consumers and how the company acted. To spot a deceptive practice, the FTC will examine each sentence of a company’s privacy policy to identify a promise, even an implied promise, that is not being kept.

An unfair practice is more difficult to prove, which explains why the FTC prefer to use the term ‘deceptive’ rather than unfair. The FTC considers an unfair practice to be any practice that would be both surprising and not easily avoidable for the average consumer.

The FTC Act does not allow the FTC to directly impose a financial penalty. To do this, they have to ask the US Department of Justice to file a lawsuit. To work around this issue, the FTC encourages settlement agreements. The FTC Act allows the regulator to directly impose sanctions in the event of a breach of these agreements. The most important thing for the FTC is to get an agreement signed at the time of the company’s first violation. This means that in the case of a second violation, the FTC is in a position of strength. The Facebook incident follows this pattern. Facebook signed a settlement agreement with the FTC in 2012. The FTC have now found that Facebook violated this agreement by sharing personal data with Cambridge Analytica. The violation of the agreement made in 2012 allows the FTC to hit back strongly and negotiate a new agreement that will last 20 years, this time with a $5 billion fine.

Settlement agreements

If settlement agreements allow the FTC to increase its powers, why do companies sign them? Companies put themselves in a weaker position by signing settlement agreements and the contract prepares the FTC to make these companies more vulnerable in the case of a second violation.  However, most companies prefer to negotiate an agreement with the FTC instead of going to trial. As well as the large cost of a lawsuit and the negative effect it has on a company’s image, if a company loses a lawsuit to the US government, the door is then opened for other parties to sue them, in particular with consumer class action lawsuits. Companies fear the snowball effect. In addition, a settlement agreement with the FTC does not set a precedent since the company does not admit that they are guilty in the agreement. This means that the company can claim their innocence in other lawsuits.

As well as increasing the FTC’s sanctioning powers, the settlement agreements allow them to establish detailed requirements for personal data protection. A settlement agreement with the FTC can become a mini-GDPR and binds the company for 20 years, which is the usual duration for these agreements.

The new agreement states that Facebook must gain the explicit consent of the user before they use their facial recognition data for any purpose, or before they share their mobile phone number with a third party. The 2012 agreement already required Facebook to carry out impact assessments and this obligation was reinforced in the 2019 agreement. The new agreement requires Facebook to put in place a committee of independent administrators who will manage the implementation of the agreement within the company. As well as this, Facebook’s status will have to be changed to ensure that Mark Zuckerberg is not the sole person who can dismiss those in charge of managing the obligations. The new agreement requires Mark Zuckerberg to sign a personal declaration stating that the company will comply with the commitments made in the agreement. A false declaration would put Mr Zuckerberg at risk of criminal penalties, including imprisonment. Most importantly, the agreements oblige Facebook to document all its risk reduction measures and carry out an audit every two years using an independent auditor.

The 2012 act already included a biannual audit. Following the Cambridge Analytica investigation, the EPIC association was provided a copy of an audit carried out for the 2015-2017 period. The audit did not identify any abnormalities relating to data sharing with Cambridge Analytica and other Facebook business partners. This caused the FTC to question the effectiveness of audits, leading them to strengthen the audit regulations in the new 2019 agreement.

Although the 2012 settlement agreement did not prevent Facebook from crossing the line in the Cambridge Analytica scandal, it did allow the FTC to strongly intervene and sanction this second violation. As well as the $5 billion fine, the new 2019 agreement contains several accountability measures. These measures ensure that the commitments agreed by Facebook are applied at every level of the company and that any violation will be detected quickly. Facebook’s management will not be able to say that they were not made aware and Facebook will have to adhere to these governance commitments for the next 20 years.

In the USA, it is common for companies to negotiate agreements with the government. This process is sometimes criticized as a form of forced negotiation. The $8.9 billion fine against BNP Paribas was a “negotiated” agreement, although whether the negotiation between the French bank and the US government was balanced is questionable. In Europe, there are no settlement agreements for personal data violations, but they are common in competition law.

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Winston Maxwell, Télécom Paris – Institut Mines-Télécom

The original version of this article (in French) was published in The Conversation. Read the original article

data brokers

Data brokers: the middlemen running the markets

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Over the past 5 years, major digital technology stakeholders have boosted the data broker business. These middlemen collect and combine masses of traces that consumers leave online. They then offer them to the companies of their choice in exchange for income. Above all, they use this capital to manipulate markets around the world. These new powerful stakeholders are greatly misunderstood. Patrick Waelbroeck, an economist at Télécom Paris, studies this phenomenon in the context of the Chair he cofounded dedicated to Values and Policies of Personal Information.

 

Data brokers have existed since the 1970s and the dawn of direct marketing. These data middlemen collect, sort and prepare data from consumers for companies in need of market analysis. But since the advent of the Web, data brokers like Acxiom, Epsilon and Quantum have professionalized this activity. Unlike their predecessors, they are the ones who choose the partners to whom they will sell the information. They employ tens of thousands of individuals, with turnover sometimes exceeding 1 billion dollars.

As early as 2015, in an article entitled The Black Box Society, Franck Pasquale, a law professor at the University of Maryland, identified over 4,000 data brokers in a 156-billion-dollar market. In 2014, according to the American Federal Trade Commission (FTC), one of these companies held information on 1.4 billion transactions carried out by American consumers, and over 700 billion aggregate items!

Yet these staggering figures are already dated, since technology giants have joined the data broker game over the past five years. Still, “economists are taking no notice of the issue and do not understand it,” says Patrick Waelbroeck, professor of industrial economics and econometrics at Télécom Paris. In the context of the IMT Chair Values and Policies of Personal Information, he specifically studies the effect of data brokers on fair competition and the overall economy.

Opaque activities

“There are supply and demand dynamics, companies that buy, collect, modulate and build databases and sell them in the form of targeted market segments based on the customer’s needs,” the researcher adds. Technology giants have long understood that personal data is of little value on its own. A data broker’s activities entail not only finding and collecting data on or offline. More importantly, they must combine it to describe increasingly targeted market segments.

5 years ago, the FTC already estimated that some data brokers held over 3,000 categories of information on each American, from first and last names, addresses, occupations and family situations to intentions to purchase a car and wedding plans. But unlike “native” data brokers, technology giants do not sell this high value-added information directly. They exchange it for services and compensation. We know nothing about these transactions and activities, and it is impossible to measure their significance.

A market manipulation tool

“One of the key messages from our research has been that these data brokers, and digital technology giants in especially, do not only collect data to sell or exchange,” says Patrick Waelbroeck. “They use it to alter market competition.” They are able to finely identify market potential for a company or a product anywhere in the world, giving them extraordinary leverage.

“Imagine, for example, a small stakeholder who has the monopoly on a market in China,” says the economist. “A data broker who has data analysis indicating an interest in this company’s market segment for a Microsoft or Oracle product, for example, has the power to disrupt this competitive arena. For a variety of reasons—the interest of a customer, disruption of a competitor, etc.—they can sell the information to one of the major software companies to support them or, on the other hand, decide to support a Chinese company instead. ”

As a practical example of this power, in 2018, British Parliament revealed internal emails from Facebook. The conversations suggest that the Californian company may have favored third-party applications such as Netflix by sharing certain market data, while limiting access to smaller applications like Vine. “In economics, this is called a spillover effect on other markets,” Patrick Waelbroeck explains. “By selling more or less data to certain market competitors, data brokers can make the market more or less competitive and choose to favor or disadvantage a given stakeholder. ”

In a traditional market, the interaction between supply and demand introduces a natural form of self-regulation. In choosing one brand rather than another, the consumer exercises countervailing power. Internet users could do the same. But digital market mechanics are so difficult to understand that there are no users doing this. Although users regularly leave Facebook to prevent it from invading their privacy, it is unlikely they will do the same to prevent the social network from distorting competition by selling their data.

Data neutrality?

“One of our Chair’s key messages is the observation of a total ignorance of the influence of data brokers,” Patrick Waelbroeck continues. “No one is pondering this issue of data brokers manipulating market competition. Not even regulators. Yet existing mechanisms could be used as a source of inspiration in countering this phenomenon.” The concept of net neutrality, for example, which in theory enables everyone to have the same access to all online services, could inspire data neutrality. It would prevent certain data brokers or digital stakeholders from deciding to favor certain companies over others by providing them with their data analysis.

Read more on IMTech What is Net Neutrality?

Another source of inspiration for regulation is the natural resource market. Some resources are considered as common goods. If only a limited number of people have access to a natural resource, competition is distorted, and the rejection of a commercial transaction can be sanctioned. Finally, an equivalent measure for intellectual property rights could be applied to data. Certain patents, which are necessary in complying with a standard, are regarded as raw materials and are therefore protected. The companies holding these “essential patents” are required by regulation to grant a license to all who want to use them at a reasonable and non-discriminatory rate.

The value of the data involved in digital mergers and acquisitions

In the meantime, pending regulation, the lack of knowledge about data brokers among competition authorities is leading to dangerous collateral damage. Unaware of the true value of certain mergers and acquisitions, like those between Google and DoubleClick, WhatsApp and Facebook, or Microsoft and LinkedIn, competition authorities use a traditional market analysis approach.

They see the two companies as belonging to different markets–for example WhatsApp as an instant messaging service and Facebook a social network–and in general conclude that they would not gain any market power in joining forces than they had individually. “That is entirely false!”, Patrick Waelbroeck protests. “They are absolutely in the same sector, that of data brokerage. After the union of these duos, they all merged their user databases and increased the number of their users. ”

 “We must view the digital world through a new lens,” the researcher concludes. “All of us–economists, regulators, politicians and citizens–must understand this new data economy and its significant influence on markets and competition. In fact, in the long-term, all companies, even the most traditional ones, will be data brokers. Those unable to follow suit may well disappear. ”

Article by Emmanuelle Bouyeux for I’MTech

 

servitization

Servitization of products: towards a value-creating economy

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Businesses are increasingly turning towards selling the use of their products. This shift in business models affects SMEs and major corporations alike. In practice, this has an impact on all aspects of a company’s organization, from its design chain to developing collaborations, to rolling out new offerings for customers. Xavier Boucher and his colleagues, researchers in industrial systems design and optimization at Mines Saint-Étienne, help companies navigate this transformation.  

 

Selling uses instead of products. This shift in the business world towards a service economy has been emerging since the early 2010s. It is based on new offerings in which the product is integrated within a service, with the aim of increasing value creation. Leading manufacturers, such as Michelin, are at the forefront of this movement. With its Michelin Fleet Solutions, the company has transitioned from selling tires to selling kilometers to European commercial trucking fleets. But the trend also increasingly affects SMEs, especially as it is recognized as having many benefits including new opportunities to create value and drive growth, positive environmental impacts, building customer loyalty, increasing employee motivation and involvement.

However, such a transition is not easy to implement and requires a long-term strategy. What innovation strategies are necessary? What services should be rolled out and how? What company structures and expertise must be put in place? It all depends on market developments, the economic impacts of such a transformation on a company and the means to implement it, whether alone or with partners, to achieve a sustainable transformation. More generally, shifting a company’s focus to a product-service system means changing its business model. With his team, Xavier Boucher, a researcher at Mines Saint-Étienne, supports companies in this shift.

In the Rhône-Alpes region where he carries out his research, the majority of manufacturers are developing a service dimension to varying degrees through logistics or maintenance activities. “But out of the 150,000 companies in the region, only a few hundred have truly shifted their focus to selling services and to product life-cycle management,” explains the researcher. Nevertheless, his team is facing increasing demand from manufacturers.

Tailored support for companies

The transition from a model of selling products to a product-service system involves a number of issues of company organization, reconfiguration of the production chain and customer relationship management, which the researchers analyze using models. After a diagnostic phase, the goal is often to support a company with its transformation plan. The first step is changing how a product is designed. “When we design a product, we have to consider all the transformations that will make it possible to develop services throughout its use and throughout all the other phases of its life cycle,” explains Xavier Boucher. As such, it is often useful to equip a product with sensors so that its performance and life cycle can be traced when in customers’ possession. But production management is also impacted: this business strategy is part of a broader context of agility. The goal? Create value that is continually evolving through flexible and reconfigurable industrial processes in alignment with this purpose.

To this end, Xavier Boucher’s team develops different tools ranging from strategic analysis to decision support tools to bring a solution to market. “For example, we’ve created a business model that can be used while developing a new service offering to determine the right value creation chain to put in place and the best way for the company to sell the service,” says the researcher. Using a generic simulation platform and a customization approach, the researchers tailor these economic  calculators to manufacturers’ specific circumstances.

This is important since each situation is unique and requires a tailored business model. Indeed, marketing a mobile phone and deploying a cleaning robot will not rely on the same channels of action. The latter will call for services including customized installation for customers, maintenance and upgradability as well as management of consumables and measuring and guaranteeing cleaning quality. Moreover, companies vary in terms of their progress toward servitization. The researchers may collaborate with a start-up that has adopted a product-service model from the outset or with companies with established business models looking for a tailored, long-term transformation.

What are the steps toward a product-service system?

Companies may call upon the expertise of the Mines Saint-Étienne researchers at various stages in their progress toward this transition. For example, a manufacturer may be considering in advance how selling a service would impact its economic balance. Would such a change be the right move based on its situation? In this case, the models establish a progressive trajectory for its transformation and break it down into steps.

Another type of collaboration may be developed with a company who is ready to move towards selling services and is debating how to carry out its initial offering. Researchers use their simulation tools to determine three possible business models: the first is to market its product and add on the sale of services throughout its lifecycle; the second is to shift the company’s business to selling services and integrate the product within a service; and finally, the third model sells performance to customers.

The researchers helped the SME Innovtec develop an autonomous robot offering for industrial cleaning. “We developed computer-aided design tools: modeling, organizational scenarios, simulations. The goal was to expand the traditional product-oriented tools by adding a service package dimension,” explains Xavier Boucher. The company thus benefitted from different scenarios: identifying technologies to ensure its robots’ performance, determining which services were appropriate for this new product etc. But the projections also address topics beyond the production chain, such as whether it should integrate the new services within the current company or create a new legal structure to deploy them.

A final possibility is a company that has already made the transition to servitization but is seeking to go further, as is the case for Clextral, a SME that produces extrusion machines used by the food processing industry, which was supported through the European DiGiFoF project (Digital Skills for Factories of the Future). Its machines have a long service life and provide an opportunity to create value through maintenance and upgrading operations. The researchers have therefore identified a service development focus based on a retrofitting service, a sort of technical upgrade. This consists of exchanging obsolete parts while maintaining a machine’s configuration, or modifying the configuration of a piece of equipment to allow for a different industrial use than originally intended.

Digitization and risk management in multi-stakeholder context

The current trend towards servitization has been made possible by the digitization of companies. The Internet of Things has enabled companies to monitor their machines’ performance. In several years’ time, it may even be possible to fully automate the monitoring process, from ordering spare parts to scheduling on-site intervention. Smart product-service systems to combine digitization and servitization is a research focus and is a central part of the work carried out with elm.leblanc, a company seeking to put in place a real-time information processing to respond to customers more quickly.

However, this change in business models affects not only a company, but its entire ecosystem.  For example, elm.leblanc is considering sharing costs and risks between various stakeholders. One option, for example, would be to incorporate partner companies to implement this service. But how would the economic value or brand image be distributed between the partners without them taking over the company’s market? Research on managing risk and uncertainty is of key importance for Xavier Boucher’s team. “One of the challenges of our work is the number of potential failures for companies, due to the difficulties of effectively managing the transition. Although servitization has clearly been shown to be a path to the future, it is not associated with immediate, consistent economic success. It’s essential to anticipate challenges.”

Article written (in French) by Anaïs Culot for I’MTech

In France, AMAPs (associations for community-supported agriculture) are emblematic examples of the social solidarity economy. But they are not the only social solidarity economy (SSE) organizations. Other examples include cooperative banks, non-profit groups and mutual funds.

What is the social and solidarity economy?

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The social and solidarity economy (SSE) encompasses organizations that seek to respond to human problems through responsible solutions. Far from being an epiphenomenon, the SSE accounts for a significant share of the economy both in France and around the world. Contrary to popular belief, these principles are far from new. Mélissa Boudes, a researcher in management at Institut Mines-Télécom Business School, helps us understand the foundations of this economy.

 

What makes the social and solidarity economy unique?

Mélissa Boudes: The social and solidarity economy (SSE) is based on an organization structure that is both different and complementary to public economy and capitalist economy. This structure is dedicated to serving human needs. For example, organizations that are part of the SSE are either non-profit or low-profit limited companies. In this second case, profits are largely reinvested in projects rather than being paid to shareholders in the form of dividends. In general, SSE organizations have a democratic governance model, in which decisions are made collectively based on the “one person one vote” principle and involve those who benefit from their services.

What types of organizations are included in this economy?

MB: A wide range! Non-profit groups typically fall within this framework. Although sports and community non-profit groups do not necessarily claim to be part of the SSE, they fall within the framework based on their official statutes. Cooperatives, mutual funds and social businesses of varying sizes are also part of the SSE. One example is the cooperative group Up—formerly called Chèque déjeuner—which now has an international dimension. Other organizations include mutual health insurance groups, wine cooperatives, and cooperative banks.

How long has this economy existed?

MB: We often say that it has existed since the 19th century. The social and solidarity economy developed in response to the industrial revolution. At this time, workers entered a subordinate relationship that was difficult to accept. They wanted a way out. Alternative organizations were created with a primary focus on workers’ concerns. The first organizations of this kind were mutual aid companies that provided access to medical care and consumer cooperatives that helped provide access to good quality food. At the time, people often went into debt buying food. Citizens therefore created collective structures to help each other and facilitate access to good quality, affordable food.

So why have we only heard about the social and solidarity economy in recent years?

MB: It’s true that we seem to be witnessing the re-emergence of SSE, which was the subject of a law in 2014. SSE is now back in the forefront because the issues that led to its creation in the 19th century are reappearing—access to food that is free of pollution, access to medical care for “uberized” workers.  AMAPs (associations for community-supported agriculture) and cooperative platforms such as Label Emmaüs are examples of how the SSE can respond to these new expectations. Although new media coverage would suggest that these organization models are new, they actually rely on practices that have existed for centuries. However, the historical structures behind the SSE are less visible now because they have become institutionalized. For example, we sometimes receive invitations to participate in the general meeting for our banks or mutual funds. We don’t pay much attention to this, but it shows that even without knowing it, we are all part of the SSE.

Is the social and solidarity economy a small-scale phenomenon, or does it play a major role in the economy?

MB: The SSE exists everywhere in France, but also around the world. We must understand that SSE organizations aim to provide solutions to universal human problems: better access to education, mobility, healthcare… In France, the SSE represents 10% of employment.  This share rises to 14% if we exclude the public economy and only look at private employment. Many start-ups have been created based on the SSE model. This is therefore an important economic phenomenon.

Can any type of organization claim to be part of the social and solidarity economy?

MB: No, they must define an official status that is compatible with the SSE at the time the organization is founded, or request authorization if the company has a commercial status. They must request specific approval as a solidarity-based company of social benefit, which is attributed by the regional French employment authority (DIRECCTE).  Approval is granted if the company demonstrates that it respects certain principles, including providing a social benefit, a policy in its statutes limiting remuneration, an absence from financial markets, etc.

How does the social and solidarity economy relate to the concept of corporate social responsibility (CSR)?

MB: In practice, CSR and SSE concepts sometimes overlap when commercial companies partner with SSE companies to develop their CSR. However, these two concepts are independent. The CSR concept does, however, reveal an economic movement that places increasing importance on organizations’ social aims. More and more commercial companies are opting for a hybrid structure: without becoming SSE companies, they impose limited salary scales to avoid extremely high wages. We are in the process of moving towards an environment in which the dichotomies are more blurred. We can no longer think in terms of virtuous SSE organizations on one side and the profit-driven capitalist economy on the other. The boundaries are not nearly as clear-cut as they used to be.

Read on I’MTech Social and solidarity economy in light of corporate reform

good in tech

Good in Tech: a chair to put responsibility and ethics into innovation

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On September 12, the Good in Tech chair was launched with the aim of making digital innovations more responsible and ethical. The chair is supported by the Institut Mines-Télécom Business School, the School of Management and Innovation at Sciences Po, and the Fondation du Risque, in partnership with Télécom Paris and Télécom SudParis. This means that the Good in Tech chair combines human and social sciences, computer sciences and engineering. It aims to shed light on corporate governance decisions regarding digital innovation, and help businesses embrace new values for innovation. Christine Balagué, a researcher at Institut Mines-Télécom Business School and co-holder of the Good in Tech chair, tells us the importance of this initiative, as well as the research challenges and problems that companies face.

 

Why did you want to create a research chair on the ethics and responsibility of digital technologies?

Christine Balagué: The chair brings together complementary research skills. We are also establishing a multidisciplinary approach, by including both hard sciences and human and social sciences. Unlike existing research initiatives, which include a lot of hard sciences and little in the way of human sciences, the Good in Tech chair has the advantage of having a strong human science perspective. This means that the chair can address issues surrounding corporate responsibility, user behavior towards responsible technologies, modes of governance or possible futures.

Responsible digital innovation is one of our areas of study.  What are you currently working on in this area of study?

CB: Today, most companies have a corporate social responsibility or CSR policy. In most of these cases, CSR does not include many indicators on digital innovation, which is ironic since artificial intelligence, connected objects or big data are being developed in all sectors. Our work on this issue will therefore focus on developing CSR indicators for responsible digital innovation and proposing a measurement method for them.

Read on I’MTech: Innovation: to be or not to be responsible?

You’ve talked about measuring responsible innovation afterward, but can research also help to reflect on the responsibility of technologies beforehand, from the design stage?

CB: Of course, and this is the aim of a second area of study for the chair regarding responsible technologies “by-design”. We know that digital technologies, especially modern artificial intelligence, raise ethical issues: the algorithms are often non-transparent, difficult to explain, potentially discriminatory, and biased. For example, we know that in the USA, social media treats users differently depending on their political views or the color of their skin. Another example would be facial recognition technologies and recruiting algorithms, which are not transparent. Companies that develop artificial intelligence or data handling tools don’t always consider these issues. They end up with products that they market or use that have a major impact on consumers. We are therefore doing research into how we can make technology more transparent, explicable and less discriminatory from the beginning of the design process.

It’s also important for a research chair to involve companies in the discussion. Who are your industrial partners and what do they bring to your work?

CB: At the moment we’re working with five partners: Afnor, CGI, Danone, FaberNovel and Sycomore. These companies are all interested in digital responsibility issues. They help our work by opening their data, providing us with use cases, etc. They also allow us to understand the economic problems that companies face.

Do you plan on making recommendations to companies or public authorities?

CB: The main aim of the chair is to get articles published in the best scientific journals and to encourage research on the chair’s four areas of study. We are also considering publishing policy papers, which are scientific articles that aim to inform political and industrial choices. As well as these articles, one of the chair’s areas of study is dedicated to planning for the future.  We are going to organize conferences with students from Sciences Po and the IMT schools involved, which will aim to get students thinking about future prospects for responsible digital technologies. Similarly, conferences will be held for the general public in order to start the debate on possible futures. For example, we will propose scenarios such as: “In the future, these will be every-day technologies. How will they impact healthcare or how consumers buy things online?” The idea is to imagine the future in partnership with users of technology whilst involving people from all walks of life.

By helping people to make an informed decision, do you want to help define a framework for digital innovation governance?

CB: We are studying every possible mode of governance – which is the fourth and final area of study of the chair. This is so we can understand which level is most appropriate, whether it’s at company, national or European level.  In particular, we would like to study the importance of governance that is directly integrated into the company. For example, we want to see whether developing responsible technologies “by-design” would be more effective than international regulation. The aim is to integrate mechanisms of governance directly into responsible companies’ behavior, knowing that responsible digital innovation means that consumers would be more likely to buy from that company.

Are certain businesses reluctant to comply with this emerging trend for “tech-for-good”? And does this mean they are reluctant to comply with the notions of responsibility and ethics?

CB: The chair is working to defend a European vision of digital innovation. China is less interested in these issues, and major American institutions are working on these problems. However, the GDPR has shown that Europe can make regulations change; our regulations surrounding personal data have made an impact on people working in Silicon Valley. Businesses who are reluctant to comply with these regulations must understand that the more responsible technology is, the more they are accepted by consumers. For example, the market for health-related connected objects is developing slower than expected in Europe, due to consumers reluctance to use collected data. However, to ensure that it is accepted by companies, we have to make sure responsibility does not slow down innovation. Coupling companies’ digital innovation with consumers’ needs will undoubtedly be one of the biggest challenges of the chair.

competition, access to data

The new competition issues raised by access to data in the digital economy

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Patrick Waelbroeck, Télécom Paris – Institut Mines-Télécom and Antoine Dubus, Télécom Paris – Institut Mines-Télécom

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[dropcap]I[/dropcap]n the digital economy, data is king. While recent problems with data theft and loss have made headlines following the introduction of the General Data Protection Regulation (GDPR) in May 2018 , the link between access to data and market competition is still in the observation phase. We will consider some recent cases.

In 2014, the European Commission investigated the consequences of Facebook’s purchase of WhatsApp. By merging, the two companies could combine their databases and therefore increase the amount of information they have about their users. In 2017, when it was found that Facebook had deliberately lied about the possibility of associating WhatsApp users’ phone numbers with their Facebook profiles, the Commission imposed a €110 million fine. This mishandling of personal data led one of WhatsApp’s co-founders to resign. However, the American giant was charged only for lying to investigators, and not for combining the two companies’ databases.

Business assets for digital giants

In the US, when Google and DoubleClick merged in 2007, the Federal Trade Commission, an independent government agency, examined the possibility that the companies could combine their databases, without focusing on the impact of the data on competition.

These initial analyses therefore suggest that access to data can be considered to have a minimal impact on competition. The European Commission nevertheless wished to carry out a more detailed analysis, publishing a report on competition in the digital era. The report shows that data represents a barrier to entry for new companies. The authors therefore recommend that major digital players open up their databases, the argument being that by giving all companies access to data, its value is not concentrated in the hands of a few players who use it to dominate the market. This proposal seems rather unrealistic since data represents a business asset for digital companies.

In any event, this second analysis considers data as an external constraint imposed on digital companies. But it is becoming increasingly clear that access to data can stem from strategic decisions for at least two reasons.

First, access to data is often monopolized by platforms that act as an intermediary between different groups of users in what is referred to as a multi-sided market. The player that controls the platform also controls who has access to its data. It can therefore distort market competition by excluding certain companies.

Data provides market power

Certain Facebook practices were disclosed during a hearing before the British parliament and reported by the New York Times in late 2018. Facebook allegedly favored data exchange with partner apps such as Airbnb, Lyft and Netflix and allegedly cut off access to its data for apps seen as competitors such as Twitter’s Vine application.

The more data, the more market power.

 

Second, a distinctive feature of databases is that they can create synergies when they are merged. Two companies who pool their data, for example in the event of a WhatsApp/Facebook type of merger, can therefore benefit from an exponential increase in information, which, as it becomes increasingly precise, increases the economic value of the consolidated data. Data-driven mergers also change the merged entity’s strategies related to data collection. A firm with access to the highest quality of information will increase its market power, which will in turn give it access to even more information. The link between market power and data collection is therefore strengthened, leading  to the emergence of dominant players.

In conclusion, access to data ensures a basis for healthy competition in digital markets. The accumulation of data leads to the emergence of dominant players who can then influence competition between third parties, by granting or refusing access their data. It is therefore important to verify that data collection is in compliance with applicable regulations (GDPR). It is no longer only a matter of personal data protection; it has become a competition law issue.

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Patrick Waelbroeck, Professor of Economics, Télécom Paris – Institut Mines-Télécom and Antoine Dubus, PhD student, Télécom Paris – Institut Mines-Télécom

The original version of this article (in French) was published in The Conversation. Read the original article.

Digital technology has given rise to new informal learning methods

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Article written in partnership with The Conversation France.
By Myriam Benabid and Emmanuel Baudoin, Institut Mines-Télécom Business School; and Serge Perrot, University Paris Dauphine – PSL

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[dropcap]C[/dropcap]onsulting a YouTube tutorial or an online dictionary, improving English skills using a dedicated application while taking public transportation, etc. To develop their skills, professionals are increasingly turning to these informal digital learning methods. This is illustrated by two studies conducted by the [HRM Digital Lab] at Institut Mines-Télécom Business School, on a representative sample of 1,000 French employees.

According to the study carried out by Kantar TNS in 2016, just over one in two employees had used informal digital learning to develop their professional skills. A second study carried out by  OpinionWay in 2018 showed that this figure now applies to 60% of the workforce.

Fundamental needs

There is nothing new about employees learning independently on a daily basis, whether through observing their colleagues or manager, reading trade publications, talking to their peers, etc. This set of learning behaviors was first studied and formalized starting in the 1950s, building on work by Knowles, who is considered to be the father of andragogy.

Composed of the ancient Greek words andros (ἀνδρὀς), meaning “man” (in the sense of a mature man, and by extension an adult human being, not a gendered term), and agogos (ἀγωγός), meaning  “guide,” this term refers to knowledge acquisition in adulthood.

In the 1960s, Bandura explored the phenomena of imitation, whereby individuals learn by observing or listening to others, considered to be “models” or “occasional teachers.” Then, in 1996, three researchers, Morgan McCall, Robert W. Eichinger and Michael M. Lombardo, from the Center for Creative Leadership (in North Carolina, US) demonstrated, based on a study of 200 executives, that individuals learn in a variety of ways throughout their lives.

In this study, traditional (off-the-job learning) and formal (meaning official/certification training programs) learning situations represent only 10% of learning time, compared to 90% for informal learning time, which is more instantaneous and disorganized.

In an era of increasingly rapid skill obsolescence, informal learning has become crucial for employees and professionals to continue to perform their jobs effectively.  The study conducted by Kelley shows that there has been a steady decrease in workers’ estimates of the portion of knowledge stored in their memory which is necessary for their professional activity: from 75% in 1986, to 20% in 1997, and 10% in 2006.

A lifelong learning culture is slowly starting to rival the traditional training culture.

In an interconnected world, possibilities for informal learning have proliferated. Tools have given rise to a major transformation, from the person in the next office to a community of 4 billion internet users,  from borrowing a book to having access to 30 million articles created in over 280 languages on Wikipedia, to the 2 million registered users on the French MOOC plateform FUN.

New methods

We have analyzed this reality through two case studies with consultants, auditors and independent professionals, and have identified the factors in the use of these practices and highlighted four informal learning methods based on digital technology:

  • Distributing content to a community using tools such as social media. This is the case, for example, for Laura, a 31-year-old speech therapist who creates, distributes and shares content she finds interesting with groups of fellow speech therapists on social media. On a Facebook group “Les Orthos et la Neuro,” a community of more than 11,000 colleagues discuss, share and debate current topics and issues related to their profession.
  • Keeping up with and responding to trends in a profession or industry through regular updates. This is the case for Vincent, a 32-year-old manager at an auditing and consultancy firm, who checks his LinkedIn news feed before going to bed. Such monitoring is opportunistic and this method is used when circumstances allow for it, for example, during time spent waiting and in public transportation.
  • Leveraging all the available digital resources required to achieve an objective. This is the case for Caroline, a 29-year old senior consultant, who has been offered an ambitious mission, which does not align with her current skills. She takes on this challenge, and learns independently using online resources she considers useful. Her intense method is connected to a specific objective, in this case, her new mission. Such a method can also be for personal reasons, such as in order to obtain a promotion or start a new career.
  • Reacting to difficulties that arise while performing a professional activity, and using learning power for the right need at the right time. This is the case for Sarah, a 36-year-old pharmacist who must respond to patients’ questions and requests for advice. To do so, she draws on appropriate contacts and a list of trustworthy reference websites collected in advance to answer questions quickly and effectively.

The four informal digital learning methods identified in this article are in keeping with the discontinuation of the training plan as of 1 January 2019, in favor of a skills development plan aimed at a more personalized approach focused on training objectives that target specific skills. This law provides for flexibility in implementing learning pathways that go beyond the traditional model with a set time and space.

Companies, and all forms of organizations, have the opportunity to become more flexible and cater to the real practices and needs of today’s employees and professionals. This opens the door, for example, to a debate about the (co)-production, structuring, availability, use and sharing of digital resources.

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Myriam Benabid, Directrice de programme, Institut Mines-Télécom Business School ; Emmanuel Baudoin, Professeur associé en RH, Institut Mines-Télécom Business School et Serge Perrot, Professeur de Management, Université Paris Dauphine – PSL

The original version of this article (in French) was published on The Conversation. Read the original article.

alcohol, tobacco, marketing

Alcohol, tobacco, pharmaceuticals: compromises between marketing and ethics

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In socially controversial sectors, marketing professionals who promote potentially harmful products are faced with a conflict of values. This is the case for the tobacco, alcohol and pharmaceutical industries. Between economic logic and established social norms, how do these individuals handle the negative view of their profession? Loréa Baïada-Hirèche is a researcher in business ethics at Institut Mines-Télécom Business School. Through stories of marketers’ “guilty consciences,” she attempts to shed light on the ways in which professionals come to terms with the ethical concerns of their practices, and the neutralization techniques at work.

 

In France, tobacco and alcohol are responsible for 78,000 and 41,000 deaths respectively every year. and the pharmaceutical industry is regularly shaken by health scandals like the one caused by the Mediator drug or Essure implants. Consequently, working in controversial sectors can pose ethical problems. “Ethics is the field of knowledge that aims to guide individuals’ action by distinguishing between right and wrong ways of behaving. It seeks to answer the question, ‘What should I do?'” explains Loréa Baïada-Hirèche, a researcher in business ethics at Institut Mines–Télécom Business School.

This question arises in particular for employees involved in marketing or promoting harmful or socially questionable products. This leads to a conflict of norms on two levels: on one hand, between the norms of society and those of the organization, and on the other, between the norms of the organization  and those of the individual. How do these professionals experience and handle the ethical issues they are faced at their level? What strategies do they use to ease their guilty consciences? Loréa Baïada-Hirèche and her colleagues have explored this difficult issue.

Small ethical compromises

Their research focused on the tobacco and alcohol industries on one hand, and on the healthcare  industry on the other. The researchers conducted a series of semi-structured interviews with professionals from these three sectors, 17 from the tobacco and alcohol industries and 13 from the healthcare industry. For the researcher, “The qualitative method allowed us to first collect narratives in order to thoroughly analyze individuals’ reasoning and they way they reconstruct and interpret their experiences.”  In short, the goal was to study the subjectivity of marketers’ narratives to focus precisely on the specific characteristics of their justifications within a context.

In their analysis, the researchers combined two complementary theories from the sociology of deviance. The first is the cognitive dissonance theory, which explains that a state linked to a conflict of values is a source of suffering for individuals who therefore seek to protect themselves by reducing this conflict in various ways. The second is the neutralization theory, which identifies several justification techniques through which individuals seek to protect themselves from moral condemnation when their behavior does not align with socially accepted norms– such as denying adverse effects, denying responsibility or denying victims. “Using neutralizations makes it possible to diminish or eliminate the ethical issues involved in decisions,” continues Loréa Baïada-Hirèche.

In order to protect themselves from moral condemnations, feel less guilty and maintain their self-esteem, marketers establish several categories of arguments which rely on neutralization techniques identified by sociologists who study deviance. “For tobacco and alcohol, our study reveals three argument strategies: emphasizing the ethical value of the business through a virtuous organization; lack of accountability due to a law that is too restrictive; and economic rationalization related to the generous compensation provided by the organization. For healthcare, certain individuals turn a blind eye and deny the harmful effects, highlighting the drive for profitability, while others mention the patient benefit to emphasize their general interest mission, and still others go so far as to leave the industry. The impact on employee well-being appears to be greater in these cases,” explains Loréa Baiada-Hireche.

Emphasizing the ethical value of the business and using economic logic

Downplaying the risks occurs primarily in the alcohol industry. Challenging the image of alcohol in people’s minds as a controversial product, marketers who engage in this justification process  emphasize the high quality of the products, such as high-end alcohol. “The respondents stress that it is not the product itself that poses a problem, but rather the consumption practices, in particular in certain groups including young people and pregnant women,” adds the researcher. Using legal restrictions as a way to avoid accountability seems to be a particularly strong justification technique within the tobacco industry. According to the marketers, French law is extremely restrictive and has left them with no real freedom and little leeway to do their job– the imposed neutral pack, tobacco advertising ban, required educational  messages for certain products etc.  “What we see is that accountability is transferred from the company that sells the harmful products to the individuals who consume them. In the case of tobacco, consumers’ freedom of choice is an ambivalent justification, either for denying tobacco producers’ liability in legal proceedings, or for defending civil rights in public relations activity,” explains the researchers.

For the healthcare industry, this strategy of denying harmful affects is, for some, akin to adding new cognitions, by upholding the economic dimension and insisting on the profitability of their industry, which, among other things, helps fund medical research.  Conversely, for a second group, economic logic is overshadowed by the health mission being pursued. These respondents do not mention the profits generated by their work. They insist on the benefits for patients, the seriousness of the professionals with whom they work, particularly in terms of approval from doctors, who are experts in their field. “Here we see the ambivalent nature of the patient benefit argument, which, instead of  preventing concerns, is used to justify them,” says Loréa Baïada-Hirèche and her colleagues.

The final strategy used by respondents in the tobacco and alcohol industries is economic rationalization, meaning economic necessity or an opportunity that compensates for the ethical cost, arriving at the conclusion that it is, ultimately, just a job. In these sectors as well as in the healthcare industry, certain marketers eventually leave their position, as they become aware of the predominance of the economic logic to the detriment of the health mission. Leaving, or radically changing one’s behavior appears to be the only way to reduce their sense of guilt.

Overall, although it is experienced more or less consciously, the researchers were able to observe  uneasiness in their respondents. This is evidenced by how difficult it was to obtain interviews with marketers in these sectors: the researchers had to rely on their personal networks to carry out this sensitive research. “Our aim is to help these employees become more conscious of the defense mechanisms individuals put in place to justify themselves, which are often easier to recognize in others. It’s important for companies to develop and maintain opportunities for discussion to tackle these ethical dilemmas,” concludes Loréa Baïada-Hirèche. Among other things, this will limit suffering in the workplace.

Article written (in French) by Anne-Sophie Boutaud, for I’MTech.

 

digital identity

The ethical challenges of digital identity

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Article written in partnership with The Conversation.
By Armen Khatchatourov and Pierre-Antoine Chardel, Institut Mines-Télécom Business School

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[dropcap]T[/dropcap]he GDPR recently came into effect, confirming Europe’s role as an example in personal data protection. However, we must not let it dissuade us from examining issues of identity, which have been redefined in this digital era. This means thinking critically about major ethical and philosophical issues that go beyond the simple question of the protection of personal information and privacy.

Current data protection policy places an emphasis on the rights of the individual. But it does not assess the way in which our free will is increasingly restricted in ever more technologically complex environments, and even less the effects of the digital metamorphosis on the process of subjectification, or the individual’s self-becoming. In these texts, more often than not, we consider the subject as already constituted, capable of exercising their rights, with their own free will and principles. And yet, the characteristic of digital technology, as proposed here, is that it contributes to creating a new form of subjectivity: constantly redistributing the parameters of constraints and incitation, creating the conditions for increased individual malleability. We outline this process in the work Les identités numériques en tension (Digital Identities in Tension), written under the Values and Policies of Personal Information Chair at IMT.

The resources established by the GDPR are clearly necessary in supporting individual initiative and autonomy in managing our digital lives. Nonetheless, the very notions of the user’s consent and control over their data on which the current movement is based are problematic. This is because there are two ways of thinking, which are distinct, yet consistent with one another.

New visibility for individuals

Internet users seem to be becoming more aware of the traces they leave, willingly or not, during their online activity (connection metadata, for example). This may serve as support for the consent-based approach. However, this dynamic has its limits.

Firstly, the growing volume of information collected makes the notion of systematic user consent and control unrealistic, if only due to the cognitive overload it would induce. Also, changes in the nature of technical collection methods, as demonstrated by the advent of connected objects, has led to the increase of sensors collecting data even without the user realizing. The example of video surveillance combined with facial recognition is no longer a mere hypothesis, along with the knowledge operators acquire from these data. This is a sort of layer of digital identity whose content and various possible uses are entirely unknown to the person it is sourced from.

What is more, there is a strong tendency for actors, both from the government and the private sector, to want to create a full, exhaustive description of the individual, to the point of reducing them to a long list of attributes. Under this new power regime, what is visible is reduced to what can be recorded as data, the provision of human beings as though they were simple objects.

Vidéo de surveillance. Mike Mozart/Wikipedia, CC BY

Surveillance video. Mike Mozart/Wikipedia, CC BY.

 

The ambiguity of control

The second approach at play in our ultra-modern societies concerns the application of this paradigm based on protection and consent within the mechanisms of a neo-liberal society. Contemporary society combines two aspects of privacy: considering the individual as permanently visible, and as individually responsible for what can be seen about them. This set of social standards is reinforced each time the user gives (or opposes) consent to the use of their personal information. At each iteration, the user reinforces their vision of themselves as the author and person responsible for the circulation of their data. They also assume control over their data, even though this is no more than an illusion. They especially assume responsibility for calculating the benefits that sharing data can bring. In this sense, the increasing and strict application of the paradigm of consent may be correlated with the perception of the individual becoming more than just the object of almost total visibility. They also become a rational economic agent, capable of analyzing their own actions in terms of costs and benefits.

This fundamental difficulty means that the future challenges for digital identities imply more than just providing for more explicit control or more enlightened consent. Complementary approaches are needed, likely related to users’ practices (not simply their “uses”), on the condition that such practices bring about resistance strategies for circumventing the need for absolute visibility and definition of the individual as a rational economic agent.

Such digital practices should encourage us to look beyond our understanding of social exchange, whether digital or otherwise, under the regime of calculating potential benefits or external factors. In this way, the challenges of digital identities far outweigh the challenges of protecting individuals or those of “business models”, instead affecting the very way in which society as a whole understands social exchange. With this outlook, we must confront the inherent ambivalence and tension of digital technologies by looking at the new forms of subjectification involved in these operations.  A more responsible form of data governance may arise from such an analytical exercise.

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Armen Khatchatourov, Lecturer-Researcher, Institut Mines-Télécom Business School and Pierre-Antoine Chardel, Professor of social science and ethics, Institut Mines-Télécom Business School

This article has been republished from The Conversation under a Creative Commons license. Read the original article here.