This document discusses how consumers are the legal owners of their own data and outlines a framework for building trust with consumers based on this principle. It notes that regulations like GDPR are strengthening data privacy laws and consumers are increasingly concerned about how their personal information is collected and used. The document argues that companies should view consumers as partners rather than just as sources of data and revenue, and that a new "Personal Economy" could emerge where consumers are compensated for the value of their own data.

1. © Proprietary & Confidential – Ariadne Capital
The Consumer is the legal owner of their data
Privacy: The Competitive Advantage
29th April 2016
Amit Pau, Managing Director, Ariadne Capital
@AriadneCap
@Encountry
@amit_pau

2. Agenda – The Consumer is the legal owner of their data
2© Proprietary & Confidential – Ariadne Capital
GAFA – Gang of Four 3
Hernando De Soto Polar 4
Changing your business model 5
Data ownership 6
Mobile & Consumer Trust: Why it Matters 7
Can you build a business case for Consumer trust? 10
The identity framework 11
Consumer insights on trust 12
A framework for trust-based services: GDPR 15

3. GAFA – Gang of Four
281.8 306.1 479.5 538.6
Market capitalisation ($bn)
*Source: Thomson Reuters.
Stock prices as of 28/04/2016.
1,606
Combined market
capitalisation
The combined market capitalisation* of these companies is higher than
Spain’s GDP for 2015, which reached the level of c.$1.42tn**.
**Source: World Bank
3

4. Property Rights – Hernando De Soto Polar
De Soto assigned property rights to
Peruvian farmers and demonstrated that
behaviour changed as a result.
“When people have assets, they can build wealth. Data is the
most fundamental asset.”
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5. Shape your industry by changing your business model
Everything is network-based, not linear – Everything is Multi-stakeholder
Company’s ability to shape
industry dynamics
Company market
power increases
Company valuation
increases
Step 1
Micro
Step 2 Step 3
Macro
Business model/Transaction
Goliath/
David
Partnership
Building Net
New
Revenue
Industry > Ecosystem
Distribution > Platform
With Network Effects
5

6. Individuals should own their own data – it’s a question of timing
“We believe that consumers are going to take ownership of information about
themselves and demand value in exchange for it. As a result, negotiating with
consumers for information will become costly and complex. That process has already
begun to unfold, but it could take several years to play out across broad segments of
customers and products.” – John Hagel
https://hbr.org/1997/01/the-coming-battle-for-customer-information: A version
of this article appeared in the January–February 1997 issue of Harvard Business
Review. John Hagel III is Founder and Chairman of the Deloitte Center for the
Edge, a research centre based in Silicon Valley.
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7. 7© Proprietary & Confidential – Ariadne Capital
Mobile & Consumer Trust: Why it Matters
2016

8. Mobile & Consumer Trust: Why it Matters
8© Proprietary & Confidential – Ariadne Capital
2005 2016 2020
Connected Cars Connected Homes
Internet of Things Robotics
Health Tech EdTech
Monetised Big Data

9. 9© Proprietary & Confidential – Ariadne Capital
Global mobile connections Unique global mobile users
Mobile & Consumer Trust: Why it Matters

10. Can you build a business case for consumer trust?
10© Proprietary & Confidential – Ariadne Capital
$33 million settlement; 75,000 consumers’ data breached.
Includes $100 compensation payment to each consumer
37 million users’ data hacked and published
36 million users’ data hacked and published including 3.1
million user’s credit card data
15 million consumers’ data leaked through Experian
credit searches
2.4 million customers’ data and 90,000 credit card details
hacked and published
And many, many more…
$1.5 billion in fines for LIBOR rigging
$18.7 billion in fines for Deepwater Horizon
Maximum potential US fines $90 billion

11. The identity framework
11© Proprietary & Confidential – Ariadne Capital
“Identity will be the most valuable commodity for citizens in
the future, and it will exist primarily online.”
The New Digital Age, E. Schmidt & J. Cohen
• Ariadne Capital’s research has identified Identity-as-a-
Service as a $1.5 trillion ecosystem.
• The mobile operators are at the heart of the IaaS
ecosystem.
• For users, coming online means coming into possession of
multiple in the physical and virtual worlds.
• Organizations will have to discover their own formula of
existing in both worlds, and how they will leverage the best
and worst of what each world has to offer in the digital
age.
• The number of people connected to the Internet worldwide
increased from 350 million to more than 2 billion – first
decade of the 21st century.
• The number of mobile-phone subscribers rose from 750
million to 7.5 billion over the same period.
• Those that can best navigate this new multi-dimensional
world will find themselves ahead in the business landscape.

12. Consumer insights on trust
12© Proprietary & Confidential – Ariadne Capital
Of consumers think it’s hard to trust companies
when it comes to the use of their personal data
Of consumers are concerned that information
provided for one purpose is used for another
purpose
Of consumers believe that companies and
agencies ask for too much personal info
Of consumers trust MNOs to protect their
personal data
Survey data sources – World Economic Forum
Cost of customer acquisition based on
Facebook’s $19 billion valuation of WhatsApp
with its 600 million uses
Of consumers want to be in control of their
data
“Consumers are legal owners of their data”

13. Consumer insights on trust
13© Proprietary & Confidential – Ariadne Capital
•Happy to share everything about themselves in
public and onlineExhibitionists
•Lobby and intensely worry about privacy in all
aspects
Privacy
zealots
•This group has always had concerns, but mostly not
sufficient to warranty action that takes any effort.
• It is a balanced view of effort vs. risk.
The
mainstream
Previously privacy zealots were concerned with widespread data use by governments,
data breaches in companies and retargeting. In recent times, thanks to high profile
cases of major companies’ data breaches, the Edward Snowden & Angela Merkel cases,
the sleeping mainstream has awoken. Concern is being shared by all.

14. Consumer insights on trust
14© Proprietary & Confidential – Ariadne Capital
16
31
53
22
24
54
16
49
33
0 10 20 30 40 50 60
"Unconcerned"/"Trusting"
"Fundamentalists"/"Cautious"
"Pragmatists"/"Rationalists"
2012 % 2015 % DataIQ %
For comparison – DMA & DataIQ
Sources: DMA, “What the consumer really thinks,” 2015 v 2012;
DataIQ GDPR Impact research series

15. A framework for trust-based services: GDPR
15© Proprietary & Confidential – Ariadne Capital
Governments are creating regulatory frameworks:
• Safe Harbour Privacy Pact
• European Court of Justice’s recent ruling
• EU data protection laws (GDPR)
• Fines of up to 4% of global revenue for offenders
At the same time, consumers are themselves taking things into their own
hands:
• 63% of consumers refuse to ever sign into apps using Facebook Connect
– eshewing the convenience of single sign in because of fears of their
own and their friends’ privacy
• The use of ad blockers has grown 44% year on year. The ad industry has
paid the price for using essentially free ad delivery to not care what the
response rate is – oblivious to how much the wrong message can upset
consumers

16. © Proprietary & Confidential – Ariadne Capital
A framework for trust-based services: GDPR
16
Push
Marketing
Pull
Relevance
Consumer Commerce
Make and
Save MoneyMake it Easy
Legislation
Consumer Data Awareness
Disruptive Models
Save Me
Money/Time
Protect My
Data
Context and
Support Me
Be There
Be Useful
Control My
Experience
Collect/Store
My Data
Own and
Sell My Data
Create
Shareholder
Value
Reward Me
for My Loyalty
Reduce
Liability
Data
Transfer
Third
Party Data
If unsure of your data and impact of the GDPR we recommend you
undertake a thorough audit with a specialist such as DQM GRC

17. A framework for trust-based services: GDPR
17© Proprietary & Confidential – Ariadne Capital
The most significant rule to change:
• The Individual’s data is owned
by him/her
• It has an anticipatory status as a
legal asset and actor. Its value is
recognised in an economic
upside to the Individual in all
his/her transactions as a citizen
in the country
Ariadne Capital &
EntrepreneurCountry Global call
the economy which stems from this
game—change: The Personal
Economy
How will consumers be rewarded
for their data in the Personal
Economy?Business model/Transaction

18. Ariadne Capital
Amit Pau
Managing Director
Ariadne Capital Ltd
Mobile: +44 (0) 7792 943 596
Direct: +44 (0) 203 021 1645
amit.pau@ariadnecapital.com
www.ariadnecapital.com
www.entrepreneurcountryglobal.com
© Proprietary & Confidential – Ariadne Capital
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