Terror bytes: the use of big data has come under the spotlight amid concerns that individuals' private information is being misappropriated on a commercial scale. Elisabeth Jeffries assesses the business implications as the EU prepares to update its data protection legislation.

It was intended as an open, free and benign service connecting people across the planet. But today the web seems to be trapping terabytes of innocently supplied data for more pernicious purposes. Alongside the spiders of Google and Facebook at its centre, some claim, lie a number of national intelligence agencies that are sifting through all the material gathered in order to spy on the populace. Public opinion about the internet is changing.

The early signs of trouble came last year when CNIL, France's information security commission, told Google that it was checking whether the company was complying with French data protection law--a warning it later claimed that Google had ignored. Then Facebook's "like" button, enthusiastically clicked by millions of users, was unmasked as a covert source of targeted advertising; Barclays announced that it was going to sell data on clients' spending habits to other companies; and the US National Security Agency was caught spying on European institutions. All of a sudden, the internet is threatening to mutate from 21st-century pleasure dome into a house of horrors.

A cluster of new technologies has enabled this explosion in the volume of information being captured. Microchips the size of a fingernail, now containing several billion transistors (raising memory capacity), have driven the development of smartphones and other mobile devices, while the 3G wireless telephony standard has given millions of people high-bandwidth access to the internet on these devices.

"The growth we have seen in smartphones and their applications has depended partly on wireless broadband systems such as 3G. Five years ago there wasn't much mobile web access, so you couldn't access apps on your phone," says Anna-Verena Naether, public affairs manager at ICT trade association Digital Europe.

Other electronic advances have slashed connection costs, while cloud computing is expected to transform business communications. Developments in satellite navigation technology have also improved mapping and tracking.

The esoteric nature of this high-tech industry has inevitably fuelled privacy concerns. Many consumers are clueless about data storage, yet they are hooked into networks for many everyday transactions while being bombarded with demands for more and more information. They must rely on trust and, for many younger people, opting out means social exclusion. Meanwhile, the speed, frequency and complexity of transactions mean that the...

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