“Data is the new oil” has been a catchphrase for some time now. There are lots of similarities. Both have myriad uses and are resources that can be processed, shaped, and molded into a wide variety of valuable products. They flow in pipes. Both can be expensive to produce.
Companies use both oil and data to create, market, and sell their products and services. Artificial intelligence is the latest in the incredible line of developments in the manipulation and use of information. Just recently I saw the surprising news that there is not enough information in the world on which to train new artificial intelligence models. Will we run out of information, just as forecasters predict that eventually we will run out of oil?
On the other hand, data and oil are different in many important ways. Apart from the obvious ones, data often is a byproduct of other activities. Businesses generate financial information, trade secrets, personnel data, and other valuable information. Individuals do so almost unintentionally; personal consumption and other behavioral information, captured through cell phone apps, credit card transactions and even video surveillance when out and about in public, all are hot commodities.
Another mantra one hears is “information wants to be free.” Human beings are naturally curious beings and want to know what’s going on around them. If someone else has a good and useful thing, of course we want to have it too. Everybody wants a piece of the action.
Governments also want more information about business activity and corporate transactions. Officials track economic activity as a guide to setting interest rates and implementing economic policy. They gather information to pursue other objectives, such as law enforcement, trade controls, or breaking up monopolies. Some examples (there are of course many more) include:
- Through the Corporate Transparency Act, as previously reported, the government wants to know about shell companies that potentially may be used for illegal purposes, such as laundering illegal ransomware or HaaS proceeds.
- As reported by David Schwartz and his colleagues in this newsletter, for a long while the Bureau of Economic Analysis of the U.S. Department of Commerce has collected statistical data on foreign direct investments (FDI) in U.S. businesses.
- Transactions may be reportable to the Federal Trade Commission or Justice Department for review of antitrust issues (under the Hart-Scott-Rodino Antitrust Improvements Act of 1976), or by the interagency Committee on Foreign Investment in the United States (CFIUS) for review of potential national security concerns.
- Under the Securities Act of 1933 and Securities and Exchange Act of 1934 and accompanying regulations, all manner of detailed information about the finances and operations of a publicly traded company, its directors, officers, and major shareholders must be disclosed to the public and the Securities and Exchange Commission. To this last point, more and more firms, even very large ones, are seeking to avoid the public disclosures, scrutiny, and judicial control exerted by federal and state governments over public companies by remaining in private ownership and control.
Additionally, hackers, business competitors, and even national governments want to steal information. One of the fastest growing areas of our work is advising companies that have fallen victim to different forms of computer hacking: ransomware attacks, “Hacking as a Service” (HaaS), spoofing, theft of trade secrets. All our clients are experiencing this.
So, information is incredibly valuable, often guarded jealously, of vital interest to individuals, businesses, and society, and in need of protection. We certainly hope you find the information in our long-running quarterly Business Law Update to be useful and important. We appreciate your attention and welcome your constructive comments, questions, and feedback.
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