The near- and mid-term future of data
monetization is difficult to forecast, as it largely hinges on the success
or failure of disparate legislative initiatives. These initiatives
seek to increase competition in data monetization, increase data security,
strengthen consumer rights, and improve data-use transparency.
All major automotive markets have some form
of data protection law in place, ranging from general guidelines to strict
rules with hefty fines. In Europe for example, GDPR has been an umbrella law
since its enaction in the middle of 2018. It represents the most stringent data
protection regulation in the world, and has been used as the legislative benchmark for other regions. Conversely, in the US, there is currently no overarching federal
law regulating the acquisition, storage, or usage of personal data. Instead, the
US Federal Trade Commission’s “Fair Information Practices” acts as guidance
alongside several industry- and state-specific laws.
In regards to data access, several forms of
pro-competition legislation are being considered, which could lead to OEMs
having to offer consumer data to any 3rd party at a “reasonable price”,
dictated by regulatory powers. In the US, access to vehicle data is being
driven by automotive aftermarket associations that have recognized the
potential business risk of allowing automakers to completely control the flow
of data to their back-end servers. In Europe, where discussions on the topic are
the most mature, the European Commission, the Association of European Car
Makers (ACEA) and other industry bodies have thrown much of their weight behind
off-board data server solutions, such as the “Extended Vehicle” and the “Neutral
Server” to pacify 3rd parties who want access to vehicle data.
An OEM with little ambition for data
monetization will likely not be affected much by these regulations. However, an OEM seeking to maximize data revenue will have a tough road ahead if they are
not prepared for each possibility. BMW is a good example of an OEM that has taken a
proactive approach by creating its own interpretation of a neutral server,
allowing its internal data-driven business to adapt to the changing landscape
prior to being forced to do so.
"There are still some data-driven
services that an OEM may be best-suited to provide, such as prognostic failure
detection, maintenance optimization and trade-in optimization" says Jack Palmer, Senior Connected Car Specialist at SBD Automotive. "Services such as
these will engender customer satisfaction and loyalty, likely bringing in much
more revenue than simple data transactions, and focusing on this type of service
may offer the best long-term outcome for OEMs and their customers."