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Europe Data Protection Digest | Notes from the IAPP Europe Managing Director, November 4, 2016 Related reading: Notes from the IAPP Europe Managing Director, 14 Dec. 2018

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Greetings from Brussels!

This week I watched a fascinating — perhaps alarming — current affairs program on China, which gave me cause for much reflection on the issue of online profiling and the levels of acceptable monitoring we are willing to tolerate as a society. This should definitely be of interest to all the privacy pros out there.

Imagine a world where an authoritarian government monitors everything you do, amasses data on almost every interaction you make, and awards a "real-time" and continuously updated score that measures how “trustworthy” you are. Well, this is exactly the scenario contained in China's ambitious plans — as outlined in a lengthy planning document from China’s elite State Council —  to develop a far-reaching social credit system, a plan that the Communist Party hopes will build a culture of “sincerity” and a “harmonious socialist society” where “keeping trust is glorious.” In short, a socialist utopia 2.0 is on the horizon.

The ambition is to collect every footprint of online information available about China's companies and citizens in a single central repository —  and then assign each of them a score based on their political, commercial, social and legal “credit.” The government has yet to announce the details of the plan, how the scores will be compiled and how qualities and behaviors will be weighed against one another. Although we can safely assume that the state will be the ultimate judge.

For now, the program is limited and the government is watching and evaluating how eight Chinese companies issue their own "social credit" scores under state-approved pilot projects. One of the most high-profile projects has been launched by Sesame Credit, the financial arm of Alibaba. With 400 million users, Alibaba is the world's biggest online shopping platform. It is using its unique database of consumer information to compile individual "social credit" scores. An example of crossover impact is demonstrated by the partnership between Baihe — China’s biggest matchmaking dating service — and Sesame to promote clients with good credit scores, which in turn gives them prominent spots on the dating website.

Controversially, Sesame does not hide that it judges the types of products shoppers buy online. And while some Chinese citizens might think the credit scheme — as it stands today — has benefits, there are already murmurs that the scoring can be harsh. For example, purchasing video games gives consumers a low score (considered indicative of idle behavior), while buying diapers denotes a parent, therefore a higher scoring as a responsible consumer. More of a concern, many consumers are unaware they are being rated by Sesame at all.

Which brings us to the question: What could be the eventual penalties for a low credit score? Chinese policy documents published in September of this year cited a couple of examples, such as not being considered for public office, losing access to social security and welfare, or your children not being allowed into the more expensive private schools. Like it or not, the credit system is here to stay, and will be mandatory for all Chinese citizens within the next five years.

One cannot predict the impact of this brave new world, but I think we can safely say that it might not end happily for those who step out of line with popular opinion.

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