Big data is hot. More and more devices are connected to ‘the Internet of Things‘, giving companies a wealth of valuable information. Although the term ‘big data’ is relatively new, the collection and storage of large amounts of information for targeted analysis existed long before the Internet. Emerging markets are growing at a furious pace and the amounts of data created and stored every second are unimaginable. Big data is big. Big data is big. From satellite photos to the number of likes on your last Instagram post.

New oil

Big data has endless applications in companies. If companies uncover hidden patterns and correlations and thus gain insight into big data, this results in unprecedented commercial opportunities. Storing, analysing and generating data can optimise a company’s policy – whether this is a one-man business or a type of Facebook – in a way that was not previously possible. From risk and personnel management to marketing, from education and financial institutions to retail. Analysing data can help an organisation in a variety of ways. Companies can use data to, among other things, reduce costs, speed up decision-making, learn from the competition and prevent fraud. This in turn leads to growth and higher productivity.

Big data figures are a strong incentive for multinationals – but recently also for smaller companies, SMEs and the self-employed – to collect data on a large scale. This data, in turn, is used for targeted advertising and to improve products, production processes and services. For more and more companies, (personal) data is becoming the central ‘oil’ for business strategy and these data-drivenbusiness models and strategies are being used as a strategic asset to gain a competitive advantage.

Tech companies

The excellent example that uses such a data-driven business model is one of the largest technology companies. Personal data is an important form of income for Facebook, as it generates money from the use and analysis of this data. Facebook offers its users a ‘free’ service in exchange for data. Such a data-driven business model relies on users’ data in order to optimise their services on the one hand, but also to advertise in a targeted way, influence voting or buying behaviour or make predictions about users on the other hand.

Netflix also collects data. This is done via social media, external data platforms and the platform itself. For example, data is collected about the location of users, the interaction of users with content (pausing, skipping, rewatching,…), the time or day on which a certain type of content is viewed and its influence on the type of content. Netflix knows which medium is being used to watch and how this influences the type of content. With the help of this data Netflix not only determines the organisation of the content for its users, similar content can also be promoted. Netflix’ big data strategy is a good example of how companies can benefit from data.

But also

Not only tech companies use big data. In the retail and manufacturing sectors, too, the collection and analysis of data has a direct impact on the innovation of products and services. Retailers analyse data to predict demand and trends, to optimise competitive prices and design marketing strategies. For example, some retailers have observed an increase in demand for books during the winter months, causing some online shops to increase the number of book recommendations on social media and even target regions where temperatures are falling.

In education, teachers can analyse data collected from millions of students around the world to understand how people learn and why students fail. Public authorities analyse big data, helping to improve public services and prevent crime. Banks use data for customer satisfaction, but also to reduce risk and fraud while complying with regulatory guidelines. Big data, for example, gives investors a more transparent picture of the different markets and future prospects of certain companies. Banks, more than any other sector, have a responsibility to protect the privacy of individuals and manage risk, and big data helps. Health care also benefits.

Flip side of the coin

Most Internet users seem to see little risk in the ever-increasing sharing of personal data. Digital communications and the ‘free’ nature of digital services lead to network effects that reinforce market power. This threatens to exclude competitors and make consumers dependent on technology companies. Customers do not pay with money, but with data. In this way, technology companies can start abusing their dominant position. For example, Facebook was reprimanded by the German competition authority for abusing its dominant position by applying unclear conditions, encouraging users to share more personal information, and clearly losing control over the data they shared.


The huge amounts of data that companies collect are only of value to them if they learn to process and understand the information. Data analysis is the process of understanding information, making connections and gaining insights. Big data is big business when the facts from the analysis guide decision-making. It is vital that today’s companies align their big data programmes with their business objectives in order to remain competitive. As data mining technology evolves, organisations need to learn how to interpret insights in order to make the best use of information. The era of big data will fundamentally change many organizations and lead them to information-driven business models. As the collection and analysis of big data continues to increase, it will significantly affect business and industry as well as societies around the world.

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Written by Emiel Koonen, Legal Adviser theJurists, and Kris Seyen, Partner theJurists.

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