Algorithm Watch: In a quest to optimize welfare management, Denmark built a surveillance behemoth


Udbetaling Danmark was created in 2012 to streamline the payment of welfare benefits. Its fraud control algorithms can access the personal data of millions of citizens, not all of whom receive welfare payments.

In the mid-2000s, Denmark’s government embarked on an ambitious reorganization of local administration. The number of municipalities was cut from 271 to 98. The mergers were expected to create economies of scale and increase efficiency in public services.

Part of the economies of scale took the form of Udbetaling Danmark (Danish for “Payout Denmark”, abbreviated UDK). The organization, which is run by the agency for digitization of the ministry of finance, was set up to centralize the payment of welfare benefits overseen by municipalities: pensions and benefits related to housing, family, disability and maternity leave. At the time, the government claimed that the move would save 35% in administrative costs (officials from several municipalities disputed this figure).

In Denmark, the conversation about UDK’s powers was revived in July 2019, when Justitia, a think-tank, released a report that detailed its activities, which they called “systematic surveillance”. UDK does not provide the actual number of individuals receiving payments, but estimates range between 2.1 and 2.7 million, in a country of 5.8 million inhabitants. Because UDK also collects data on other household members and the immediate family, Justitia considers it likely that UDK processes data on the whole population of the country, sometimes pulling information at daily intervals.

Birgitte Arent Eiriksson, who wrote the Justitia report, is now part of the Danish Data Ethics Council, which advises the government since 2018. She chairs a working group on data linkage for public authorities. (While UDK is not named in the description of the working group, there is little doubt that the issue under scrutiny is related to UDK’s appetite for merging databases). They will provide the government with “a concrete tool that the authorities can use to incorporate data ethics when they want to link personal data and use new technology,” to be delivered in later this summer, Ms Arent Eiriksson told AlgorithmWatch.

Read the full article featuring Birgitte Arent Eiriksson here.


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