Trying to loosen Big Tech’s grip on our personal data
The market for our digital data can seem like a lopsided bargain.
We all create valuable data points with every tap on a screen or keystroke — clicks, searches, likes, posts, purchases and more. We hand it over willingly for free services. But the biggest economic windfall goes to tech giants such as Google and Facebook. Their corporate wealth is built on harvesting and commercializing the information supplied by the online multitudes.
“Imagine if General Motors did not pay for its steel, rubber or glass — its inputs,” said Robert Shapiro, an economist who recently did an analysis of the value of data. “That’s what it’s like for the big internet companies. It’s a sweet deal.”
But there is a growing collection of people seeking ways to alter that arrangement. As a disparate group of academics, economists, technologists and lawmakers, their politics range from moderately liberal to free-market conservative.
They are pursuing different paths. Some have done research to put a value on personal data, as a way to inform public debate on how to broker a better deal for the online proletariat. Others propose recognizing the data as a tradable asset or as labour, to help create an efficient market for the data and return more digital wealth to individuals and society.
Last month, Democratic Sen. Mark Warner co-sponsored a bill that would require the big internet companies to regularly inform users of what personal data they collect and to disclose the value of that data.
“I’m not sold on what the approach should be,” said Warner, a former technology investor and a frequent critic of the tech giants. “But the status quo — this massive imbalance of power — cannot stand.”
The rising calls for a better data bargain come during an intensifying backlash against Big Tech and its handling of user data. Lawmakers and regulators in several countries are investigating the companies’ market power, their role as gatekeepers of communication and their handling of data, especially in failing to protect users’ privacy.
On Wednesday, Facebook agreed to new layers of oversight and a record fine to settle privacy violations. It also acknowledged that it was under investigation from the U.S. Federal Trade Commission for antitrust concerns. And on Tuesday, the U.S. Justice Department said that it would begin examining the internet giants’ domination over the market to determine whether they had sought to stifle competition.
Not everyone agrees that free services paid for with advertising and data are a bad bargain for consumers. The consumer benefit from free internet services was estimated to be more than US$100 billion in the United States alone, according to a 2012 paper cowritten by Erik Brynjolfsson, an economist at the MIT Sloan School of Management.
That figure would be far higher today, given the growth of online offerings. “Consumers do get a huge amount of value from those services,” Brynjolfsson said.
But the advocates for a new deal on data are gaining momentum as more is known about how the big internet companies use personal information. Giving information to Google, Facebook or Amazon, for example, is not just a signal of interest or preference, but also the raw material for targeting ads, steering online behaviour and training artificial intelligence systems like facial recognition.
Consumers are often unaware of the many uses of their data. So far, privacy concerns have been the main focus of scrutiny. But the attention of lawmakers is starting to turn to the concentration of data wealth in the hands of a few companies.
A goal of the legislation introduced last month by Warner and Republican Sen. Josh Hawley is “to give consumers some sense of the value of the data they are giving up,” Warner explained.
How much personal data is worth is a tricky calculation. Estimates vary widely, depending on assumptions. The recent study by Shapiro’s consulting firm took several factors into account, including the falloff in online advertising efficiency when people opt out of data collection.
The study estimated that the corporate payoff — mainly to big-tech companies — from collecting the personal data of Americans online was US$76 billion in 2018 and that it would rise sharply in the future.
If the government collected a 50 per cent fee from companies using Americans’ personal data, Shapiro said, it could contribute significantly to rebuilding the nation’s infrastructure or supporting social safety net. If paid out to individuals, it would be a cheque for $122 a person last year. The study was done for Future Majority, a research centre for the Democratic Party.