Gov. Newsom’s California data dividend idea is a dead end

By Steven Hill, San Jose Mercury News, March 7, 2019

Plan won’t benefit consumers or give them the privacy protections they deserve

Gov. Gavin Newsom recently proposed that consumers should “share in the wealth” generated from our data by companies like Facebook and Google. But his plan for a “data dividend” is the wrong approach. Not only would it hardly benefit consumers, it would reinforce an overly-commodified philosophy for our digital future.

While Newsom has yet to release details, others like Facebook cofounder Chris Hughes have proposed that consumers would be paid for their data by the companies monetizing it. But the money each individual would receive amounts to peanuts. For example, Facebook’s 2 billion monthly users would each receive only about $7.35 if the company proportionally distributed its revenue. Each of Twitter’s 321 million users would receive about $2.83; a Reddit user about 30 cents.

And paying those amounts to users would leave these companies with zero revenue or profits. So in reality, users would receive far less. Online discount coupons for McDonald’s would be more lucrative.

Other associated proposals, such as economist Glen Weyl’s concept of “data-labor unions,” which would negotiate on behalf of individuals with the companies holding our personal data, would be similarly impotent.

But all of these approaches dodge the real question: should these companies continue to be allowed to collect and control the personal data of their billions of users? Silicon Valley’s business model, in which many companies give away their products for free in exchange for monetizing our private information, is a devil’s bargain that seems increasingly unworkable in any scenario.

That’s because in this emerging Digital Age, our personal data is not merely a form of individual property. It is a core part of our personhood, following us throughout our professional and personal lives. Control over our own data ought to be regarded as a human right that cannot be taken, sold or given away.

Jeffrey Chester, executive director of the Center for Digital Democracy, says “Selling our data for a few bucks isn’t the answer and will make the problem worse.”

So what to do? In a sense, we have been here before. Previous governments had to step in to regulate new technologies that were over-exploiting our personal information. In 2003, the National Do Not Call Registry was created to offer consumers a choice whether to receive telemarketing calls at home. Congress also enacted a law to curb unwanted email spam. In 2005, President George W. Bush signed the Junk Fax Prevention Act, permitting opting-out of spam faxes.

So what would be the right kind of policy for internet-based companies?

European competition commissioner Margrethe Vestager, a key global regulator, proposes a Facebook “in which I pay a fee each month. But I would have no tracking and advertising and the full benefits of privacy.”

A more farsighted approach would protect our private information as part of a “data commons” overseen by an independent watchdog agency and guided by sensible rules regarding privacy.  This “Data Oversight Agency” also could play a crucial role in the emerging competition to develop artificial intelligence (AI).

AI development requires massive amounts of data, which “machine-learning” algorithms are trained to plow through to identify patterns and images. An independent agency could ensure the regulated availability of open-source datasets which would allow smaller companies and university labs to have as much data access as large Silicon Valley and Chinese companies.

That would end Google, Amazon and Facebook’s data-opoly, which is narrowly focused on maximizing advertising profits, and spur competition. It would result in more AI research conducted on behalf of the public interest to solve the big challenges of the 21st century.

This would be an innovative alternative to the Frankenstein future that Facebook and Google are pushing. Newsom should be bold and resist turning our data – and our personhoods — into commodities that can be bought and sold.

Steven Hill is a Silicon Valley-based journalist and the author of “Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers.”

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