“Personal data is the new oil of the internet and the new currency of the digital world.” Not my words, but words of Ms Kuneva, the European commissioner back in 2009. As much as the bureaucrats are removed from the real life, she was right then and even more right now.
Just look at the valuations of the data businesses, like Facebook or Google, or their newer rivals like Snapchat. If you need further confirmation, Cambridge Analytica of a recent fame has summed it up in their corporate slogan — “Data drives all that we do.”
Cambridge Analytica reportedly paid 75 cents to $5 apiece for personal data on us. That is just one firm! Our own research suggests that data worth at least $7,000 per US internet user is being sold by the US data brokers alone every year.
Whether you like it or not, there are thousands of firms who sell and purchase your personal data on a daily basis. In fact, there are no businesses today, which would not use your personal data, whether it is your local hardware shop or Amazon. Your data is vital in order to sell something to you, whether you need it or not, whether it is groceries or voting prescriptions.
Multiply 75 cents by the number of active businesses, who are interested to tailor their products and services for their customers, and you get the rough idea, how much your personal data is really worth. The amounts are staggering. And yet we, as the source of data, don’t get even a penny of this value. We sometimes get some services or free coupons, but these are scraps from the table.
No wonder for more than a decade there are ongoing attempts to find ways for you to sell your data and profit from it. Back in 2000, four years before the launch of Facebook and seven years before the first iPhone, the British man Chris Downs sold all his personal data on eBay (800 pages at the time) for 150 British pounds (~200 bucks). In 2014 Dutch student Shawn Buckles repeated this for 350 EUR (~400 bucks), which TNW actually purchased. Buckles’ data included everything from browsing data to email conversations. One year before, in 2013 Financial Times built a data pricing calculator, which however suggests pennies for various bits of your data, even if you are a millionaire.
Picture is not rosier on this side of the Atlantic. US startup Datacoup launched in 2014, aimed specifically at helping you monetize your data. Datacoup was initially offering few bucks a month for opening up (linking to their service) your social media, financial and even online health accounts, but has lately stalled. Others like Digi.me, DataWallet are trying differently, but are not paying anything to write home about.
These sums, while not to be sniffed at, are not going to make you rich and are not enough to make a bite at the data profits pie.
Why selling individually does not work
Unfortunately, all attempts at selling individual’s data fail to ascertain and hence fail to overcome two major problems.
First problem is — you need to collect all of your personal data to be able to sell it for more than few pennies. That means huge data sets, terabytes of data. Doing this yourself is a daunting and expensive task, accompanied by huge security risks (consider what happens if such data set is mishandled). You may end up spending more time and effort collecting, safekeeping, and transferring your data, than earning from the sale.
Second problem is the lack of efficient data market. There has to be transparent and competitive market for price discovery. Moreover, the sellers’ and buyers’ bargaining powers have to be about equal. There have to be many buyers, and individual sellers have to be somehow “unionized.”
I’m not saying that data sales and transfers are not viable in principle. They are happening every second. Businesses from car shop to Facebook are selling your data (or insight into it, they call profiles) to anyone paying.
Many of data businesses have developed efficient ways to collect, process, transfer, and sell our data. Just last month Facebook transferred data of 1.5 billion accounts outside of the Europe in order to avoid the new EU General Data Protection Regulation rules. Think about it for a second — data of 1.5 billion accounts!
Given the resources at hand in Facebook, it would be surprising if any outsider would innovate on the ways that Facebook processes or sells our data. It’s another matter how moral or legal these practices are, but there is no doubt that they are efficient. None of us individually have a chance to compete with that, and why should we?
Shortcut to data value
We may not need to sell our data ourselves, in order to extract value from it. There has to be a different way. I believe that the most likely way to achieve this is not to try to sell data, but to authorize it with a consent. So you’ll probably never sell your data, but you can make money off your consent.
Instead of selling data, we need something more efficient. Such as shortcuts to data. Shortcut to data from a legal perspective is your consent. Consent is also a key to data value. Think about links on the internet that revolutionized data management, and link indexes (that underpin search engines) that pooled such links in one place and so revolutionized access. Why not apply the same principles to personal data?
Shortcut solves the first data sales problem. You no longer need to collect and transfer data yourself. And if you do not deal with data itself, then you do not have to worry about security.
Bear with me. Data harvesting and selling is already major and very efficient business. The problem is that we — the data sources — are sidelined. Our data is acquired for “free” by the data businesses and more often than not without our consent. Then it is pooled together to increase value, and then sold.
Consents would make it legitimate and hence more valuable. Consents provide a way for data sales to be lifted out of the shadows. Pooled consents, like pooled data, increase value and provide a possibility for us to get a share of it. Contrary to data, it’s not easy to get consents without us. By offering and pooling consents, each of us may get part of the profits in data business, and more control over it.
Pooled consents not only increase data value, but also solve the second data sales problem — they enable price discovery and more balanced bargaining — both necessities for the healthier data market.
The ways that the data industries deal with your data are not going to change anytime soon, but we may allow them to operate under our consent in exchange for some part of the value that they are creating and without undermining the efficiencies in the existing data processing models.
Source: The Next Web