Senate Moves to Set a Price on Data Privacy
A new bill that could fundamentally change the relationship between major tech companies and their customers is being debated in the U.S. Senate.
The move is the first attempt to assign a dollar value to personal data, treating it just like any other commodity. The effect will be to make companies that trade in data more financially accountable to their users and to the SEC.
This bill is part of continuing efforts by lawmakers to bring federal consumer data protection regulations more into line with EU GDPR. Knowing the true value of their data may encourage consumers to take a greater interest in what happens to the data they share online and take more steps to protect their privacy.
Legislation, however, is still some way off.
For the time being, the best protection for consumer and business privacy remains VPN software.
A Dashboard for Data
Since the EU General Data Protection Regulation (GDPR) was introduced last year, U.S. authorities have been working to deliver greater consumer protection measures stateside.
Localized state initiatives such as the California Consumer Protection Act (CCPA and the New York Privacy Act (NYPA) are now joined by the national Dashboard Act.
Designing Accounting Safeguards to Help Broader Oversight and Regulations on Data (DASHBOARD) requires companies whose business models depend on harvesting data to publicly declare how much they earn from the data they and their partners collect.
At the end of each quarter, tech platforms with more than 100 million users – including the likes of Facebook, Google, Amazon and Twitter – would also have to tell consumers exactly what their personal data is used for and whether it’s being sold to/shared with third parties.
What is Data Worth
Dashboard is important because it demonstrates a readiness among lawmakers to tackle privacy issues at a national level. It is also public recognition that data is a commodity and has its own intrinsic value.
While a finite value for data has yet to be determined, there is a clear correlation with the balance sheets of the main technology platforms.
As a guideline, Facebook valued its average global earnings per user (ARPU) for Q1 2019 at $6.42. But this measure is, at best, a rough approximation.
Placing a true value on data turns out to be far more complex.
The value of a single piece of data on its own is precisely zero. Only when combined with and analyzed against large volumes of related data does it acquire added properties from which revenue can be generated.
By enshrining the concept of “data as an asset” in a legal framework, The Dashboard Act would have significant business and financial implications for the main technology platforms.
Before upsetting the status quo, senators should ask if consumers really want or deserve this.
Most users have been happily paying for “free” online services with their data for years. On the one hand consumers tell researchers they care about their data but continue to use services that blatantly take liberties with it.
Lately, Facebook has taken hits from one data scandal after another – yet its user base continues to grow.
This phenomenon is known as the ‘privacy paradox’, prompting a series of questions. For instance, once consumers know how much their data is worth would they really make better, more informed decisions or would they carry on as before? And if an exact value for data can be calculated, who would benefit? Should consumers receive financial compensation for the free services they already enjoy? What would be gained by making the tech platforms abandon the data-for-services exchange model?
User data has become fundamental to the way businesses, industry, governments and public services operate. Once harvested it can be sliced, diced and shared ad infinitum to achieve a great many ends – from personalized advertising to improved productivity to product innovation and remote services delivery.
There is clearly still much to debate and we are still a long way off answering these questions any time soon.
Value of VPN
Regardless of the outcome, businesses and consumers will still need tools that protect the privacy of digital communications over the public Internet.
A VPN software service gives users complete protection for personal or customer-sensitive data. It also ensures organizations comply with data protection laws.
Professional, enterprise-class VPNs automatically encrypt data passing between corporate networks and remote users.
They may also be scaled easily to centrally manage and authenticate the data protection requirements of many thousands of remote users or devices.
Consumers who care about their data privacy can be confident that their personally identifiable information (PII) is shielded from the view of casual observers.
In summary, the leading technology platforms have built immensely profitable global businesses from collecting and aggregating the personal data of private individuals.
Legislators are finally waking up to this. Initiatives like DASHBOARD, which aims to hand back some control over data back to the consumer, represent the first tentative steps towards redressing the balance.
However, a good VPN service is really all businesses and users need to protect their sensitive data communications as it passes over the public Internet.