A Blog by Jonathan Low

 

Jun 24, 2019

Bipartisan US Senators Want Big Tech To Put A Price On Personal Data

How 'free' is free - and to what degree are users benefiting more than providers? JL


Cat Zakrzewski reports in the Washington Post:

Their bipartisan bill would require companies to regularly disclose the ways consumers’ data is being used, as well as file an annual report on the total value of the data they’ve collected. Their proposal will help consumers make more informed choices when they sign up for "free" services online that make money through ad targeting and data collection rather than payments from consumers. Putting a price on data could make it easier for antitrust enforcers to identify unfair transactions or anticompetitive practices, especially in social media where services are free and regulators can't rely on prices of the service to measure whether the companies' practices are harming consumers.
Sens. Mark Warner (D-Va.) and Josh Hawley (R-Mo.) will propose legislation today forcing the social media companies to tell users how they are monetizing their data. Their bipartisan bill would also require the companies to regularly disclose the ways consumers’ data is being used, as well as file an annual report on the total value of all the data they’ve collected.
The senators think their proposal will help consumers make more informed choices when they sign up for "free" services online that make money through ad targeting and other data collection services rather than payments from consumers.
“For years, social media companies have told consumers that their products are free to the user. But that’s not true — you are paying with your data instead of your wallet,” Warner said in a statement Sunday night. “But the overall lack of transparency and disclosure in this market have made it impossible for users to know what they’re giving up, who else their data is being shared with, or what it’s worth to the platform.”
The senators also say their proposal could help Washington regulators who are increasingly eying the impact Big Tech has on competition. They say the lack of transparency around the companies’ data collection practices and the data’s value has been an impediment to the Federal Trade Commission as it seeks to crack down on Silicon Valley — and their legislation would help pull back the curtain. 
The pair said putting a price on data could make it easier for antitrust enforcers to identify unfair transactions or anticompetitive practices, especially in categories like social media where services are free and regulators can't rely on prices of the service as a means to measure whether the companies' practices are harming consumers. The senators are unveiling their legislation as antitrust activity is snowballing in Washington, with House lawmakers opening a wide-ranging probe into the tech industry’s power and federal agencies considering probes into tech giants including Google.
“It's also about trying to grapple with the enormous power these companies have,” Warner said in an interview on Axios
on HBO, where their effort was first reported. “I don't think there was a time in history when companies grew so quickly, had as much pervasive power, and really have as much ability to kind of influence everything about how we do, and how we vote, and how we think than these companies do.”
The legislation is likely to face pushback from the tech industry — especially because it could be difficult to come up with a consistent way to calculate data’s value when companies might use the same data for many different parts of their business. The bill — officially called the Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data or DASHBOARD Act -- calls on the Securities and Exchange Commission to develop methodologies for calculating data’s value, and it encourages the agency to be flexible based on sectors or differing business models. It only applies to companies with more than 100 million monthly active users.
Warner said in the Axios HBO interview that companies clearly have a “pretty darn good notion” of how much data is worth based on their ability to strategically make acquisitions. He pointed to Facebook’s acquisition of Instagram.
Warner and Hawley are two of the senators most active on tech issues in Washington, and the duo previously teamed up on Hawley’s “Do Not Track” legislation, which would allow people to opt out of data tracking online, much like they opt out of calls from marketers with the “Do Not Call” list.
Amid a broader debate about privacy in Washington, there are questions about how much impact the DASHBOARD Act would have. As Lindsey Barrett, a staff attorney at Georgetown Law’s Institute for Public Representation Communications & Technology Clinic notes, greater transparency might not
change tech companies’ practices:
David Carroll, an associate professor of media design at The New School, noted it could help consumers seek damages against companies:

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