California Governor Gavin Newsom has proposed that tech giants such as Facebook and Google, which make billions from using the private data of the state’s 40 million residents, pay them for the privilege.
Newsom floated the idea in his State of the State address delivered on Tuesday, February 12 without naming names but it is clear where he’s directing the proposal. In principle, what Newsom is calling a “new Data Dividend” is tied to the California Consumer Privacy Act signed into state law last June. Under the Act, consumers have the right to know what personal information a business has collected on them, to deny a business to sell their personal information to third parties, to have a business delete their personal information and to receive equal service should they choose not to share their personal data.
The California law, which in spirit resembles the European Union’s General Data Protection Regulation, is the first of its kind enacted by a state in the U.S. Newsom’s point is that consumers have a right to share in the profits earned by companies leveraging their personal data into profits. The Governor intends to put together a committee to see if the “data dividend” is a plausible idea that can progress further, perhaps into law.
“California is proud to be home to technology companies determined to change the world,” Newsom said in his address. “But companies that make billions of dollars collecting, curating and monetizing our personal data have a duty to protect it. Consumers have a right to know and control how their data is being used,” he said. “California’s consumers should also be able to share in the wealth that is created from their data. And so I’ve asked my team to develop a proposal for a new Data Dividend for Californians, because we recognize that your data has value and it belongs to you.”
How the committee is going to work in practice is still up in the air. Newsom spokesman Brian Ferguson said that the governor is “open to constructive input on this issue and has directed his team to work with the experts in this area nationally and legislators to recommend a proposal. Right now we are just looking at the broader issue approach and sourcing various proposals and ideas.” (via Statescoop)
Just as a reference point, Google made more than $30 billion last year and Facebook earned over $22 billion.
At this point, Newsom’s trial balloon is long on flight and short on string. Just how consumers would see any money from the use of their personal data may come out of committee in more detail but Newsom didn’t say when he expects a concrete plan to surface. Attaching a tax of some sort to businesses fundamental to the state’s economy may not be an idea that sticks.
Still, right out of the gate the idea is seeing some support. “While platforms are fast and loose with consumer data, they are not so willing to share what they are doing with the data or how much they are profiting,” said James Steyer, founder of Common Sense Media, a non-profit consumer advocate group. “We fully support the governor’s data dividend proposal and expect to introduce legislation that reflects that in the coming weeks,” he said. (via Bloomberg)
Newsom’s proposal this week isn’t the first word of the idea heard. Last November, Sen. Mark Warner (D-VA) suggested a data dividend law might return 25 percent of the value of an individual’s data back to them. Warner is currently considering federal legislation to compel companies such as Facebook and Google to present consumers with an annual monetary estimate of what their data is worth.
Privacy proponent Alastair MacTaggart, who helped get the California law through, also weighed in on Newsom’s proposal. “We are so pleased that Governor Newsom is at the forefront of leaders recognizing that California consumers are fed up with being presented with no choice about what happens to their data, and forced to stand by and watch it sold to hundreds of companies they’ve never heard of, for uses they’d never approve,” he told the Sacramento Bee.
