Tag Archives: property rights

Should we Put a Price Tag on Our Personal Data?

Recently, there has been plenty of debate swirling around as society tries to define what an individual is entitled to in their use of the internet.  Net neutrality has been the king of this debate – as cable companies explore methods to maximize their monetization of the web, others have fought back to keep the internet deregulated, and President Obama has gone as far as to claim that access to the internet is a public good, and “that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business,” as written in QZ.  It is only a matter of time before we see new issues concerning the regulation of the internet pop up, and one of those issues that is quickly gaining traction is the question of whether or not an individual has claim to their browsing data.

Earlier this month, Michael Dell was quoted in Inc. as asking “How much of [the] data that companies or organizations store is actually being used to create better outcomes or better decisions or better results or better anything–particularly in real time?” he asked. “The dirty secret is, almost none of it. Well, that’s a huge opportunity, and an area that’s hugely interesting to our customers”.  He’s not alone as one of the major proponents of big data collection, a field that has grown exponentially with the widespread adoption of technologies such as smartphones and services like Facebook and Google.  But while Dell is probably right about the oncoming big data revolution, he’s somewhat downplaying the fact that companies have already figured out ways to put the data they collect from users to use – the biggest of which is providing targeted ads to users based on their browsing data.  A phrase that I’m rather fond of is that if you’re not paying for a service then you are the product – meaning that free services are able to remain, well, free, because they collect user browsing data, package it, and sell it in bulk to advertisers.  Michael Wells, writing for 3 Quarks Daily, believes that individuals should have some say in the matter.

Wells argues that there is a market failure at play with regards to advertising and user data.  He claims that the right to advertise to an individual is improperly priced due to a lack of property rights over one’s attention and personal data, and that the resulting underpricing of advertising rights is leading to an glut of advertisements where they shouldn’t be.  While I respect Wells’ analysis and agree with some of his ideas, such as the concept that there should be some regulation of the most intrusive forms of advertising, his analysis of the pricing of advertising is missing a key element.  He writes that the only cost of advertising is the cost of obtaining user data, which may be true, but I think he is underestimating that cost.  It is not so easy to pry someone’s attention away from them or to get them to commit to registering for a service – just ask any of the hundreds of startups and apps that have folded over after failing to capture a large enough user base.  The real cost of getting a valuable supply of user data is providing a service that can not only attract enough users but that can keep them committed – and that is something that often requires would-be entrepreneurs to provide their service for free.  That is exemplified by some of the biggest players in the personal data collection market: Google, Facebook, Instagram, and Snapchat.  All massive companies with massive expenses, but which remain free because that’s what it takes.  And so I don’t think the market is quite ready for users to start fighting for rights to their intellectual data.  Free access to a variety of apps and services is payment enough for our data.