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Will data dividends lead to improved privacy levels?

When it comes to data privacy and data protection, the question of data ownership is incredibly important. When a company harvests your data, your likes, habits, desires – and potentially even your ideas – they can be analyzed and exploited to create revenue streams. 

What's more, seemingly disparate data sets can reveal a lot about you, meaning that something trivial could be used to deduce startlingly precise secondary inferences. For example, the car you drive and the music you listen to can reveal what political party you are likely to vote for.

As a result, people's Facebook likes can potentially be leveraged to figure out their race, gender, political preferences, and even their sexual orientation. This is highly sensitive information that is supposed to be private, and whether companies should be allowed to deduce those things using algorithms is highly controversial. 

Data dividends

Talking at Collision conference, Brittany Kaiser stated that "since 2017, data has surpassed oil and gas as the world's most valuable asset". This puts the data economy into perspective and reveals why businesses are so keen to have and control people's data. 

According to Kaiser, the best solution to the world's current data woes is to give people ownership of their data. As a result, they would personally control its dissemination and be able to exert choices about how it is used.

I'm a big fan of blockchain technology specifically for the purpose of smart contracting, and that means when you are producing data or making a data transfer that you can sign a digital contract where you encode who owns that data and how it can actually be governed, can that data be used for certain purposes or not.

If I, as an individual, own a portion of my personal data and the majority of that value is owned by the platform that has paid the money to build it and to run it - for example me using my Facebook account - then I might own 20 or 30 percent of the value of that data and Facebook owns the other 70 or 80 percent. So I could sign a smart contract with Facebook when I'm logging in that says 'OK whenever you're monetizing my data like selling it to advertisers I will receive a data dividend'.


Can you afford to say no?

There is no doubt that the concept of a data dividend is interesting. Many people would probably jump at the chance to be paid for their information. After all, it is hard to argue with Kaiser's assertion that "currently, none of these people have privacy. None of us have privacy, our data is being taken from us by all of the platforms that we use."

Under such circumstances, it is easy to see why the option of being paid for data could be an improvement, but would it lead to increased privacy? 

While being paid for data might seem desirable, we need to consider what could happen if consumers refuse. Would companies continue to harvest it covertly? Unfortunately, unless government regulations made it illegal to capture data outside of the consensual contracts, the answer would probably be yes. Thus, regulations would still be central to ensuring a data dividend system was fair and prevented other forms of data collection.

What's more, data dividends raise concerns over the potential for heightened levels of societal stratification. Paying people for their data could incentivize individuals into providing more data than ever before. As a result, this could lead to a massive increase in data snooping, particularly for those who can't afford to say no. 

Consider the single mum who can't afford her mortgage repayments – or the out-of-work dad who needs to fix his car to get to his next interview. Would those individuals truly have a free choice, or would they simply be forced into selling their data to make ends meet?

Regional imbalances?

Then there are the inevitable questions surrounding how data dividends might affect people in different locations around the world – or in communities worse off than those living ten minutes up the road. Ultimately, it seems highly probable that a data dividend system will create a wealthy elite who can afford their privacy, while systematically discriminating against those who can't.

Kaiser contends that it is better to have choice, and that the opportunity for consumers to pay with their data is a win-win situation:

If we are implementing a data dividend, all we are saying is that we are going to give a small percentage back to the individual of the data that they are already giving away for free anyway. So, we're saying would you like to share data in a consensual manner, where you are giving us permission and know exactly what you are doing and we are telling you what this data is going to be used for and that is a relationship where I am happy to share my data, especially anonymously share my data, if I am going to be able to go to the grocery store and pay for my groceries.

My privacy or yours?

No one denies that Kaiser's optimism for the data dividends system has merits, and there is certainly something to be said for a system where people can opt-out of data collection altogether.

On the other hand, we have to be cognizant of the fact that some data subjects may become marginalized. This is an important point because even Kaiser admits that data harvested from individuals can have an effect not only on their own privacy but also on the privacy of others.

As a result, those who decide to sell their data could negatively affect the privacy of their family, friends, colleagues, or other members of their local community, for example. 

Ultimately, everyone can dream of a world where they can afford their privacy, but as Alex Stamos rightly pointed out, consumers are already choosing to invade their own privacy to get free services. Under such circumstances, there seems to be a real danger that data dividends could cause a massive loss of privacy for huge numbers of people.

Written by: Ray Walsh

Digital privacy expert with 5 years experience testing and reviewing VPNs. He's been quoted in The Express, The Times, The Washington Post, The Register, CNET & many more. 


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