Skip to main content

Should Big Tech pay you for your data? It’s possible, but also problematic

Data is apparently the new oil, and unlike the nonrenewable petroleum liquid we unearth with giant drilling rigs, it’s an unlimited resource that can be extracted in seconds. So why do we give it away for free?

To find an answer, you have to look back to the early days of the internet.

Decades ago, tech giants and the people who signed up for their services shook hands on a tacit pact. In exchange for access to their apps for free, companies like Facebook and Google would reserve a portion of our screens for advertisements. At the time, it seemed like a fair deal. After all, we were already used to ads on other content channels such as newspapers and televisions.

While years later the premise remains the same, that agreement’s boundaries have expanded in unimaginable ways at the cost of people’s privacy. Tech platforms have built empires by siphoning heaps of data from our internet (and real-life) activities to predict behaviors, by selling it (often covertly) to third-party brokers, and by leveraging that data to gain insights that other tech companies simply don’t have. Whether you’ve tapped on a button or relocated to a new home, chances are these internet giants know about it.

Hard drives within Facebook’s Luleå data center in Sweden

This business model turned out to be outrageously profitable. In 2007, Facebook made about $150 million. Last year, it earned over $85 billion.

These companies wouldn’t be as profitable as they are if they relied on private subscriptions instead of ads because, with a surplus of data, they can target way more people, extract invaluable insights out of it, and enable endless targeted campaigns, says Dr. Murat Kantarcioglu, a computer science professor and director of the Data Security and Privacy Lab at the University of Texas at Dallas.

“An ad-free version will kill their services,” he added.

A new paradigm: Paying you for your data

So, if our personal information is such an indispensable cog in these multibillion-dollar businesses and the web itself, should we be getting a piece of the pie? A legion of emerging startups believe so, and they want to balance that increasingly uneven trade by paying you for your data.

Most recently, Datacy, a Delaware-based company, raised $2.4 million to help you “make your data earn for you.” Its browser add-on tracks you and collects anonymous data on which websites you visited and what kind of computer you are on, as well as information you may choose to link to from third-party platforms like Facebook.

Datacy puts your data up for sale, alongside other users, and depending on how much buyers bid on it, it deposits a monetary amount in your account. It usually ranges from $5 to $10.

Paroma Indilo, Datacy’s CEO, says if businesses have the option to acquire high-quality data directly from people, they won’t have to rely on shady and intrusive tracking practices. Arming users with controls over what and how much of their data is being processed and in whose hands it’s ending up in will foster a healthier and more transparent market, she added in a conversation with Digital Trends.

“That [healthy data market] can only happen when the relationship between buyers and sellers is more transactional,” Indilo told Digital Trends, “where both parties benefit proportionately and have an informed choice in deciding what to sell, to whom, for what purpose, and for what price.”

Datacy isn’t alone. Several data-monetization apps have cropped up over the years, although most of them haven’t quite been able to capture mass appeal.

Killi, a publicly traded Canadian firm, is one of the more successful ones. It works across mobile and the web, and it allows you to sell a wider range of your information, including your browsing habits, online shopping history, and location. Based on how regularly and how much you’re willing to auction data off, you earn points that you can later swap for vouchers like Amazon gift cards.

So far, Killi hosts more than 100 million accounts — although it’s unclear how many of them are actively trading their data — and claims it’s adding at least a million new ones every week. It also told Digital Trends it has clients in leading companies such as Microsoft and HP that are looking for first-party data.

Microsoft and HP didn’t respond to requests for comment from Digital Trends.

Neil Sweeney, Killi’s CEO, calls the data market a “black box of human arbitrage” and says the company wants to change that by letting people decide what they want to do with their information online.

The idea of selling your data, something which you are already giving away for free, sounds like a bargain many internet users have been waiting for. But there’s a reason why data-monetization apps have struggled to go viral.

A confounding problem

Data’s value lies at scale. Ad platforms, as well as machine learning algorithms, rely on information from billions of data points for effective yields. But these data-monetization apps don’t have that volume to entice data buyers, and if they don’t have enough buyers, they won’t be able to shell out more than a few bucks to users. When Facebook, for instance, began actively tracking its users, it already had millions of profiles.

data center google
Google Data Center Google

But what if Facebook and Google were forced to cough up a data tax by law? A few states and politicians such as Andrew Yang have proposed doing just that. The bottleneck here, however, is that such initiatives will be a nightmare to implement because it’s close to impossible to put a price on an individual’s data. There are dozens of factors that could influence the compensation, and if left up to unregulated tech giants, they can manipulate their models to come up with the lowest figures.

Kantarcioglu feels that as long as there are safeguards to prevent misuse, there’s merit in services like Datacy since they will help shed a light on what is the market value of a person’s data. “It will be an interesting data point for us to understand the value of the data, how we could price it, how we could understand the value creation,” he told Digital Trends.

A digital privacy divide

Irrespective of the value, advocates believe personal data monetization could worsen user privacy and undermine its future as a fundamental right. It can potentially commoditize data and turn it into a product, which ultimately will allow tech companies to exploit it however they wish to by paying just a paltry fraction of their revenues each year.

More importantly, such initiatives couple potentially spawn an environment of pay-for-privacy models that could put vulnerable groups at a disadvantage, says Stacy-Ann Elvy, a law professor at the University of California, Davis School of Law. It will lead to a digital divide between people who can afford to protect their information by opting out of the data tax and those who will have to trade their data to retain free access to services, she added.

What we urgently need today, Elvy says, are movements like the California Consumer Privacy Act that could help consumers better understand their privacy rights and make it easier for them to exercise them. “Whether consumers will trust entities associated with such movements to act on their behalf or in their best interest remains to be seen,” she said.

Editors' Recommendations

Shubham Agarwal
Shubham Agarwal is a freelance technology journalist from Ahmedabad, India. His work has previously appeared in Firstpost…
It’s official — Motorola’s next Razr is the 2023 phone I can’t wait for
Motorola Razr 40 Ultra rear side.

Motorola keeps churning out phones across all price brackets, from flagships in the Edge series to clamshell foldables in the Razr lineup. But barely any have managed to stand out against established rivals like Samsung.

In 2023, that just might change with the upcoming Razr 40 Ultra/Razr Ultra, a flip folding phone that looks astonishingly good, functionally ahead of the competition, and with impressive hardware inside. This phone looks like Motorola finally decided to go all out and give the best foldable that it can.

Read more
Apple Watch Series 8 just got a rare discount at Amazon
An Apple Watch Series 8 with the screen turned on.

A popular choice among people seeking out smartwatch deals, the Apple Watch Series 8 is enjoying a great discount at Amazon right now. Usually priced at $399, you can snap it up for $329 working out at 18% off the regular price. The $70 soon adds up and we can't see it staying this price for very long. If you're looking to be more active or simply use your phone less, you'll love the Apple Watch Series 8. Here's what you need to know about it.

Why you should buy the Apple Watch Series 8
One of the best smartwatches you can buy right now, the Apple Watch Series 8 is the ideal wearable for iPhone owners. It's particularly ideal if you're active or planning on being more active. It can track pretty much any workout imaginable with extensive stats on your pace when running, the steps you take, calories you burn, and much more. Thanks to Apple's Activity Rings system, it's addictive with badges to collect and challenges to complete, all based around you being more active. You can even swim while wearing it thanks to IP6X-certification that also means it's dust-resistant.

Read more
Is this cheap foldable finally a good Samsung Galaxy Z Fold 4 alternative?
A person opening the Honor Magic Vs.

I’ve had a turbulent time with the Honor Magic Vs. It started out well when I first tried the phone in late 2022, but the early appeal waned when I got to grips with the software — and things soured even more when I tried the camera for our full review. Now, Honor has revealed the final price for the Magic Vs, and it’s substantially less than the Samsung Galaxy Z Fold 4, its closest rival.

It means that I need to tackle the Honor Magic Vs again to see if software updates have improved it, and if not, whether the lower price means its shortcomings are more easily forgiven.
Bringing the Magic back

Read more