Your Data Points Are Each Worth $.001

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Placed Insights’ data points offers. Image courtesy Crosscut.

Imagine a world in which you are paid for data about your or that you create, or at least compensated in some tangible way, beyond free access to content, a la Facebook and Twitter. A Seattle company has taken a step in this direction. Placed Insights, according to a note in Crosscut, has developed a smartphone app that tracks your shopping habits in exchange for points that you can trade for goods and money, indirectly. Earn enough points, and you could get an Amazon gift card, win a prize, and yes, actual cash. A screenshot in the Crosscut story shows an option to trade 5,000 Placed Insight points for $5 “cash” via PayPal. (Placed Insights uses the data to give retailers insight about customer behavior.)

Most of the discussion about data collection focuses on privacy, that is, whether or not corporations or governments can protect data from other people or agencies that shouldn’t see it. While privacy is important, that horse has left the barn; the recent revelations about the NSA’s spying program show that governments and major corporations can’t be trusted to protect privacy if there’s something to gain. I think we should turn our attention away from protecting privacy to realizing the intrinsic value of the data and creating a market that fairly compensates the original owner and creator of the data–you–for sharing it. Many people much smarter than myself, computer scientist Jaron Lanier among them, have already suggested this.

Placed Insights’ program implies that each of the user’s data points has a knowable value, though the exact amount of that value is unclear. Is a “point” equivalent to each click of a mouse, for example? Does the exchange of $5 for 5,000 points mean that each data point is equivalent to $.001? (That’s 1/1000th of a cent.) How did the company arrive at this valuation? Certainly not in an open marketplace. Still, it’s a public acknowledgement that each piece of data has a monetary value, something that Big Data collectors rarely discuss.

What if an open marketplace similar to a commodities exchange allowed buyers to bid for each type of data point (personal data, buying behavior, and so on)? What if the dollar value of each data point became a “nano-payment,” and each time you provided that data point, that value was deposited into a personal data payment account, and amounts in the account could be exchanged for goods, services, or cash? Given the volume of data each of us generates on a daily basis, the accounts could grow fairly quickly. Companies would know the intrinsic value of the data, which would give them an incentive to protect it, and perhaps go a long ways to solving the bugaboo of privacy.

NSA: Stop Stealing My Property

Editorial cartoon

Image courtesy intoon.com

If we owned every click, email, instant message, video, tweet, photo, or text we send, we’d probably call the NSA’s interception of email traffic reported in today’s Guardian what it is: theft. This isn’t some flaky idea from a deranged conspiracy theorist. The World Economic Forum has called personal data “a new asset class” in the same league as real estate, stocks, bonds, and good old cash. “Personal data is the new oil of the Internet and the personal currency of the digital world,” says Meglena Kuneva, European Consumer Commissioner in a 2011 report published by the WEF. If our own personal data is like an oil well, we should sue the federal government for unlawful confiscation of property.

Most of the reaction to the revelations about the NSA plan have focused on improving laws on data privacy or “empowering” consumers to take more control of their data. This week, Julie Brill, a member of the Federal Trade Commission, called for the creation of a program she called “Reclaim Your Name,” a phrase the New York Times termed “handy.” The program would encourage consumers to demand access to their own information held by data-warehousing firms. But no amount of cute sloganeering will curb abuses of personal data if governments and corporations view the data as their property, rather than the property of the person who produced the data — you and me. If the NSA had purchased or licensed the data from us, they would have a greater incentive to treat it with more care, or risk a lawsuit or a criminal investigation.

President George W. Bush once called for an “ownership society” that would promote personal responsibility and economic liberty. If we believed we owned the data we produce, we’d be outraged at how the government and corporations treats it. We’d demand financial compensation for its abuse. The WEF report (p. 10) has a suggestion: “In practical terms, a person’s data would be equivalent to their ‘money.’ It would reside in an account where it would be controlled, managed, exchanged and accounted for just like personal banking services operate today.” Scientist Jaron Lanier has suggested a different methodology based on the same principle: that each person owns information about himself and that revealing that information requires compensation.

If you are a lawyer, tell me how I can claim property rights for my data. Comment below.

Pay Me For My Data

PBS NewsHour had a fascinating interview last night with Jaron Lanier, a respected thinker on digital culture and the author of “Who Owns the Future?” He’s worried about the long-term detrimental effects on society and the economy of “free,” that is, our usually unconscious decision to give away our personal data in exchange for so-called “free” services, such as Facebook and Twitter. (And as it happens, WordPress blogs are free, though I bought the premium version for $99.) In essence, he believes we are unwittingly enriching the owners of the digital means of production (big data, server farms, and Wall Street) at our own expense. In other words, you and I are de-valuing ourselves by giving away our names, birth dates, places of residence, and innumerable clicks to people in large corporations or governments who don’t know us and don’t care about us. And when these organizations get our data for free, they will treat the data with the care it deserves, which is no care at all. Witness the current NSA data-collection debacle.

Lanier draws on ideas going back to the 1960s. Every time data is provided–either actively or passively–the provider of the data should be compensated with money. Watch the video for his great real world example related to personal privacy. We know that data has economic value, so why not pay the owner? I would never give away my labor all day every day and expect to survive. My work is too valuable. My data should be treated the same way by those who benefit by it.

The obvious rebuttal to his argument is the barter arrangement. Facebook and Twitter are trading access for our data, though the exchange rate and the relative value is impossible to determine. Are we getting our “barter’s” worth? And can you apply the barter argument to governments’ collection of meta-data so we can be safer? Is the safety I’m gaining equal to the value of my data? Without a marketplace to resolve this, we can’t know the answer.

What do you think? What is your click-through rate?