Consumers should know how much their data is worth

US Senators Mark R. Warner (Democrats) and Josh Hawley (Republicans) want to know from Facebook, Google and Co. exactly how much the data of their users, measured in dollars and cents, is worth to them.

Last Sunday, the two senators announced their intention for the first time in a US talk show: Every three months, each user is to receive an overview of which data has been collected and stored and how the respective provider rates it. In addition, the aggregated value of all user data is to be reported annually to the US Securities and Exchange Commission. In this report, the companies are to disclose how they store, process and protect data and how and with which partner companies they generate sales with the data. All companies with more than 100 million users per month will be affected.

The value of user data has risen enormously in recent years; so far, companies have protected their internal calculations as company secrets. In addition, there is no recognized method for quantifying the value of user data; only when a company is sold or valued by means of an initial public offering (IPO) does it become obvious. In the case of the WhatsApp takeover it was  $ 55 per user, in the case of Skype it was $ 200.

But one can doubt the significance of these figures. A further indication can be the advertising revenues, which are disclosed by companies per quarter. At the end of 2018, Facebook earned around $6 per user worldwide, while Amazon earned $752 per user. These figures are likely to rise in the future.  “For years, social media companies have told consumers that their products are free to the user. But that’s not true – you are paying with your data instead of your wallet,” said Senator Warner. “But the overall lack of transparency and disclosure in this market have made it impossible for users to know what they’re giving up, who else their data is being shared with, or what it’s worth to the platform. […]” Experts believe it is important for consumers to know the value of their data, because only when you know the value of a good you are able to value it.

On Monday, Warner and Rawley plan to introduce the  Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data (DASHBOARD) Act to the parliament for its first reading. It remains to be seen whether their plans will meet with the approval of the other senators.