What is our personal data worth? And who has the right to that value?
The debate on personal data value has been bumbling along for years now, with many businesses making enormous profits from monetising data sets on their… Read more
The debate on personal data value has been bumbling along for years now, with many businesses making enormous profits from monetising data sets on their customers. The news has now caught up with legislators but is the state just trying to get in on the action?
For individuals, the real question is what is their data worth to them? Data aggregators will say not very much – it’s the value of big data sets that lead to demographic targeting on a mass scale where the value is found. And other businesses will say the value is represented in the free services they use online.
The state has realised, however, that there’s a role for them to play on behalf of citizens as a whole and a potential new tax income to fund public services.
In the EU, a long-running debate on whether data should be treated like money is drawing to a close. The theory, in the Digital Content Directive, is that consideration for a service based on an exchange of personal data instead of cash would result in the same or similar consumer protections offered to those paying for digital services with money. This builds on the distinction of digital goods and services from non-digital goods and services as introduced via EU law into the UK in the Consumer Rights Act 2015. While this wouldn’t have resulted in any conclusion on what, for example, my e-mail address would equate to in sterling, it does move us closer to seeing data as a type of currency (readers will note that I’m not discussing cryptocurrencies on purpose, which we can perhaps consider next time).
In normal EU fashion, the Digital Content Directive proposals resulted in intense lobbying in Brussels and various rounds of debate. Three years later that process is coming to an end and whilst it is unlikely that the UK will now need to adopt the Digital Content Directive (unless Brexit doesn’t happen, of course) the Government has made it clear that it intends to secure close co-operation on consumer law issues: we shouldn’t therefore be surprised to see mirror image alignment in place of direct application.
This is one example of needing to iron out the creases on Brexit transition. For example, there are interesting overlaps with the European Electronic Communications Code (“EECC”) which the UK will adopt. It’s yet to be seen how consumer protection measures in the EECC for digital communication services (i.e, Whatsapp) or bundles of digital content with communications services (i.e, Netflix “binge” on mobile data packages) will be regulated alongside potential overlapping regulation from the Digital Content Directive or a UK equivalent. And as we’ve seen with the parallel proposals in the Sale of Goods Directive, maximum harmonisation attempts by the European Commission can in fact result in a diminution of consumer protection laws in the UK.
In the UK, the Government has been reluctant to agree with the European Commission on its plans to elevate the status of data to money as a form of consideration. But it has thrown itself behind a new digital services taxes to try and increase the amount of tax paid by many global digital platforms, including in respect of monetised data.
In the recent budget, the Chancellor announced this new tax noting that multilateral negotiations via the OECD/G20 had been too slow, and that the UK was therefore going to go it alone.
The EU was due to follow the UK, however, with European Commission proposals for a digital services tax to be voted on at a recent meeting of EU finance ministers. But key Member States (namely Denmark) decided to push back, resulting in a new Franco-German alternative being put forward. The new proposal – now different to UK policy – focuses only on revenue generated from targeted advertising (albeit still at the 3% rate). It seems, for now, that taxation from the EU on sales of data and certain data services, as well as other non-advertising revenues generated from the use of personal data on digital platforms, has been pushed into the long grass.
So we’re moving a few steps along the journey of data value for the data subject – whether directly or on citizens behalf by Governments. Personally, I’m still hopeful that we’ll get to a position where individuals can control their personal data sharing in the same was as they do with their money using their banking app – deciding what categories of data to share with who and for how much. However, given it’s taken years to get this far, and with Brexit on our to-do list, this isn’t likely to happen anytime soon.
Darren Jones is the Member of Parliament for Bristol North West and a member of the Science and Technology and EU Scrutiny Select Committees. He co-chairs the Parliamentary Information, Communications and Technology Forum and the Parliamentary Commission on Technology Ethics. Darren is also a legal consultant in the commercial technology team at Kemp Little.