California Thinks You Should Be Paid for the Data That Companies Collect from You

Gavin Newsom Credit: Jdlasica / Flickr
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If you use the internet at all, there’s undoubtedly at least one company making money off of your data. Every thing you do online is likely making some company money. Shouldn’t you get paid for it?

That’s the concept behind the so-called data dividend. Essentially, it’s the idea that users should be paid a share of the money companies make by harvesting and using their personal data.

Even though it’s been touted by economists and academics for a few years, it’s still a rather obscure idea. But it got a big boost this month by newly elected California Governor Gavin Newsom.

“California’s consumers should … be able to share in the wealth that is created from their data. And so I’ve asked my team to develop a proposal for a new data dividend for Californians, because we recognize that your data has value and it belongs to you,” Gov. Newsom said at the annual State of the State speech on Feb. 12 (via CNN).

It isn’t an altogether far-fetched idea. Alaska already does something similar. The state regularly gives every man, woman and child in Alaska a share of the state’s oil-royalties fund dividend.

As far as how a data dividend in California could be set up, there are a few possibilities, according to CNN.

The state could set up a “data wage,” which would pay Californians based on the amount of data they contribute to firms. Another possibility is universal data income, which would take money from companies collecting and monetizing data and store it in a public fund. Each year, Californians would get a public payout from it.

If California does set up a data dividend, the amount of money that each Californian could receive would vary. It may start small, from $50 to $100 a year person. But experts say it could grow up to $5,000 a year.

Although you may think that most of that money is coming from Facebook or Google, a majority of it may come from non-tech companies — such as firms in the healthcare, insurance or retail spheres.

Of course, a data dividend is likely still way off, mostly because of the complexity of the matter. But Newsom’s comments this month is a big step forward for the once-fringe idea.

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