This will be a crucial issue for a free society going forward…giving away your data is like giving away your labor.

Want Our Personal Data? Pay for It

The posting, tagging and uploading that we do online may be fun, but it’s labor too, and we should be compensated for it

By Eric A. Posner and Glen Weyl

WSJ, April 20, 2018 11:19 a.m. ET

Congress has stepped up talk of new privacy regulations in the wake of the scandal involving Cambridge Analytica, which improperly gained access to the data of as many as 87 million Facebook users. Even Facebook chief executive Mark Zuckerberg testified that he thought new federal rules were “inevitable.” But to understand what regulation is appropriate, we need to understand the source of the problem: the absence of a real market in data, with true property rights for data creators. Once that market is in place, implementing privacy protections will be easy.

We often think of ourselves as consumers of Facebook, Google, Instagram and other internet services. In reality, we are also their suppliers—or more accurately, their workers. When we post and label photos on Facebook or Instagram, use Google maps while driving, chat in multiple languages on Skype or upload videos to YouTube, we are generating data about human behavior that the companies then feed into machine-learning programs.

These programs use our personal data to learn patterns that allow them to imitate human behavior and understanding. With that information, computers can recognize images, translate languages, help viewers choose among shows and offer the speediest route to the mall. Companies such as Facebook, Google, and Microsoft (where one of us works) sell these tools to other companies. They also use our data to match advertisers with consumers.

Defenders of the current system often say that we don’t give away our personal data for free. Rather, we’re paid in the form of the services that we receive. But this exchange is bad for users, bad for society and probably not ideal even for the tech companies. In a real market, consumers would have far more power over the exchange: Here’s my data. What are you willing to pay for it?

An internet user today probably would earn only a few hundred dollars a year if companies paid for data. But that amount could grow substantially in the coming years. If the economic reach of AI systems continues to expand—into drafting legal contracts, diagnosing diseases, performing surgery, making investments, driving trucks, managing businesses—they will need vast amounts of data to function.

And if these systems displace human jobs, people will have plenty of time to supply that data. Tech executives fearful that AI will cause mass unemployment have advocated a universal basic income funded by increased taxes. But the pressure for such policies would abate if users were simply compensated for their data.

The data currently compiled by Facebook and other companies is of pretty low quality. That’s why Facebook has an additional army of paid workers who are given dedicated tasks, such as labeling photos, to fill in the gaps left by users. If Facebook paid users for their work, it could offer pay tied to the value of the user’s contribution—offering more, for example, for useful translations of the latest Chinese slang into English than for yet another video labeled “cat.”

So why doesn’t Facebook already offer wages to users? For one, obviously, it would cost a lot to pay users for the data that the company currently gets for free. And then Google and others might start paying as well. Competition for users would improve the quality of data but eat away at the tech companies’ bottom line.

It’s also true that users simply aren’t thinking this way. But that can change. The basic idea is straightforward enough: When we supply our personal data to Facebook, Google or other companies, it is a form of labor, and we should be compensated for it. It may be enjoyable work, but it’s work just the same.

If companies reject this model of “data as labor,” market pressure could be used to persuade them. Rather than sign up directly with, say, Facebook, people would sign up with a data agent. (Such services, sometimes referred to as personal data exchanges or vaults, are already in development, with more than a dozen startups vying to fill this role.) The data agent would then offer Facebook access to its members and negotiate wages and terms of use on their behalf. Users would get to Facebook through the agent’s platform. If at any time Facebook refused reasonable wages, the data agent could coordinate a strike or a boycott. Unlike individual users, the data agent could employ lawyers to review terms and conditions and ensure that those terms are being upheld.

With multiple data agents competing for users’ business, no one could become an abusive monopolist. The agent’s sole purpose would be managing workers’ data in their interests—and if there were a problem, users could move their data to another service without having to give up on their social network.

Companies such as Apple and Amazon also could get into the act. Currently, their business models are very different from those of Facebook and Google. For the most part, their focus is on selling products and services, rather than offering them without charge. If Facebook and Google refuse to pay users for their data, these other companies are big and sophisticated enough to pay for data instead.

Would the “data as labor” model put the tech giants out of business? Hardly. Their vast profits already reflect their monopoly power. Their margins would certainly be tighter under this new regime, but the wider economy would likely grow through greater productivity and a fairer distribution of income. The big companies would take a smaller share of a larger pie, but their business model would be far more sustainable, politically and socially. More important, they would have to focus on the value that their core services bring to consumers, rather than on exploiting their monopoly in user data.

As for Congress, it could help by making it simpler for individuals to have clear property rights in their own data, rights that can’t be permanently signed away by accepting a company’s confusing terms and conditions. The European Union has already taken steps in this direction, and its new regulations—which require data to be easily portable—are a leading stimulus for the rise of data agent startups. Government can also help by updating labor law to be more consistent with modern data work while protecting data workers from exploitation.

Most of us already take great satisfaction in using social media to connect with our friends and family. Imagine how much happier and prouder we would be if we received fair pay for the valuable work we perform in doing that?

Prof. Posner teaches at the University of Chicago Law School. Dr. Weyl teaches at Yale University and is a principal researcher at Microsoft (whose views he in no way represents here). Their new book is “Radical Markets: Uprooting Capitalism and Democracy for a Just Society,” which will be published on May 8 by Princeton University Press.

https://www.wsj.com/articles/want-our-personal-data-pay-for-it-1524237577 (Paywall)