Profit-Sharing and Data Collection

California Gov. Gavin Newsom wants consumers to benefit from the billions of dollars technology companies in the state made by forcing those companies to share their profits. According to a report in Fortune citing comments from the governor’s February 12 State of the State speech, Newsom talked up the idea of a so-called digital dividend that would enable the consumers in the state to access some of the profits these tech companies make off of them.
 
While the governor said he was proud that California is home to so many technology firms, he also said that the companies making billions in profits “collecting, curating, and monetizing our personal data have a duty to protect it. Consumers have a right to know and control how their data is being used.”
 
According to Fortune, he went on to make a remark about having tech firms share in the profits. “California’s consumers should also be able to share in the wealth that is created from their data,” he said. “And so I’ve asked my team to develop a proposal for a new data dividend for Californians, because we recognize that data has value and it belongs to you.”
 
While Newsom didn’t provide details about what the digital dividend would look like, he predicted the state could do something “bold,” noting that California’s new data privacy law, which is seen as among the strictest in the country, goes into effect in 2020. The comment from Newsom was praised by privacy advocacy groups, which at the same time called on tech companies to provide full transparency about how data is handled and how valuable it is for the technology companies that control it. 
 
James Steyer, Founder of Common Sense Media, the group that was credited with getting the California Consumer Privacy Act created and passed last year, told Fortune that the tech companies are still acting irresponsibly with consumer data and aren’t willing to share what they are doing with it and how much money they are making from it. “We fully support the governor’s data dividend proposal and expect to introduce legislation that reflects that in the coming weeks,” Steyer said in the report.
 
However, in a statement to Loyalty360, Daniel Kahan, Consultant for W. Capra Consulting Group expressed reservations. “While the protection of consumer data is a commendable cause,” he said, “the introduction of consumer profit-sharing may run counter to the regulations introduced in CCPA. While CCPA aims to protect the personal information of California residents regardless of where it may be collected, sold, or used (whether inside or outside of California), the fact remains that Cali-based tech companies utilize data from consumers worldwide. The assumption that California residents should capitalize on the collection and use of personal information from non-California residents, just because that data is collected in their state, seems to stray from a position of pure-play data protection.”
 
To put the tension surrounding the issue into perspective, Google ended 2018 with profits of more than $30 billion and Facebook was able to rake in more than $22 billion using consumer data. How the issue will sort out remains to be seen, but voices on either side are very strong right now.
 

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