Data - ownership, dividend and taxation

There is a need to go slow on the "data dividend" idea!

Andrew Yang’s “Data Dividend Project” has not seen much discussion and yet the idea needs to be unpacked with more finesse. The one concern I have is that considering the poor knowledge and awareness of the context of one’s own data, creating a market around it possibly leads to chaos. The simple phrasing of the idea is that given one’s data is anyway being consumed and processed by Big Tech (FAANG) the ability to monetize and earn makes it somewhat tolerable.

I would say that it does not. And while it is termed a “dividend” it is really a tax. Thus it considers data as a form of property with usage and exchange values, fair market rates and everything else. A system which taxes companies (because make no mistake - this “dividend” is really a form of “tax”) an infinitesmal amount of their revenues in order to seek and receive consent for data processing does no good in terms of improving the dire situation around the notion of consent and digital data analytics. In fact, this system creates an enormous incentive to continue doing what is being done at present and perhaps with a more voracious appetite.

Current regulations have a long way in catching up with the various means and forms of data extraction, analysis and processing. And the complex nature of litigation around the topic means that there is going to be a backlog punctuated with a few marquee cases and announcements of fines. The way forward is not the despairing “then at least let me profit from this” approach which is implied in the Data Dividend Project. The key is to understand that the single unit of personal data which will now be considered as property is useless. Value is extracted from data at volume and data which is correlated. In that perspective, the outcome of the Data Dividend Project could be in shifting the mindset of just enough number of individuals who collectively present a valuable data set which can be bought piecemeal through a consent mechanism.

Calls to “own,” “sell,” or “monetize” your data are effectively advocating for a legal framework grounded in property rights. But such a framework would emphasize individual commercial interests above all else. While monetization may have a limited role to play, it is not a scalable or comprehensive solution, and it is definitely not a panacea. In particular, what becomes of consumer protection, personal dignity, and civil and human rights when data ownership is the basis of all exchange? Privacy becomes a luxury good, only to be enjoyed by those who can afford it.

(from You Really Don’t Want to Sell Your Data)

Instead of the outright “sale” of data into an exchange a different perspective would be to view one’s data as limited by time and purpose. And more importantly, considering it as a right. In that perspective the concepts of ownership, values and rights change considerably and we do have established legal frameworks which guarantee various degrees of protection from data scavenging. The Data Dividend Project and similar echo to the concept of “technocracy” and democratic alternatives being created to provide better rights to citizens.

How could digital technologies help redesign core political institutions, including representative democracy and its bureaucratic apparatus, and make them more decentralized and participatory? Proponents of this view imagine citizens not as sophisticated and emancipated consumers - merely to be served by more ethical digital capitalists of the future - but, rather, as active, political and, occasionally, entrepreneurial subjects.

Unsurprisingly enough a sub-context of this debate on data ownership and governance of personal data also resonates within the topic of identity. The evolution of identity ecosystems have ensured that the “social login” economy is where the individual’s context mapped data is now locked up. Any effort to unshackle the social identity towards a measure of self-governed identity has to contend with the need to create tools and utilities which allow individuals to exercise their rights and acquire the ability to govern, share and manage the elements of identity. A number of Self-Sovereign Identity (SSI) initiatives seemingly gloss over this gap and focus more on the perceived benefits of self-governance. Those do exist. But the value proposition is not unlocked unless they are integrated into solutions being consumed as part of day-to-day.

Peculiarly enough the COVID-19 pandemic has thrown up a spectrum of technology intervention response the most interesting of which are the ones being put together across EU, Canada and parts of US. These work with the W3C standard of Verifiable Credentials (VCs) and allow citizens to engage in sharing of status of COVID-19 tests in ways that are privacy preserving. Along with sharing of data for access to services, the VC based approach allows the citizen to verify the verifiers too - thus creating a loop of trust where electronic data exchange around consent based mechanisms allow a “return to normal” in a “safe way”. It remains to be seen how quickly the adoption of uses from a pandemic translate over into other domains and service flows which we are familiar with.