The economics of personal data on the Internet

I was reading an article on The Economist:

Should internet firms pay for the data users currently give away?

It is an analysis of a paper “Should We Treat Data as Labor? Moving Beyond ‘Free'”
(although the article never mentions where it’s from).

While I have not read the original paper yet, here are my thoughts on the subject, that I actually even posted as comment on the article. Note that this is a reply from somebody saying that we are being paid for this data already because we are getting things for free that in the past we used to pay for (like GPS).

I completely agree that we are already implicitly paying for those services by providing our data. And that should be highlighted in the paper (it might be, but there were no references to the actual paper in the article).

I think the component that would make things more interesting is if we can make that explicit and then allow people to opt out of it (and then have to pay for the service). Interesting, but I don’t think it would be helpful at the end of the day. Data gathering from users is unbalanced. Some users give a lot of data because they use the service a lot, or have a device that is always collecting the data. And some users don’t give much data at all and don’t have the opportunity to do so. That means that the internet will become more expensive for some users, which might end up not being able to afford access and all the negative things that that entails.

I think that are many other dimensions that might be more interesting to investigate in a legal spectrum (some of them technically challenging): data portability (whatever I give to Google, I can ask them to export to GoogleNext so that they can be competitive and provide me personalized information), data sharing visibility (who gets that data and what are people outside the company allowed to query on), and data security (guarantees on what is available on a person’s raw data). That would help foster more competition while keeping data collected transparent and safe and that’s better than trying to just go the route of adding more complexity to our interactions with the internet.

Economics is hard and I don’t really have enough background to say really that the recommendation from the article is a bad one, but it feels like we are really attacking the problem the wrong direction.

At some point in the past I was asked to join a team that was handling ads on the Amazon website. My first reaction was that I was fundamentally opposed to the concept because we are muddling the relationship with customers by effectively giving something that we own from the customer (their page view) and giving a piece of it to a different company to profit from. But the reasoning was that this allowed Amazon to monetize those page views more effectively which, in turn, would allow for lower prices on the Amazon website.

That made me think about whether you can get the same effective result without the feeling that we are cheating customers to show them not something that they have asked for (and unbiased view that only contains the things that they are searching/browsing on the website). And I wasn’t able to really come up with anything better.

No, I didn’t end up going to the ads team. I decided to join a different initiative within Kindle and my path never crossed again with an opportunity doing ads, so I didn’t have to think about it anymore. Correct monetization of things is very complex, so we have sometimes to accept sub-optimal experiences in order for things to move on and, in aggregate, for you to have a better experience.

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