Why you should care
Because if someone is going to make money by selling your personal information, it may as well be you.
The NSA has gotten a bad rep for scooping up people’s information, but they are not the only ones. Our personal information is highly valued, and online data brokers are making millions by gathering and sharing our search history, buying habits and marriage status with advertisers and marketers. But now we can take control of this process by selling our personal data ourselves.
That’s what a new generation of platforms like Datacoup, Handshake and Meeco make possible. All three are personal data marketplaces set to launch this summer, and their goal is to cut out the data-mining middleman by allowing users to share their personal information with companies — and get paid for it.
The way we see it, your data belongs to you. So if someone should be making a profit on it, it should be you.
Each offers a slightly different service based on the notion that people should benefit from the value of their information. “The way we see it, your data belongs to you. So if someone should be making a profit on it, it should be you,” says Paul Davis, CEO of U.K.-based service Handshake, which launches in August.
These newcomers are going after a multimillion-dollar industry, and social media sites are just the tip of the iceberg. The main players are the powerful but largely unknown data brokers that collect, analyze and sell the personal information of millions, often without people knowing.
For decades, firms like Axciom, Epsilon and Experian (the data market division of the credit reporting service) have been operating under the radar, but a shift in awareness might be underway. “I think people are just starting to realize that these large companies are acting as silos and that making ‘us’ the product is a form of digital feudalism,” says Katryna Dow, CEO of the Australian service Meeco, due to go public this month.
Selling your own data allows Internet users to reap different rewards, depending on the platform. With Datacoup, for example, you receive a set rate each month, depending on the amount of information shared, while Handshake allows you to negotiate a price. Meeco, meanwhile, pays with special offers from brands that users show interest in, rather than cash.
Their data-gathering systems vary significantly, but they all use simple interfaces that don’t require downloads and anonymize the information before sharing it.
A 360-degree view of an individual is only attainable through that individual.
— Matt Hogan, co-founder of Datacoup
Datacoup will give you a monthly check for about $8 for letting their API gather information from your Twitter or Foursquare profiles. With Handshake, you can negotiate to receive $10 for filling in a questionnaire about your buying habits, and by using Meeco’s private cloud to store your information and share your brand preferences, you might get a 50-percent discount on a pair of jeans.
Granted, none of these services will help pay down your college debt, but advocates say the goal is empowerment, not profit.
“Data for dollars is just the start. We want our user base to be as knowledgeable as possible about their data so that they can understand their options.” says Matt Hogan, co-founder of Datacoup, which finishes its testing phase and goes live in July.
These new platforms will give users the possibility to share their information with a wide variety of companies, from universities and favorite brands to hedge funds and retailers. Data buyers also benefit from the two-way marketplace. While data brokers export information from different, often outdated, public registries, customer-produced data is fresher and more accurate.
“A 360-degree view of an individual is only attainable through that individual,” says Hogan, who thinks the Datacoup model helps build more appealing data sets by combining, for example, social activity and payment history.
If services like Datacoup succeed in going mainstream, they could threaten the business model of data brokering, though it’s not yet clear how likely that is to happen.
When it comes to data sets, quality is important but so is quantity, especially in determining behavioral trends. And these marketplaces still have a long way to go if they want to compete with Facebook’s 1.2 billion users.
“We are going after them, but we’re not going to beat them very easily or very quickly,” admits Davis.
Without doubt, the major stumbling block for the widespread adoption of privacy services is consumer apathy.
It is also unclear whether customers are worried enough about their privacy to embrace such services, given that habits are hard to change and selling your own data isn’t exactly lucrative.
“Without doubt, the major stumbling block for the widespread adoption of privacy services is consumer apathy,” says Dow. “Maybe it will take a major data event that affects the world’s population before we see significant consumer demand — like a global financial crisis of data.”
Finally, while such services hope to provide a new framework for consumer data control, some think more will need to be done to legally regulate online data privacy in order for them to flourish.
“I think the idea of being able to chose to participate in a data market has to go hand in hand with the ability to protect your data,” says Susan McGregor, a researcher specializing in digital security at the Tow Center. “If I can’t control the flow of my data into a marketplace, I can’t extract value from it.”
And legislation always moves more slowly than technology. A recent report by the U.S. Federal Trade Commission showed that data brokers operate with a fundamental lack of transparency and called for more accountability, but specific legislation is still not on the horizon.
Private data markets may not solve the issue of data leakage singlehandedly, but they might help consumers appreciate the value of the information they generate and gain control over how they share it.