April 2, 2019
A Dive Into Digital Dividends
California Governor Gavin Newsom’s recent State of the State address has brought increased attention to the idea of giving data dividends — platforms paying out a portion of their profits to their users — which is based on the premise that data has value and belongs to its owner. In a new Insight, AAF’s Director of Technology and Innovation Policy Will Rinehart argues that giving data dividends to users is misplaced.
The digital dividend might be a simple solution, but it would likely not help consumers. As noted, many are quick to equate advertising revenue with the value of consumer data, but that move isn’t warranted. Even if such a system were implemented, it would be inherently skewed towards the wealthy, since it is this group that advertisers are looking to reach. Consumers already benefit tremendously from ad-supported platforms. Policies meant to rebalance an already unequal relationship where consumers win is likely to harm the ecosystem to their detriment.