Data privacy: How much are your intimate details worth? More than a Happy Meal?
Is the value of our personal information online going up or down? That depends on which side of the transaction you sit.
For us, the value of our data seems to have stagnated at hot-lunch levels, bouncing between the cost of a linguini with clam sauce and a McDonald’s Happy Meal. But for data collectors like Amazon, Facebook and Google, the value of our data continues to grow, seemingly unbounded.
For example, the Federal Trade Commission last week fined Facebook $5 billion for allowing Cambridge Analytica to collect enough data to build psychological profiles of millions of us. At roughly 200 million U.S. Facebook users, that works out to about $25 apiece – about the cost of a fine Italian entrée.
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That sounds pretty attractive when you consider Equifax a few days earlier agreed to pay a little more than $700 million in fines, compensation and fees – or a little less than $5 for each of the 147 million of us whose intimate financial details were compromised, putting us at risk for identity theft. (The equivalent of a fast-food meal.) Don’t forget to add in the free identity protection service the company gave us after the 2017 breach. A service, mind you, we didn’t want or need before Equifax lost compromising data we never gave it permission to collect.
Two weeks ago, during Amazon’s Prime Day blitz, the internet giant placed a value of $10 on our privacy. Sort of. The company offered $10 off a purchase of at least $50 for those who installed the Amazon Assistant shopping app, and let it follow them around the internet.
Still a pittance, yes. But unlike Facebook and Equifax, at least it’s proactive. So there’s that.
For the collectors of our data, however, its value soars skyward. On the same day as the FTC ruling, Facebook’s earning release revealed ad revenues – more than 98% of the social media giant’s business – grew 28% from the year-earlier quarter to $16.6 billion. Profits would have grown by double digits as well, were it not for $3.1 billion in one-time charges - $2 billion of which was due to the FTC case. As it stands, Facebook earned just $2.6 billion, a little more than half the $5.1 billion it made a year ago.
Billions on one side. Five-dollar Footlongs on the other. It smacks of the same imbalanced, coupon justice behind just about every class-action lawsuit I’ve ever learned I was part of.
Perhaps the most disturbing aspect of the value imbalance embedded in the FTC fine isn’t about how little we’re compensated. It’s more that the fine – and others like it – aren’t painful enough to elicit behavior change. The company has again paid lip service to privacy, and to doing things differently. “Again” being the operative word. So don’t hold your breath.
And why should Facebook change? It’s clearly shown it has the financial chops to weather speed bumps like this. The FTC fine is basically behind the company now, after the second-quarter charge of $2 billion, and another $3 billion incurred during the first quarter. Meanwhile, cash continues to pile up, to $48.6 billion last quarter from $45.2 billion in the first period and $41.1 billion in the 2018’s fourth quarter. And the stock price, which fell 2%t Thursday to $200.71, is still only 4% off the year’s high – and 56.1% higher than the year’s low in January of $128.56.
The penalty Equifax faces is comparatively painful, as the charge represents 80% of second-quarter revenues of $880 million. But that’s for a data breach. It’s still aggregating and selling our data as before.
What we need is legislation that spells out what internet companies can and can’t do with our data – with and without our permission. Most important, it needs to have teeth, with clear guidelines for what it costs Amazon, Facebook, Google and the others when they don’t follow the law. That will force payouts for violations that, hopefully, will matter enough to change the big guys’ behavior.
The California Consumer Privacy Act, or CCPA, which goes into effect in January, is a landmark piece of legislation that could be our best chance of shifting the balance. But it remains to be seen how much bite the CCPA will end up with, as the internet bloc is still searching for ways to file down the law’s teeth before the state legislative session ends in September.
If it turns out to be strong, CCPA could end up being a model for other states and – eventually – the federal government. If not, well, who wants a Happy Meal?
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USA TODAY columnist Mike Feibus is president and principal analyst of FeibusTech, a Scottsdale, Arizona, market research and consulting firm, and producer of Privacy Now, a twice-monthly interview series on YouTube. Reach him at mikef@feibustech.com. Follow him on Twitter @MikeFeibus.
This article originally appeared on USA TODAY: Data value for Amazon, Facebook grows, but consumers get short shrift
