May 4, 2018

UK official: Facebook could pay for user data

Steve LeVine, Sara Fischer, Alison Snyder

Major platforms could have to pay for their data. Photo Illustration: Chris Jackson/Getty

Matt Hancock, the UK's minister for digital issues, said today that he is open to forcing platforms such as Facebook and Google to pay for the data they mine from their hundreds of millions of users.

Why it matters: In his remarks to Axios, Hancock may be the first senior Western government official to publicly offer a challenge to Facebook and Google's fundamental business model.

The major platforms — Google, Facebook and Twitter among them — earn their enormous returns largely by offering their consumer services for free in an effective exchange for the data reflective of users' online behavior. That data allows the platforms to offer advertisers highly micro-targeted audiences for their messages.

But new legislation to take effect in the EU on May 25 would begin to erode that compact.

  • The General Data Protection Regulation (GDPR) gives consumers greater rights to control who gets their data.
  • And the follow-on ePrivacy Regulation, to take effect some time in 2019, will put in place much more rigid requirements for individual consent for the sale and use of customer data.

Hancock said these moves will establish a framework in which a market structure could be built for such a data payment system. Among ideas raised for such a system is an auction in which platforms would bid for aggregated user data.

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