It’s Time for Big Tech to Pay Their Fair Share
By New York State Senator Andrew Gounardes
The data economy, in which millions of data points on consumers are gathered, organized, and exchanged daily for the purpose of selling us targeted goods and services, is front and center in the debate surrounding the relationship between human beings and the technology we use to go about our lives. Many wonder if the increase in efficiency is worth the price of data leaks, an overcrowded digital commons, market monopolies, increasingly polarized democratic societies, and loss of personal privacy.
But missing from this debate is an acknowledgement that the data economy represents a glaring, and growing, exception to two fundamental rules of American-style capitalism: first, companies that profit off the labor of others must compensate their workers for the value of their labor, and second, companies that profit off the extraction of publicly owned resources must pay for the right to exploit those resources for profit. Companies in the data economy profit off personal data without paying for the right to extract that data from the public and without compensating the users who perform the labor — the clicks, keystrokes, data entry, etc. — that generates those profits.
Simply put, it’s time for the data economy to start paying us back.
The marketplace for personal data is huge. A 2016 report by the Oxford Internet Institute estimated that the value of the data economy in developed countries was roughly 7 percent of gross domestic product. By that measure, the data economy in the United States is worth approximately $1.5 trillion. That was five years ago. Just this summer, the combined market value of the world’s five largest tech companies neared $10 trillion worldwide. The International Data Corporation, an information-technology research firm, estimated that by the year 2025, there will be 175 trillion gigabytes of data collected worldwide, up from 33 trillion in 2019.
As the growth of the data economy continues to explode, we must change the way we do things and reclaim some of this value for the common good. To do that, we should start taxing commercialized personal data the way we do tangible goods and services, and it’s a popular sentiment nationwide. According to new polling data from Data for Progress, 63 percent of the 1,186 likely voters across the country that were polled would either strongly support or somewhat support a data tax. This breaks down across party lines, as 72 percent of Democrats polled responded either strongly supportive or somewhat supportive, and 56 percent of Republicans polled indicated a strong or somewhat strong level of support.
In our current political climate, it’s hard to find an issue with such a level of common ground and bipartisan voter support.
That’s why, in partnership with Brooklyn Borough President Eric Adams, Joe Toscano from the Better Ethics and Consumer Outcomes Network, the Fiscal Policy institute, and the Brooklyn Law School Innovation Clinic, I’ve introduced the Data Economy Labor Compensation and Accountability Act (DELCAA) in the New York State Senate. If passed, DELCAA would be the first comprehensive sales tax on data in U.S. history, and one of the most robust measures towards assessing and capturing the value of individuals’ consumer data to date. With this new tax, we could raise billions in annual revenue, which we can then dedicate to investments in digital literacy and workforce redevelopment, increase funding for STEAM, bolster our infrastructure in K-12 education, institute workforce reskilling and retraining, and fund digital literacy for seniors and immigrant communities.
But this isn’t just about revenue. The DELCAA will create the Office of Consumer Data Protection (OCDP) which will be responsible for establishing and promoting rules and regulations around properly safeguarding personal data. All data controllers and processors would be required to annually register with the OCDP, and report to the state the amount of data collected, processed, and sold by the data controllers and processors, including all data subjects who reside in New York, as well as their annual gross revenues generated by the sale of our data. And if they fail to register or falsify information, they would be subject to fines.
New York State can lead on this first-in-the-nation redistribution of digital wealth. We can demand giant companies like Facebook, Google and Amazon pay their fair share for profits generated from our data just like we would from any other employer. We must respond nimbly and comprehensively to an ever-evolving digital world, capturing value where it’s at rather than allowing Silicon Valley to set the stage for what they can and can’t pay. We must act now to enact DELCAA, a tax on the commercialization of personal data, to ensure that Big Tech is paying their fair share towards public goods and services while bolstering a tech-literate society.
Andrew Gounardes (@Sen_Gounardes) is Senator for the 22nd District of the New York State Senate.