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Privacy incentive

You want to know my name, age and music preference, and the contact details of my friends? That is € 19.95 please. ” In reality, of course, it is not the case. We, users of all kinds of online services, simply give away our data, free of charge and for no reason. That is actually weird, because companies earn a lot of money with our personal data. So basically it’s like we give them big gold bars or barrels of oil. Internet companies offer us all kinds of “free” services. But those services are anything but free. We pay with our privacy.

Nevertheless, the economic value of personal data hardly plays a role in the privacy debate. To protect our privacy, we mainly look at the privacy laws. But there are also other strong incentives to protect our privacy . We have to use it much more consciously and strategically.

Privacy protection

Privacy protection in the EU is the responsibility of the European Commissioner for Justice and Consumer Protection. That is good too. But once privacy protection belonged to the competence of the European Commissioner for Internal Market. And in the United States a large part of the American privacy laws are subject to the Federal Trade Commission. A more economic view of personal data and protection of it, is therefore not completely out of the question.

First of all, personal data must be taken into account much more in competition cases. In 2008, both the European Commission and the US regulator FTC concluded that the merger of the Google search engine and advertiser DoubleClick was unproblematic from a competitive perspective, as they were two completely different types of companies, with different activities and different markets. Such a decision would be unthinkable today, ten years later. The combined power of a search engine and an advertiser would no longer be underestimated. But now the next step must be taken: actively use competition rules to exclude market dominance from a company that processes personal data.

Internet giants

The presence of American (or Chinese, or Russian) internet giants that have a near-monopoly in Europe is extremely undesirable, both from the perspective of healthy competition and privacy protection. There are sometimes noises to consider services of Google or Facebook as public services, and to drop them under the relevant laws. That would be a rather drastic step. But it is clear that monopolies on services that everyone needs are not acceptable. That is why it is essential that the national barriers are finally broken down in the internal market so that large European players can also emerge for healthy competition. There are enough smart inventors and entrepreneurs in Europe. But in a market that actually consists of 28 different national boxes, it is virtually impossible to build a real internet giant.

GAFA tax

French President Macron received acclaim for his proposal for a GAFA tax: tax on the profits of the internet giants Google, Apple Facebook and Amazon . Many people do not consider it fair that those companies get away with very low tax rates. But perhaps a smarter tax is possible: a tax on the use of personal data.

In various fields – pollution, energy consumption, consumption – we use taxes to influence behavior. In the current earnings model of advertisers there is a strong incentive to collect as much personal data as possible. If there is a price tag attached to the use of personal data, there is a strong incentive to limit that. The same applies to governments that look specifically at personal data, including mass surveillance, and force companies to store data much longer than is actually necessary. The costs for the storage and the use of personal data must be included in the public budget, so that there is a public, political consideration, as a brake on unbridled data storage.

Technological progress offers us fantastic new opportunities that we must seize with both hands. The importance of privacy protection is now also widely recognized. Tight privacy laws and good enforcement are essential, but not enough. Economic and fiscal resoarces must also be used as an incentive for companies and governments to protect our privacy rather than an incentive to violate it. A special European Commissioner for Privacy Protection in the next European Commission could well take the lead here and ensure better privacy in all policy areas.

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