Data Dividend: The Dark Cloud Looming
Should the public receive compensation from corporations using their personal data?
RAYMOND B. KANIU
As earnings reports were released this week, it was not a surprise that Big Tech's earnings were higher. Big Tech companies have been the largest beneficiary of increasing online activity captured by compelling and competing digital advertising, which at times could be eerie based on the data collected through search, strongly suggestive nudges, and answers provided through algorithms spun by machines learning at a faster rate than the human mind can think. Our insatiable appetite to fulfil our needs and desires is on full display through our clicks, gradually collecting information about us over time. We are living in an age in history where more information about human beings is stored online. A depository of personal information sits within this realm and can be accessed at any time by anyone, for anything.
The practice of using a network of remote servers hosted on the internet to store, manage, and process data, instead of a local server or a personal computer is known as cloud computing. Cloud computing's rise has run parallel to the digital transformation accelerated by remote work and the COVID-19 pandemic. Such is the might of Alphabet, owners of YouTube, Google Cloud, and what it is known best for, Google Search. Alphabet's earning reports revealed that shares jumped by 10% to $3,030.93, propelling Google toward a $2 trillion valuation. Revenue from Alphabet's cloud division generated $5.54 billion in sales in the fourth quarter against a projected $5.42 billion. Alphabet also announced a 20-for-1 stock split, a second one since going public in 2004. It means that investors will receive 19 more shares for every share they hold, subsequently lowering Alphabet's stock price to slightly below $150. The last split was in 2014, a moderate 2-for-1 split that created the company's Class C shares. Alphabet hopes to overtake its competitors given its competitive advantage in marketing and search. According to Fortune Business Insights, the cloud computing infrastructure market in 2021 was worth $250.04 billion and is projected to rise to $791.48 billion by 2028. Amazon Web Services and Microsoft Azure cloud infrastructure dominate the market. These projections, coupled with the accelerated business changes that will most likely remain, should secure Alphabet's ambitions to overtake its competitors.
How much of the revenue earned by these companies will actually reach the public whose information is traded like a commodity at the price of the highest bidder? Arguably, most of us are accustomed to surrendering a bit of privacy for accuracy in suggestions, which also benefits both us and the companies we elect to provide that information. It means the benefit to the public is only intrinsic, not monetary. For example, if you are accurately led to purchase something you may or may not need, how does that benefit you in financial terms? This is the concept of data dividend which views data rights as human rights. Big tech companies are making billions by using our data. How can the public receive a fair share of revenue related to the use of personal data?
These are very testing times when salaries cannot keep up with inflation, crises are random, rampant, and infrequent. The public has begun to look for alternative streams of income beyond the burdened safety nets provided by the government and employment. If data is a human right, then humans should benefit off the information they surrender. The only time the public has appeared to invoke that right is when cyber-attacks happen, when the concern shifts to what information was stolen, how it was stolen, who that information belongs to, who stole that information, and their intentions, for better or worse. Never has the obvious question been, who has my information? What is the exposure coefficient? If that information is used to profit a company, how much of that revenue trickles down to me? These are serious questions that will carry on to what the Chief Executive of Alphabet, Sundar Pichai alluded to in the earnings announcement, the Web 3.0. The Fourth Industrial Revolution will demand more information and will require a cloud infrastructure to store all that information, a virtual world modelled after ours where data will also include things we possess on these platforms. These advances of technology will happen in our lifetime, but the one I bring to your attention has been happening for a while. When should we begin to honor data as a human right, and with it, a fair share of the revenue received from it. How will the law be applied to these complex matters as technology advances faster than its governance. How will businesses react to these demands?