Paying for Privacy and the Personal Data Economy

Abstract

Growing demands for privacy and increases in the quantity and variety of consumer data have engendered various business offerings to allow companies, and in some instances consumers, to capitalize on these developments. One such example is the emerging “personal data economy” (PDE) in which companies, such as Datacoup, purchase data directly from individuals. At the opposite end of the spectrum, the “pay-for-privacy” (PFP) model requires consumers to pay an additional fee to prevent their data from being collected and mined for advertising purposes. This Article conducts a simultaneous in-depth exploration of the impact of burgeoning PDE and PFP models. It identifies a typology of data-business models, and it uncovers the similarities and tensions between a data market controlled by established companies that have historically collected and mined consumer data for their primary benefit and one in which consumers play a central role in monetizing their own data. The Article makes three claims. First, it contends that PFP models facilitate the transformation of privacy into a tradable product in the online setting, may worsen unequal access to privacy, and could further enable predatory and discriminatory behavior. Second, while the PDE may allow consumers to regain a semblance of control over their information by enabling them to decide when and with whom to share their data, consumers’ direct transfer or disclosure of personal data to companies for a price or personalized deals creates challenges similar to those found in the PFP context and generates additional concerns associated with innovative monetization techniques. Third, existing frameworks and proposals may not sufficiently ameliorate these concerns. The Article concludes by offering a path forward.

Keywords: Internet of Things, Personal Data Economy, FCC, FTC, Data Trade, Contracts, Privacy, Security, Consumer Law, Housing, COPPA, Discrimination, Data Business Models