Who Owns Americans’ Personal Information and What Is It Worth?
posted by Robert Shapiro on April 13, 2019 - 2:16pm
Co-authored with Siddhartha Aneja.
Americans are rightly concerned about mounting evidence that the internet’s major platforms and many large companies are systemically gathering, analyzing and selling everyone’s personal information. More than nine in ten Americans believe that they should determine who can see their personal information, and nearly nine in ten believe they should be able to direct any website to dispose of their personal data.2 Yet, these operations – gathering and analyzing as much personal information as possible about every American and selling it in various forms – are an essential part of the online economy’s current business model.
The largest search engine and social media platform, Google and Facebook, created this business model as they came to recognize that people use search engines and social media in ways that reveal extraordinary amounts of personal information. What people search for online and what they say and do in online communities often reveal their interests, likes and dislikes, income, debts, politics, sexual orientation, health status, addictions, education and intelligence, as well as their gender, age, marital status, ethnicity, religion, friendships and family background. Both sites also have access to what people write on G-mail and Facebook messages; and the companies’ algorithms have created hundreds of millions of comprehensive profiles that advertisers and other businesses pay billions of dollars to access or use.
For a clear sense of how much personal information the large internet platforms collect and analyze, the two authors of this study, a Millennial and an older Baby Boomer, downloaded their personal data files from Google and Facebook. It is unsurprising that Millennials in their 20s and 30s use Google and Facebook much more than Boomers in their 50s and 60s. So, we discovered that Google holds 3.51 gigabytes of personal data on the Millennial, and Facebook holds 631 MB; for the Boomer, Google has 51 MB of personal data, and Facebook has 71 MB. One MB of information is the equivalent of 583 Word pages, and one gigabyte is the equivalent of 583,038 Word pages.3 So, Google’s current files of personal information on the two of us would fill the equivalent of 2,09467,463 Word pages on the Millennial and 29,735 Word pages on the Boomer, and Facebook’s personal data files on us would fill the equivalent of 367,897 Word pages on the Millennial and 41,396 Word pages on the Boomer.
The major web platforms are the most prolific and profitable hunter-gatherers of personal information, which they typically analyze and use for considerable fees to attract advertisers by offering to target their digital ads. Led by Google, Facebook, Microsoft, Amazon, Verizon and Twitter, these operations occur on a very large scale. Virtually all of the ads on those platforms depend on targeting algorithms based on tens of millions of individual profiles created from the personal information the platforms gather on their users.
This drive to know as much as possible about everyone and profit from it is not limited to the giant search engines, browsers and social media platforms. Most other U.S. companies lack the scale, skills or incentives that would justify creating and operating their own data analysis programs. Instead, thousands of companies gather personal information that their customers or clients provide in the course of doing business with them, and then sell their information to large data brokers, such as credit bureaus. In turn, those data brokers analyze, package and resell the information, often as personal profiles. Their customers range from employers involved in hiring and companies planning marketing campaigns, to banks and mortgage lenders, colleges and universities, political campaigns and charities. In addition, credit card companies and healthcare data firms also routinely gather, analyze and profit from the personal information of their users.
We also examine the gathering, analysis and sale of personal information by credit card companies and healthcare businesses, because most Americans feel strongly that their personal financial and health information is especially sensitive and rely on the government to restrict the dissemination of such information. However, those restrictions apply only to certain types of financial information -- for example, personal bank balances, but not loan repayment data – and the requirements on health care information apply to healthcare providers but not to pharmacies or medical device producers. Moreover, personal financial and health-related information can be gathered, analyzed and sold in anonymized forms, which algorithms can match to most people or simply generate detailed financial and health-related profiles based on the extensive information that internet platforms and data brokers have on everyone.
Finally, the personal data now routinely used for commercial ends are not limited to the information that people reveal through their activities on internet platforms or through the goods and services they purchase. In addition, the Internet of Things has projected personal data gathering into many other aspects of people’s lives. For example, smart TVs collect, analyze and sell personal information on who owns them and what they watch. Smart cars and smartphones collect, analyze and sell personal information on who owns them and every place they go. Smart beds and smart fitness bands collect, analyze and sell information on who uses those products and their temperatures, heartrates and respiration. Further, the new generation of wifi-based home devices that respond to people’s voice commands – led by Amazon’s Alexa, Echo, and Dot, and Google Nest and Google Home – can capture not only personal information about the people who buy and install them, but what they say in the range of those devices.
Since most Americans believe that their personal information is their own property, this analysis estimates the market value that the major internet platforms, data brokers, credit card companies and a leading healthcare data firm derive from capturing, analyzing and selling Americans’ personal information. As expected, the large web platforms are the most prolific and profitable gatherers, users and sellers of personal information. Data brokers also derive billions of dollars from buying, analyzing and reselling Americans’ personal information, as do credit card companies and the leading healthcare data business.
Please click here to access the full report.