New bill takes aim at social media data goldmine

Two senators have introduced legislation that would require social media companies to calculate the value of the data they collect and provide clear options for users not to share it.

The Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data (DASHBOARD) Act, introduced by Sens. Mark Warner (D-Va.) and Josh Hawley (R-Mo.) would implement a range of new regulations on commercial data providers and services that have more than 100 million monthly users.

The bill would require big social media platforms to send regular updates to their users that outline the economic value of their data, the types of data collected from users and how the company and third parties are using the information. It would empower the Securities and Exchange Commission to develop a formal methodology for calculating such value.

It would also give users "the ability to delete all data, in the aggregate and for an individual field," that the commercial data operator possesses or maintains.

In a statement, Warner said the legislation would "allow consumers to understand the true value of the data they are providing to the platforms," increase market competition and provide antitrust regulators additional insight into potentially anti-competitive practices.

"For years, social media companies have told consumers that their products are free to the user. But that's not true -- you are paying with your data instead of your wallet," said Warner. "But the overall lack of transparency and disclosure in this market have made it impossible for users to know what they're giving up, who else their data is being shared with, or what it's worth to the platform."

One tech group was quick to criticize the bill. The Information Technology and Innovation Foundation, a tech policy think tank, said that while certain provisions have merit -- such as empowering the SEC to develop a methodology to calculate the value of a user's personal data – the premise underlying the bill "is wrong" because "consumers always come out ahead by sharing data in exchange for a free service."

The organization also claimed the provisions would create unique burdens on both the platforms and users that aren't placed on other industries.

"This bill would require companies to go through an expensive process of trying to assign a value to each user, an activity which almost certainly would irritate consumers even if required by the government," the group said in a statement. "In no other sector does the government require businesses to reveal which customers are most valuable to them."