Information – A Natural Resource

Data is a natural resource. As other natural resources, it is created through spontaneous processes. Data is created and generated by every activity and situation. Natural or artificial. Data is extracted wherever and whenever we find the means to measure our life and world.

This article proposes to treat data in a different way, a way that will require data-based companies to pay a fair price for the data they gather and use.

In the past two decades, we have become accustomed to living in a world interpreted as data. Data that encapsulates information about us, our habits, personality, our needs, the way we walk , mate, love, sell, buy, manufacture and much else of what we do. There are few activities in the modern world that are not recorded and stored digitally.

We store data in order to use the information it contains for various purposes. We make use of this information to achieve many goals. Some are truly in order to improve our lives. The most obvious advantage is medical information to improve our health with our personal data or improve our health care system with data from hospitals and other health care institutions is but one example of many.

We have been learning to use information as a source generating benefits. Social, criminal, political and many economic, financial and commercial benefits.

Most of us consent to providing our personal data to various degrees. The GDPR has given many people more control about what they divulge and share and with whom. We share it with the agreement and understanding that whomever we share our data with, will use it to provide a service we want or need. (Or believe we need.) We all know the data has pecuniary benefits and we have accepted that these benefits go mostly to those entities who gather our data and to their owners and shareholders.

Many entities learned to use the data to generate huge financial profits, some large and known like Google, Facebook, Amazon and Microsoft some smaller, known locally such as bol.com in the Netherlands, Conrad.de in Germany and many smaller and less known . That is the way our system works now.

The main question is if those that use our data, provide the sources creating it and with it their wealth, with a fair exchange. While many people would say yes, we tend to disagree. The margins of operations for many of these companies show big concentrations of power and give these companies unproportionally large economic and political power. The latter in the form of lobbying as well as the power to grant and deny access to various opinions or to channel any opinion to whomever they wish based on algorithms they write.

We would like to advance a different view of what data is and how to treat it. A way that will allow all of society a share of these benefits and profits.

The companies that gather, store, analyse and use our information are not really paying us anything. They provide many great services and practical solutions. It seems like an obvious win/win. All open and legal in the current frameworks legally and socially acceptable. These services are in effect designed to extract more data that will in turn generate more profit.

The profits they generate go to paying mostly high and good salaries to talented people, bonuses to their management and dividends and share value increase to their shareholders. The main question for us is if they pay their fair share. We believe that the services they provide us with, while great and desirable, generate profits that unproportionally exceed the benefits generated by the same.

The main source for these large profits is simply the fact that they receive the data for free. None of the services we receive is free. Advertising costs are always part of what we pay for any product or service. And we end up paying for these services anyway.

This article proposes to treat data in a different way, the way we treat any other natural resource. A way that will require data-based companies to pay a fair price for the data they gather and use.

Imagine that oil producers, mining or lumber companies and other entities that extract resources from our ground would be able to extract these without paying for this right. That would be unthinkable. We would probably consider it unfair and corrupt. But these companies provide essential materials to our society, create jobs, economic value and moew. Yet, we find it fair and normal that they pay for the right to exploit our grounds or waters for such a purpose.

There are several differences of course between data and other natural resources. While oil, gold and others such natural raw materials take millions of years and even wood takes a decade or two to renew, data is generated at enormous rates continuously. Whereas many extracted materials are not renewable at all or only at a slow rate, data is in principle endless. It can also be used an endless number of times without being exhausted, although it does over time become less relevant sometimes.

Despite the differences, there is one commonality. Data is created always in a certain place. A country, city, street, home, office, plant. Data is generated by people, man made objects and nature; all geographically bound.

We expect oil companies to pay for the right to extract gas in the Netherlands or coal in Germany, gold in South Africa or Aluminium in Australia. We could also expect companies that extract and profit from data that is being generated in a defined territorial boundary to pay the sovereign a fee.

Some have played with the idea of data companies paying people directly and individually for the information gathered and some companies even create apps that do exactly that. But this is not a practical approach in our opinion. If companies such as Google or FB would pay people a portion of their profit per user, the amounts would be small. Profits are typically from 3 dollars and up to 40 dollars per user (simple revenue less costs for the big known companies) per year. That would hardly benefit anyone personally in a significant way with exception of the poorest of the poor.

By treating data as natural resource, we allow national and supra-national governments a legal framework that will require these companies to pay for the data they extract. Just as Shell or Exon pay governments everywhere in the world a fee per extracted gas or oil barrel, Google would pay governments per extracted bit, byte or megabyte extracted. But not only Google or bol.com should pay. Any entity gathering data for commercial uses should pay for it. Universities, hospitals or various other state and non profit entities could possibly get it back as a form of subsidy. Commercial, for profit entities, would pay an agreed amount of money per agreed quantity of data they gather. All to be determined with exploitation agreements and set a solid legal framework.

It would of course have the effect of making data giants less profitable but that is after having benefited practically for free for almost two decades. The proceeds can be handled in different ways. A sovereign fund such as Norway’s for example is the ideal solution in our opinion but each territorial entity would need to decide for itself of course. It can serve to finance the green transition, education, set aside for calamities or any number of purposes that serve the common good of the people and entities creating the data.

The next step is to find, create and define a legal framework that would allow that. Laws that would define data as a natural resource may be the first step. Others requiring payment for such resources and mechanisms to set prices and fees.

In addition, making companies pay for the data they gather will have other effects. With the right price, companies will no longer gather everything without distinction but only that which they truly need to provide the services they want to offer. It would mean possibly less profits and less political power to influence decision makers.

It is time to find a definition of the ownership of data. And do it in a way that benefits the “workers”, those that generate the data, in a fair way.

We also need to explore the technical possibilities and obstacles in measuring quantities of data. We need to decide at what point in the transmission process is data considered as extracted and to be paid for. It should also be decided free from lobbyists and the influence of current beneficiaries. Possibly on EU, US, African Union or ASEAN levels. Entities large enough not to bend in front of special interest. The legal framework could help find and direct and fair evaluation that will allow data companies to keep developing new services while making sure it is not a free ride.

* This article was first published in my blog