Opening up data as a revenue stream is one way for tech companies to keep cash on hand. In the tech world, where so much capital is tied up in investor equity, the need for cash has kept startups and other tech companies pursuing innovative strategies such as software-as-a-service revenue models and data monetization. Unlike SaaS, data monetization can be seen by users as a breach of trust. In Illinois, legislation is being put forward that could inhibit data monetization. What follows is a discussion on the legislation and ways for start-ups and other organizations to maintain their reputations while still monetizing data.
The Right To Know Act
Cook County Sheriff Tom Dart is pushing for legislation that would require organizations to inform consumers when their data is being sold to third parties. The data outlined in the bill includes sensitive personal information like race, age, and location. While government and law enforcement organizations must rely on court orders to access information, many companies are able to see, share and sell it. Some analysts see the bill as a way to even the scales.
The bill passed the House and the Senate. Its passage shows the amount of support the bill has received from consumers who do not like the idea that their personal information can be sold, even if they agree to it in the terms of service.
Maintaining User Trust
Transparency is important. Most users know that their data isn’t private and they are willing to take the risk because they value the service or product enough to sacrifice some privacy. Being clear with users on the types of data your organization collects and whether or not that data will be sold to a third-party will establish a relationship of trust with your users. For instance, many apps and other streaming services make it clear that they will not sell personally identifying data. In other words, users’ streaming habits and location may be sold but not their personal identification.
Considering this, the legislation won’t make a great deal of difference to organizations who are already monetizing their data responsibly. However, it is time for organizations to make it clear what their intentions are when collecting user information.