Which phone is worth the money
The EU finance ministers have long been calling for a digital tax. Last week, the French Finance and Economics Minister Bruno Le Maire visited Vice Chancellor Olaf Scholz (SPD) in Berlin and spoke to him. Nobody knows what such a digital tax might look like, but it should be ready in December. The goal is clear, however: It should affect those companies that create huge value from the data they collect in this country.
Above all, this should refer to Google, i.e. Alphabet, and Facebook. Both companies are worth several hundred billion euros and are among the most valuable companies in the world. In doing so, they practically sell nothing except advertising space on the Internet. However, they are particularly good at this. Because they collect innumerable amounts of data from the users of their services, they know exactly which user they are best to show which advertising. In exchange for their data, users get access to the company's services. But is that a fair deal? In order to be able to judge this, you first have to know what an individual's data is actually worth. It's not easy, but there are still a few approaches.
Price at data dealers
Perhaps the most direct way is to see what data is being paid for in the market. The price depends heavily on what data is involved. In a 2013 report, the OECD evaluated the cost of various data sets from online data dealers. A US address was available for the equivalent of 0.44 euros, a date of birth cost 1.75 euros, but you had to pay seven euros for a social security number. A driver's license number cost 2.60 euros and a proud 31 euros was the price for a personal military file. For Germany, a study by the Ministry of Justice, updated in 2017, found that a simple household address costs between 6.5 and 24 cents, and an email address is worth between 0.75 and one cent.
Company turnover per user
Probably the most common approach to determining the monetary value of data is to pass the value of a company on to its users. You divide the turnover by the number of active users. Investors also speak of the "ARPU", the "Average Revenue per User", ie the turnover per user. With internet companies like Facebook and Google in particular, this is also a popular model for investors to see how well the companies can turn their users' data into money.
Last week, Twitter presented the current quarterly figures and accordingly made a turnover of 667 million euros between the beginning of July and the end of September. The company had 326 million active users in this period - the data from a twitterer was worth 2.05 euros for the company in the three months. For Facebook, the value is currently 5.25 euros. However, the value always depends heavily on the place of residence and thus on the purchasing power of the individual users. In North America, the Facebook data is worth more than 20 euros per quarter, in the Asia-Pacific region only two to three euros. In North America, advertising is more worthwhile, which makes advertising space more expensive, and so the user data is worth more in this way.
For Google, the ARPU value is difficult to determine, as the company usually only gives user numbers for some of its many services. Some studies have nevertheless determined approximate values - they usually come to values around 35 to 45 euros.
Damage from a data breach
How much data is worth becomes tangible when you look at the financial damage caused by a data breach. In March 2007, for example, the US retail group TJX Companies had the credit and debit card numbers of 94 million customers stolen. The group had to provide 118 million dollars for reparations in the following year - makes about 1.11 euros per stolen customer. Not included in the price is the enormous damage to the company's reputation.
Data protection costs
You can also simply see how much money users are paying to protect their data. This differs depending on the type of data. In 2013, two researchers from the University of Colorado at Boulder calculated how much money app users were worth their privacy. To keep the browsing history secret, they were willing to pay two euros. It was 3.56 euros for their contact list, 1.05 euros for the location and 3.15 euros for the content of their text messages. For 17.50 euros a month, the "Protect my ID" project offers comprehensive protection for all data. Should something go missing, the sum insured is up to 880,000 euros. Another note: ad-free e-mail services that do not make their users' data available to advertisers cost between one and three euros a month.
To know how much money their data is worth to users, you can of course also ask users how much money their data is worth to them: For how much money would they sell which of their data? In 2014, two researchers from the Düsseldorf Institute for Competition Economics examined this. Only ten to 20 percent of those surveyed weren't even willing to sell their data - the rest was about price. The respondents wanted 15 euros for contact details such as name, address, e-mail and telephone number. The Facebook data was worth more to them: they wanted 19 euros for the name, about page and timeline.
In 2013 the Financial Times an online calculator where everyone can try out what their data is worth. For this purpose, the values of individual pieces of information for companies were determined from numerous sources. The age or gender of a person is therefore worth 0.0004 euros, for details on income or a list of past purchases it is 0.001 euros. In mid-2017 the Financial Times updates the computer, and as you gradually feed in your data, one thing quickly becomes clear: the richer and more important someone is, the more valuable their data is.
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