Lawmakers float data tax as part of privacy promotion
While New York is not the first state to propose data privacy legislation, it is the first to propose a data privacy bill that would implement a tax on large tech companies that benefit from the sale of data. New York consumer data.
Known as the Data Economy Labor Compensation and Accountability Act, the bill seeks to enact a 2% tax on annual revenue earned from data from New York residents. This tax and other rules and regulations aimed at protecting citizens’ data will be enforced by a newly established Consumer Data Protection Office described in the bill.
The office would require all data controllers and contractors to register annually in order to meet state compliance requirements. Failure to do so, according to the bill, would result in fines.
As for the tax, all funds will be devoted to improving education and reducing the digital divide.
“Tax revenue will be used for digital literacy, workforce reshuffling, STEAM (science, technology, engineering, arts and math) education, kindergarten to 12th grade education year, to retraining and retraining the workforce, ”said Senator Andrew Gounardes, D-22. .
As to why the bill is being proposed now, Gounardes said, “Every day, big tech companies like Amazon, Apple, Facebook and Google capitalize on the unpaid labor of billions of people to create their products and services through targeted advertising and artificial intelligence. “
As a result, he said, “it is fair that New Yorkers are paid for their free labor.”
Examples of this free job include filling out search engine requests, sharing social media updates, filling out CAPTCHA requests, and visiting different websites.
“The premise is solid,” Gounardes said. “New Yorkers provide resources to businesses and don’t get a dime in return. If it was an oil company, a factory, or any other type of company that profits from the work done by individuals, they would be paid. “
However, an industry expert expressed a different opinion on the bill, questioning whether the legislation actually addresses data privacy concerns.
“I don’t really think the bill talks about privacy per se,” said Cynthia Burke, chief compliance officer at cybersecurity firm Capsule8. “It doesn’t tell big companies what they can and can’t do in terms of data collection; on the contrary, all it says is that they are going to be imposed. “
However, said Burke, the bill opens the door to discussions about how big tech companies are using citizen data and how those concerns might be addressed.
“I think for the bill to go anywhere it would first have to be Amazon, Google, TikTok and other big tech companies disclosing the data they collect on New York residents,” she declared. “If this went ahead, it would create hundreds of millions of dollars for the state.”
But would that be enough to prevent big tech companies from taking advantage of New Yorkers’ personal data?
The answer, according to Burke, is unlikely.
“Even the catastrophic GDPR fines haven’t slowed down the biggest tech companies – what about a tax doing anything to curb the data economy as we know it?” she said. “Google is unlikely to give up the billions in revenue generated by consumer data, even if it were taxed.”
However, she says, “we saw something similar in the past with the Industrial Revolution; it’s just a new context. It would be up to lawmakers to look back and learn from those times to navigate this new data economy. ”