California's Governor Wants Tech Companies To Share Profits With Consumers

Gavin Newsom, the governor of California, wants consumers to benefit from the billions of dollars technology companies in the state made by forcing the tech companies to share their profits.

According to a report in Fortune citing comments Newsom made during a State of the State speech Tuesday (February 12), Newsom talked up the idea of a so-called digital dividend that would enable the consumers in the state to access some of the profits these tech companies make off of them. While the governor said he was proud that California is home to so many technology firms, he also said that the companies making billions in profits “collecting, curating, and monetizing our personal data have a duty to protect it. Consumers have a right to know and control how their data is being used.”

According to Fortune, he went on to make a remark about having tech firms share in the profits. “California’s consumers should also be able to share in the wealth that is created from their data,” Newsom said. “And so I’ve asked my team to develop a proposal for a new data dividend for Californians, because we recognize that data has value and it belongs to you.”

While Newsom didn’t provide details about what the digital dividend would look like, he predicted the state could do something “bold,” noting that California’s new data privacy law, which is seen as among the strictest in the country, goes into effect in 2020.

The comment from Newsom was praised by privacy advocacy groups, which at the same time called on tech companies to provide full transparency about how their data is handled and how much it is valued at for the technology companies that control it.  James Steyer, founder of Common Sense Media, the group that was credited with getting the California Consumer Privacy Act created and passed last year, told Fortune that the tech companies are still acting irresponsibly with consumer data and aren’t willing to share what they are doing with and how much money they are making from it. “We fully support the governor’s data dividend proposal and expect to introduce legislation that reflects that in the coming weeks,” Steyer said in the report.

Google ended 2018 with profits of more than $30 billion, while Facebook was able to rake in more than $22 billion.





The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.