What if we could demand something in return for our personal data?

A look at the drivers behind the nascent personal information economy

How much is your personal data worth? If we're talking about name, address and date of birth the answer is not much at all. The lists containing these details sell for a few pounds per thousand, giving you a value of pennies at most. And yet companies such as Google and Facebook have become multi-billion dollar behemoths on the basis of personal data.

Their value-add, of course, is taking our basic data and combining it with information picked up by tracking what we do on the internet and selling this as an aggregated dataset to advertisers. This data can be used to infer what we might do next and is incredibly valuable. It also helps Google fine tune its search engine and to offer it for free, so everyone's a winner - at least in theory. However, this same information can also be used to manipulate what we see, not just in terms of advertisements but also news stories and other social media posts in a way that is completely opaque to the user. Our personal data is certainly not always used in our favour.

"Google are geniuses," said Ariadne Capital managing director Amit Pau recently "They have built a business with a market cap of $458bn all around harnessing my data ... But is that fair? Do we as consumers get any economic benefit beyond free search and being stalked online? Is that a sustainable business model in the mid to long term? I suggest no."

Google et al are not the only companies collecting personal data, of course. Visit a car sales web site more than once and you can guarantee that your return will be flagged up by cookies downloaded to your device. Suddenly, far from being almost worthless, your data is hot property. How will they use it? If you are lucky they might offer you a discount on the car they know you are interested in to get you through the door. If you are unlucky they might take your evident interest as an opportunity to charge you a premium price.

"Most people don't understand that the value of their data is contextual," says Katryna Dow, CEO of life management platform Meeco. "It has what we call an optimal value for exchange. What you might get £10 for in one scenario might be worth £1,000 in another scenario if it is accurate, real-time and contextual."

She continues: "The intent that you are going to replace your car in the next four weeks combined with the fact that you're clear about the make and model makes that information incredibly valuable and hotly contested."

The idea behind Meeco and similar platforms is that individuals should be able to control what data they share and with whom. Rather than their personal data being harvested, sold on and used in ways they cannot understand or control, they should instead be able to vet access to that data and license it to interested parties on the basis of "what's in it for me?". Some tangible benefit should accrue to the individual in the exchange, be that money, a free test drive, an upgrade or something else, and the terms defining how it can be used should be agreed on before the exchange takes place.

Many people believe that the arrival of the "personal information economy" is imminent, including "big four" professional services firm EY.

"Today's organisations are used to operating in a golden age of free customer data," EY says in a 2014 report (PDF). "However, consumers are becoming more and more selective and careful about who they share their data with."

EY says that increasingly companies will have to offer something in exchange for personal data. This is not a new idea - loyalty cards work on this basis - but EY predicts the market will broaden and deepen and that consumers will demand more transparency.

With EU data protection laws set to redefine what constitutes personal data and how it should be treated, businesses that rely on it need to start to think about what they will offer in exchange.

This article is one in a series of pieces about privacy engineering collected under the tag Privacy by Design.