The newly introduced DASHBOARD (Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data) Act, introduced by Senators Mark Warner (Democrat from Virginia) and Josh Hawley (Republican from Missouri), requires companies to tell users not only exactly what they are doing with their personal date, but also to tell them how much their personal data is worth to the company.

This explains, at least in part, why the DASHBOARD Act invokes the Securities and Exchange Commission (SEC).

This also explains why the opening lines of the bill direct the SEC to “promulgate regulations relating to the disclosure of certain commercial data, and for other purposes”, and why in the pubic announcement on Senator Warner’s website, it says that the DASHBOARD Act will “require data harvesting companies such as social media platforms to tell consumers and financial regulators exactly what data they are collecting from consumers, and how it is being leveraged by the platform for profit.” {Emphasis ours.}

So what exactly does this mean, and to whom will the DASHBOARD Act, if passed, apply?

What the DASHBOARD Act Means

Basically, if the Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data Act passes, companies who would be subject to the act will be required to announce “in a clear and conspicuous manner” the types of data they collect from users, and the way that they use that data, and provide a way for individual users to delete individual pieces of data, or their entire record.

And, oh yes, companies will be required to provide users with an assessment of the economic value that the company places on the user’s data, and to provide it to them regularly (at least every 90 days).

It is this last provision that is most interesting. Companies have been on notice for some time that they should be, and are going to need to be, transparent about what data they are collecting, and even how they use it. However, having to disclose what the value of that personal data is, to the person whose data it is, is a game changer. And while may be in a company’s interest to minimize to the individual the amount of economic value that a user’s data provides to the company, it may not be in a company’s best interest to minimize it in their SEC filing (clever, that).

To What Companies the DASHBOARD Act Will Apply

The DASHBOARD Act will apply to what the bill calls “commercial data operators”, and defines commercial data operators as a company that provides an online consumer service, or who is a data broker, and who “generates a material amount of revenue from the use, collection, processing, sale, or sharing of the user data”, and that “has more than 100,000,000 unique monthly visitors or users in the United States for a majority of months during the previous 1-year period.”

Now, this last line, which is quoted from the bill itself, is open to interpretation, to say the least. (This is a good example of why proper punctuation is so important.) Leaving aside that there is no definition of “material” (as in “a material amount of revenue”), just what exactly is meant by “has more than 100,000,000 unique monthly visitors or users in the United States” is anyone’s best guess (and if the bill passes without revision, it will be up to the courts to guess).

Does it mean that the users must all be in the United States, or does it mean that the monthly users and visitors must be using a service that is in the United States?

And does it mean that those users must each have been in the United States for the majority of months during the previous one year period, or does it mean that the service must have been in the United States for the majority of those months?

Remember that while it may seem as if it should be obvious what this language means, lawsuits have been won, and lost, and laws struck down, for less than this.

And I predict that if the DASHBOARD Act passes it will certainly end up in court.

In the one-pager explanation put out by Senator Warner and Senator Hawley, which you can read here, they explain:

The DASHBOARD Act User data is quickly becoming the single most important economic input in the digital economy. This is particularly the case with social media platforms, where user data allows for more targeted and relevant ads and customized services. But increasingly, as predictive analytics and machine learning permeates ever- greater parts of our digital economy, user data serves as the key enabler for an enormous range of products and services. However, there is currently little transparency into the data collected by platforms – what, exactly, a provider has collected; how it was collected; and what the commercial value is. This serves as a major obstacle for agencies like the Federal Trade Commission (FTC) seeking to address competitive and consumer harms.

Customers have consistently been told that these services are ‘free.’ Yet the current lack of transparency impedes consumers’ ability to fully understand the terms of the exchange and decide for themselves whether they are getting a fair deal from the platform companies that monetize their data. And as dominant social media platforms continue to amend this bargain — free services in exchange for access to user data — in their own favor, this problem is only getting worse for American consumers. The Designing Accounting Safeguards to Help Broader Oversight and Regulations on Data (DASHBOARD) Act would begin to level the playing field for consumers — requiring companies to regularly disclose to consumers the ways in which their data are being used, the third parties it is being shared with, and most importantly, what their data is worth to the platform. This will serve three important goals. First, consumers will be able to determine the true value of the data they are providing to platforms. Second, making the value more transparent could increase competition by attracting competitors to the market. Finally, disclosing the economic value of consumer data will also assist antitrust enforcers in identifying unfair transactions and anticompetitive transactions and practices. This bill also provides long overdue transparency for shareholders — shining a light on how technology firms collect, retain, monetize and protect some of their most valuable, if intangible, assets. The bill would:

Require commercial data operators (defined as services with over 100 million monthly users) to disclose types of data collected as well as regularly provide their users with an assessment of the value of that data.

Require commercial data operators to file an annual report on the aggregate value of user data they’ve collected, as well as contracts with third parties involving data collection.

Require commercial data operators to allow users to delete all, or individual fields, of data collected – and disclose to users all the ways in which their data is being used.

Empower the SEC to develop methodologies for calculating data value, while encouraging the agency to facilitate flexibility to enable businesses to adopt methodologies that reflect the different uses, sectors, and business models.

You can read the read the full text of the DASHBOARD Act here.