Amy Klobuchar suggests taxing companies making money off user data

Minnesota senator and presidential candidate Amy Klobuchar has floated the idea of taxing tech companies when they exploit user data. Platforms like Facebook “use us, and we’re their commodity, and we’re not getting anything out of it,” Klobuchar said today during a SXSW interview with Recode co-founder Kara Swisher. “When they sell our data to someone else, well, maybe they’re going to have to tell us so we can put some kind of a tax on it.”

Klobuchar acknowledged that she was simply floating an option, not putting forward a detailed policy prescription. And the idea isn’t nearly as mainstream as passing privacy legislation or toughening antitrust policies, two areas Klobuchar also emphasized — saying she wanted to scrutinize whether companies like Facebook, Amazon, and Google had suppressed competition. But she said a major problem with the tech landscape was that “we just thought ‘Oh, we can just put our stuff on there and it’s fine,’ and they’re making money off of us.”

She compared tech companies using consumer data to transportation companies using public infrastructure. “If you go on a truck, if you send stuff on rail, you have to pay for the roads and you have to pay for the rail. And maybe there’s some way we can do that with large sets of data, when [tech companies] use it or when they sell it,” she said. “Because otherwise, we’re just being used, right?”

Turning this idea into actual policy would be complicated — it would require determining what counts as taxable consumer data, what kind of data sharing should incur a tax, and which companies would be required to pay it. Klobuchar said she didn’t want to inhibit innovation, and she suggested that the rule might only apply to “larger platforms, not startups.”

In Europe last year, regulators proposed a tax on any company making money from advertising or selling user data within a country, regardless of whether they have a brick-and-mortar presence. However, some EU member states criticized the plan, and it was abandoned in favor of a more limited proposal from France and Germany. In the US, Klobuchar is the first major 2020 presidential candidate to propose a similar tax.

But several candidates have run on the promise to rein in a handful of large tech platforms. Yesterday, Klobuchar’s competitor Elizabeth Warren revealed a plan to designate some companies as highly regulated “platform utilities,” and to roll back mergers like Amazon’s purchase of Whole Foods and Facebook’s acquisition of WhatsApp and Instagram. Klobuchar was generally more circumspect in her interview, but a data tax would be a dramatic proposal — if she actually moves forward with it, which seems far from certain.