This term was coined by a private company called, UBDI, and popularized in tandem with California Lieutenant Governor Gavin Newsom's "Data Dividend" and "Freedom Dividend" advocate (and 2020 presidential candidate) Andrew Yang. It is used to describe a system by which all data contributors are paid for their contributions directly (from buyers) or indirectly (through a government tax and redistribution).
Definition and Usage
Like universal basic income, UBDI proponents argue that profits from certain business practices should be shared with the community. While UBI is often referenced as a government sponsored redistribution program, a UBDI can also be created in the private sector, by giving the rights to the underlying asset to the user or data contributor instead of the receiver or platform owner. For this reason, UBDI is often supported by both those who support and those who philosophically oppose UBI. UBDI may be referenced as a “Data Dividend” when used in the case of a government-sponsored tax on technology companies. Unlike a tax, when executed in the private sector, UBDI simply shifts the buyers from purchasing data via aggregators to purchasing data directly from users
Sweeping legislation like General Data Protection Regulation, and the California Consumer Privacy Act opened the door to UBDI by creating incentives for brands and businesses to utilize user consented data while also offering them the “right to be forgotten” in regions where the law is applicable.
In 2019 after the legal battle over the California Consumer Privacy Act, Newsom assigned a team to work with national data scientists and legislators to create a "data dividend" — a payment that businesses would make to the state or to consumers if their personal data are sold. The concept has been discussed in Silicon Valley for years as a way to tackle growing income inequality at a time when tech companies have flourished and advances in automation have eliminated jobs.
The proposal was also backed by state Sen. Robert Hertzberg (D-Van Nuys), who co-authored last year’s California Consumer Privacy Act. “I see it as a societal issue. We have the potential to monetize people’s value and ask: How do we create assets that can be enjoyed by the common good?
Companies like UBDI and Datawallet have tried to create tools to give consumers the option to aggregate and monetize the data points they already have on themselves. These systems more proportionally reward data contributions than flat taxes, while also ensuring users have control of the data they create. Companies in this space generally differ in their architecture, the types of data they can aggregate, where the data is stored, and who it is leased or sold to.