Overview
Title
To require the Securities and Exchange Commission to promulgate regulations relating to the disclosure of certain commercial data, and for other purposes.
ELI5 AI
The DASHBOARD Act of 2024 wants companies to tell people how much their information is worth, how it's being used, and let them delete it if they want, while also making sure to show the total value of this data in money terms to make everything clear and fair.
Summary AI
H.R. 8531, also known as the "DASHBOARD Act of 2024," requires the Securities and Exchange Commission (SEC) to develop new rules for how companies, known as commercial data operators, share information about the value of the personal data they collect from users. The bill mandates that these companies must regularly inform users about the economic worth of their data and how it's used, while providing ways for users to delete their data if desired. Additionally, large companies must disclose the aggregate value of user data in their financial reports. Finally, the SEC will create guidelines to ensure consistent valuation of user data across different companies and require qualitative and quantitative disclosures to safeguard investors and the public.
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AnalysisAI
Overview of the DASHBOARD Act of 2024
The DASHBOARD Act of 2024, formally known as the "Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data Act," is a proposed piece of U.S. legislation aimed at bolstering transparency in how commercial data operators manage and disclose user data. Introduced in the House of Representatives, this bill mandates the Securities and Exchange Commission (SEC) to enforce regulations requiring data operators to reveal the economic value of user data and provide mechanisms for users to understand and control their data.
Key Provisions
Commercial Data Operators
The bill imposes several requirements on commercial data operators. These entities must provide users with regular assessments of their data’s economic value, disclose the types of data collected, and offer the means to delete data. It also designates violations as unfair practices under the Federal Trade Commission's (FTC) jurisdiction, with the FTC required to establish implementing regulations.
SEC Disclosures
The legislation requires amendments to the Securities Exchange Act of 1934, compelling companies classified as commercial data operators to report the aggregate value of user data in financial reports, ensuring transparency. The SEC is also tasked with developing standardized methods for valuing user data, considering differences across sectors and business models.
Significant Issues
One primary issue is the broad definition of a "commercial data operator," which might lead to ambiguity about which entities are actually subject to the new rules. Additionally, calculating the economic value of user data consistently across different operators is complex and may result in disputes or confusion.
Another concern is the exceptions provided for data deletion, such as "legal obligation" and security reasons, which are not clearly defined. This ambiguity could allow operators to broadly interpret and potentially misuse these exceptions to retain user data.
The bill sets a threshold of 100,000,000 unique monthly users for reporting requirements, potentially excluding significant entities that may manage valuable user data but do not meet this threshold.
Impact on the Public
Broadly, the bill aims to provide the public with greater transparency regarding the use and value of their personal data. By requiring clear and regular disclosures, users are intended to have a better understanding of the data economy and how their data is leveraged.
Impact on Stakeholders
Positive Impacts
For consumers, this represents a major step towards greater transparency and control over personal data. As users become more informed about data practices, they can make more educated decisions about their online presence and data sharing.
Investors could benefit from more detailed disclosures about companies' data management, allowing for better assessments of investments, especially as data becomes increasingly pivotal in business valuations.
Negative Impacts
The compliance burden on small to mid-sized companies might be considerable, potentially increasing operational costs due to the extensive reporting and regulatory requirements dictated by the legislation.
Large tech companies, often managing vast amounts of user data, could face increased scrutiny and pressure to maintain transparent practices, which might lead to strategic shifts or alterations in data-driven business models.
In conclusion, while the DASHBOARD Act of 2024 seeks to advance data governance and user empowerment, its successful implementation will depend on how these issues—particularly definitions, valuation methodologies, and data control provisions—are addressed through forthcoming regulations.
Financial Assessment
The bill, known as the "DASHBOARD Act of 2024," primarily focuses on how commercial data operators disclose information about user data rather than involving direct financial expenditures or appropriations. However, it involves significant discussions on the monetary value of user data and its implications for businesses and users.
Financial Valuation of User Data
One of the notable references to money in the bill involves the economic valuation of user data. The bill mandates that commercial data operators must provide users with an assessment of the economic value placed on their data. This requirement implies a need for these companies to develop methodologies to calculate this value consistently. The challenge lies in ensuring accurate and comparable valuations across different operators, which aligns with the issue of potential confusion or disputes due to inconsistent data valuation methods.
Disclosure Requirements
The bill requires commercial data operators that meet certain criteria to disclose the aggregate value of user data in their financial reports. This includes contracts with third parties for collecting user data and other items deemed necessary for investor protection. These disclosures aim to bring transparency to the financial significance of user data in business operations. The regulatory framework proposed by the SEC is intended to create comparable and reliable data valuation standards, which could mitigate some of the issues related to ambiguity in current definitions and thresholds for data operators.
Contractual and Revenue Thresholds
The bill establishes specific financial thresholds, such as disclosing contracts valued at more than $10,000,000 for data-related activities. Additionally, it mentions the acquisition of user data valued at over $100,000,000 during the reporting period. These thresholds aim to capture major financial transactions involving user data, which ensures that significant commercial actions are transparent to investors and regulators. However, setting such thresholds could potentially exclude smaller yet significant data operators, which is a concern raised in the issues section.
SEC's Role and Challenges
The SEC is tasked with developing regulations to ensure consistent data valuation and required disclosures. This involves significant procedural adjustments and amendments to regulatory codes, like section 229.306 of Title 17, within a year. The breadth of changes necessary to achieve the bill’s objectives suggests a considerable administrative burden on the SEC, aligning with concerns about the feasibility of implementing comprehensive changes in such a timeline.
In summary, while the bill does not involve direct financial appropriations, it emphasizes the monetary aspects related to user data and necessitates clear financial disclosures from commercial data operators. These evaluations and disclosures are designed to enhance transparency and comparability within the industry, but they also raise challenges in definition specificity and operational implementation.
Issues
The definition of 'commercial data operator' is broad and lacks specificity, which could lead to ambiguity in determining which entities are subject to the regulations (Section 2, Section 3, Section 4).
The economic valuation of user data is required, which may be challenging to quantify consistently across different operators, leading to confusion or potential disputes (Section 3).
The provisions for user data deletion are vague regarding exceptions under 'LEGAL OBLIGATION' and 'NECESSARY FOR SECURITY INCIDENTS,' allowing for potential broad interpretation and misuse (Section 3).
Using a threshold of 100,000,000 unique monthly visitors or users for disclosure requirements could exclude significant commercial data operators that manage valuable user data but do not meet this threshold (Section 4).
The term 'any information that identifies, relates to, describes' in the 'user data' definition is very broad, which increases compliance complexity (Section 4).
Long sentences with multiple clauses in the legislation may make it difficult for entities to comprehend their specific responsibilities under this act (Overall text).
Requiring the SEC to amend section 229.306 of title 17, Code of Federal Regulations, within a year may be challenging due to the broad scope of changes needed (Section 4).
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of this act gives it a short title, allowing it to be referred to as the “Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data Act of 2024” or simply the “DASHBOARD Act of 2024”.
2. Definitions Read Opens in new tab
Summary AI
This section defines important terms for the Act, such as "Commission," which refers to the Securities and Exchange Commission, and "issuer," which takes its definition from the Securities and Exchange Act of 1934. It also mentions that terms like "commercial data operator," "user," and "user data" are defined under a specific section of the same Act.
3. Commercial data operators Read Opens in new tab
Summary AI
The section outlines requirements for commercial data operators, including providing users with information about the value and types of data collected, and allowing users to delete their data, with some exceptions for legal and security reasons. It also states that violations will be considered unfair or deceptive acts, subject to enforcement by the Federal Trade Commission, which will issue related regulations within a year.
4. SEC disclosures Read Opens in new tab
Summary AI
The section amends the Securities Exchange Act of 1934 to require companies, called commercial data operators, to report the total value of their user data if it's significant. These companies must also disclose details about their data protection measures, risk assessments, sources of data, and revenue from user data, and the Commission is tasked with creating rules to standardize how this data's value is calculated and reported.
Money References
- quantitative and qualitative disclosures about the value of user data held, including— (1) technical and legal measures in place to protect user data held by the commercial data operator; (2) an assessment of financial and legal risks associated with storing the type and quantity of user data held by the commercial data operator; (3) each source of user data held by the commercial data operator, whether by sale, a direct consumer relationship, an indirect consumer relationship, or other means; (4) each discrete revenue generating operation of the commercial data operator and any subsidiary or affiliate that relies on user data; (5) the entry into any contract valued at more than $10,000,000 with a third party for the collection, licensing, or sharing by the third party pursuant to an agreement with the commercial data operator; (6) the amount of revenue derived from obtaining, collecting, processing, selling, using or sharing user data during the reporting period; (7) how changes in the measurement of aggregate fair value of user data affect the reported performance and cash flows of the issuer; and (8) any acquisition of user data in the preceding reporting period valued at more than $100,000,000. (c) Report.— (1) IN GENERAL.—Not later than 3 years after the date of enactment of this Act, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on— (A) the nature, timing, and extent of the disclosure practices of commercial data operators; (B) an assessment of the valuation methodologies and practices employed by commercial data operators in developing and submitting disclosures to the public; (C) an evaluation of the methods of delivery and presentation of the disclosures required by this Act, and the amendments made by this Act; and (D) recommendations for the improvement of the methods described in subparagraph (C), including developing standards to enhance comparability and utility for investors.