People should be "empowered" to sell their own data if they want to, to share in the profits of technological advances, Sir Vince Cable has said.
The Liberal Democrat leader said data was "the new oil" yet people were happy to give it up for free.
He also said regulators should consider breaking up tech giants like Facebook and Amazon and that an independent standards body should monitor content.
Facebook has been under fire over its handling of personal data.
The social media network has been under scrutiny following revelations that up to 87 million users may have had their data harvested by political marketing firm Cambridge Analytica without their consent.
Sir Vince told an audience at the the CodeNode tech events centre that data ownership and privacy rights should be strengthened.
But the former business secretary said there was a "fundamental economic issue of whether any company which uses data from individuals to make money should pay the owner of that data for its use".
"The new oil is data. Data is the raw material which drives these firms and it is control of data which gives them an advantage over competitors," he said.
"It is astounding that people have been so happy to give up something so valuable without charge.
"If individuals were paid every time their data is used anywhere in the world ... there would be a mechanism for redistributing the profits of those with most to gain from technological advances, into the pockets of those who are most likely, in the short term at least, to lose."
And he said "empowering" people to choose where to sell their personal data meant it would "no longer be monopolised by the tech giants".
Sir Vince also said the EU's General Data Protection Regulation, which comes into force (WHEN), was a "belated" effort to establish the right principles around privacy rights.
And he suggested regulators should look at breaking up tech giants like Facebook, Google and Amazon adding that the EU was "probably the only body with the clout to take these decisions".
"National government and, even more so, supranational bodies like the EU can and should look to break up enterprises where size is detrimental to the economic well-being of the country, its citizens and its capacity for innovation."