The political economy of data value and the DGA

SPRU - SCIENCE POLICY RESEARCH UNIT

The political economy of data value and the DGA

Maria Savona SPRU, University of Sussex and Dpt. Economics, Luiss University

SPRU - SCIENCE POLICY RESEARCH UNIT

Three questions on the political economy of data value • ONE: • Firms can collect, aggregate and own database as intangible assets (rationale to maintain incentives to innovate) (EU Directive 96/9/EC) Can ownership (agency) be recognized to individuals over their personal data?

Fallacy of division?

• TWO: • If individuals can own their personal data (a club good), how to create incentives for data sharing for public goods (i.e. health, research)?

Which individual rights would create incentives to share?

• THREE: • If effective incentives for data sharing are created, how do we appropriately protect privacy?

Are we missing other fundamental rights by over-focusing on privacy?

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Whose data?

Data value, Privacy and Data (Property) Rights • Data protection laws are centered around personal data; • Their primary purpose is privacy safeguards, they do not imply active use rights, therefore do not allow trade of data (Specht and Zerbst, 2018).

• Property rights imply the active right to use the owned good and clash with what is guaranteed by data protection laws: • In Europe privacy is a fundamental inalienable right, and cannot be sold or traded (Van Lieshout, 2015; Lynskey, 2015; Zander et al., 2019).

• Firms have long been able to monetise personal data based on granted property rights over database à intangible assets • EU Directive 96/9/EC of 11 March 1996 recognises the legal ownership of database to firms, with database property rights being a legal category implemented here

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Proposal for a Regulation of the EP and EC on European Data Governance (25/11/20) (DGA) • Main objective: To foster the availability of data for use by increasing trust in data intermediaries and by strengthening data-sharing mechanisms across the EU: • “Making public sector data available for re-use, in situations where such data is subject to rights of others; • Sharing of data among businesses, against remuneration in any form; • Allowing personal data to be used with the help of a “personal data-sharing intermediary”, designed to help individuals exercise their rights under the GDPR • Allowing data use on altruistic grounds” (regulated in art. 35-36)

• However: • (art 24) states that “the rights under GDPR can only be exercised by each individual and cannot be conferred or delegated to a data cooperative” (…) “data cooperatives could also provide useful means for one-person companies, micro, small and medium-sized enterprises that in terms of knowledge of data sharing, are often comparable to individuals”

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Unresolved issues • Individuals are “comparable” to micro enterprises (art. 24), which seems to clash with the EU architecture, centered on individual rights • EU DGA aims to address a typical market failure, that of a “missing data markets” by facilitating creation of “personal data sharing intermediaries” markets • Are the incentives of data intermediaries compatible with the aim of increasing trust?

• What is their minimum scale to ensure full social benefit of “altruistic” data sharing (again, health, research)? Can we regulate altruism?

• What is the safe maximum scale that data intermediaries should have to avoid issues of value concentration, large tech power asymmetries?

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Readings 1.

Savona (2020a) Governance of data value. Policy@Sussex, March 2020.

2.

Savona (2020) Governance Models for Redistribution of Data Value. VOX CEPR 17 Jan 2020

3.

Savona (2019a) If data are the new oil how can their value be shared fairly? Policy@Sussex Blog, April 2019

4.

Savona, M. (2019b). The Value of Data: Towards a Framework to Redistribute It. SPRU Working Paper Series (SWPS), 201921: 1-22. ISSN 2057-6668. Available at: www.sussex.ac.uk/spru/swps2019-21.

5.

Savona, M. (2020b). The Saga of the Covid-19 Contact Tracing Apps: Lessons for Data Governance, SWPS 2020-10 (June) .