One of the biggest questions about Big Data is: “who owns it?”. How can you use, value, and trade data, without clear property rights?
One of the biggest questions about Big Data is: “who owns it?”. How can you use, value, and trade data, without clear property rights? The European Commission (2017a) recently attempted to answer these questions and others in an official Communication on “Building a European Data Economy”. The objective of this initiative is to foster the best possible use of the potential of digital data to benefit the economy and society. The communication was accompanied by a Staff Working Document on the emerging issues of the European data economy (European Commission 2017b). The documents examine the barriers that impede the free flow of data to achieve a real Digital Single Market.
One of the most fundamental requirements of a capitalist economic system is a strong protection of property rights. This legal artifact affects the efficiency of resource allocation. In most jurisdictions, a title is a bundle of rights in a piece of tangible properties such as physical resources, or non-human animals. It is a prerequisite for any basic market exchange. The industrial revolution relied on more elaborate forms of ownership. The property rights were extended by using patents, trademarks and copyrights to protect intangible properties, such as words, ideas or inventions. It kept working fine even in situations where software started to worth more than hardware. But what happens when data are what matters most?
In the European Union, data are intangible, non-rivalrous goods and as such cannot be captured by the traditional definitions of property law (Drexl 2016). Machine-generated data do not benefit from protection by other intellectual property rights as they do not result of an intellectual effort. In contrast, results of data integration and analytics can benefit from the protection given to the intellectual effort made into the design of the data integration process or the analytics algorithm (software).
There is no comprehensive legislative framework on what rights can be exercised with respect to access to data created by computer processes or collected by sensors (European Commission 2016). There are rules on access to privately-held data in a very limited number of sectors. Beyond the Trade Secrets Protection Directive, there is no legal protection with respect to investments made into the generation or collection of data (Martens 2016). In this unregulated context, commercial activities build on the valuation of non-personal or anonymized data appear extremely risky, even if they have a high potential return on investment.
The European Commission outlined a set of concrete actions to address existing lack of production and barriers to the free flow of data (European Commission 2017a). In this respect, the General Data Protection Regulation (GDPR), that will be enforced as from 25 May 2018, provides for a harmonized and high level of protection of personal data and is the foundation for the free flow of personal data (non-personal data remain outside the scope of GDPR) in the EU.
The objective of this new set of rules is to give citizens back control over of their personal data, and to simplify the regulatory environment for business (European Commission 2017b). The reform intends to allow European citizens and businesses to fully benefit from the digital economy. However, it remains difficult for the authorities to strike the balance between the commitment to the highest standards of protection of personal data and the imperative to guarantee a fair level of ownership of data generated by digital processes.
Drexl, J. (2016). Designing Competitive Markets for Industrial Data in Europe – Between Propertisation and Access, 2016.
European Commission. (2016). Legal study on ownership and access to data.
https://bookshop.europa.eu/en/legal-study-on-ownership-and-access-to-data-pbKK0416811/ The jurisdictions surveyed were: France, Spain, Germany, UK, Italy, Belgium, the Netherlands.
European Commission. (2017a). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on “Building A European Data Economy”.
European Commission. (2017b). Commission Staff Working Document on the free flow of data and emerging issues of the European data economy.
Martens, B. (2016). An Economic Policy Perspective on Online Platforms, JRC Technical Report 2016/05.