Governance models for redistribution of data value

Essay by Maria Savona: “The growth of interest in personal data has been unprecedented. Issues of privacy violation, power abuse, practices of electoral behaviour manipulation unveiled in the Cambridge Analytica scandal, and a sense of imminent impingement of our democracies are at the forefront of policy debates. Yet, these concerns seem to overlook the issue of concentration of equity value (stemming from data value, which I use interchangeably here) that underpins the current structure of big tech business models. Whilst these quasi-monopolies own the digital infrastructure, they do not own the personal data that provide the raw material for data analytics. 

The European Commission has been at the forefront of global action to promote convergence of the governance of data (privacy), including, but not limited to, the General Data Protection Regulation (GDPR) (European Commission 2016), enforced in May 2018. Attempts to enforce similar regulations are emerging around the world, including the California Consumer Privacy Act, which came into effect on 1 January 2020. Notwithstanding greater awareness among citizens around the use of their data, companies find that complying with GDPR is, at best, a useless nuisance. 

Data have been seen as ‘innovation investment’ since the beginning of the 1990s. The first edition of the Oslo Manual, the OECD’s international guidelines for collecting and using data on innovation in firms, dates back to 19921 and included the collection of databases on employee best practices as innovation investments. Data are also measured as an ‘intangible asset’ (Corrado et al. 2009 was one of the pioneering studies). What has changed over the last decade? The scale of data generation today is such that its management and control might have already gone well beyond the capacity of the very tech giants we are all feeding. Concerns around data governance and data privacy might be too little and too late. 

In this column, I argue that economists have failed twice: first, to predict the massive concentration of data value in the hands of large platforms; and second, to account for the complexity of the political economy aspects of data accumulation. Based on a pair of recent papers (Savona 2019a, 2019b), I systematise recent research and propose a novel data rights approach to redistribute data value whilst not undermining the range of ethical, legal, and governance challenges that this poses….(More)”.