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Data Sharing on Data-Driven Markets: a new Study and a Research Project

Recently, I described the latest developments regarding efforts to establish a law mandating data sharing of information on users’ preferences and characteristics on data-driven markets (the economic rationale is here). The post ended with the statement: “We are actually in contact with that political party [in Germany, which made data sharing part of their platforms for the EU elections]. It will be interesting to see whether and how research can have real impact, which may impact the lives of virtually all Internet users (and beyond).”

Now we are a step further. Friedrich-Ebert-Stiftung, a foundation close to Germany’s Socialdemocratic Party, asked me “to develop some recommendations on how the idea can be implemented in legislative practice.” The outcome is a slim 15-page essay, titled “Competition Policy and Data Sharing on Data-driven Markets: Steps Towards Legal Implementation.” It tries to give (preliminary) answers to key questions:

  1. How to identify a data-driven market empirically?
  2. What information should be shared on which market?
  3. How can user information be anonymized and how can re-identification of individuals (technically or legally) be avoided?
  4. Who should share data?
  5. Who should have the right to get access to the shared data? At what price?
  6. How should data sharing be organized? What is the optimal governance structure?

Importantly, the answers given here are (informed) ideas, not fundamental research. But that is coming, too. The German Finance Ministry has commissioned a group of TILEC-researchers (combining expertise in economics, law, econometrics, data science, and consumer research) to study the key questions in the list above more seriously. Specifically, our tasks are:

  1. To develop an empirical test that could be applied by, say, a competition authority, which then could show that a market is “data driven”, or not. This would inform policy makers/regulators whether intervention by mandatory data sharing is innovation improving and, hence, positive for users on that market. We are also asked to apply that test to one industry, as a proof of concept.
  2. We are to develop a governance structure of data sharing, which implies to answer questions 2-6 listed above (and to show that it coincides with EU and German law).

The results of these studies are due in fall 2020. Hence, the saga will be continued.