Specifying and assigning "bundles of rights" on data: An economic perspective

This paper shows that with respect to data the legal category of "property" (physical property or intellectual property) is not a suitable model for dealing with the complexity of data governance problems. Although data can be a valuable asset and might need incentives for its generation, the economic and technological conditions regarding data differ significantly from the problems regarding physical goods, innovation, and creative works. Through the much easier excludability and the greater importance of the nonrivalry and context-dependency of the use of data, not the incentive problem for data generation but the problems of access and sharing of data have become the most urgent policy issues. One particularly important reason can be the exclusive de facto control of firms over data, for which no formal property rights exist, but which can lead to market failures with respect to competition and innovation. The "bundle of rights" approach (based upon the economic theory of property rights) with its flexibility and wide range of options, how to specify these rights and to whom these rights can be assigned, offers a framework that allows for finding appropriate data governance solutions that fit to the specific economic and technological conditions of different industries and contexts. The paper also shows that current digital policy discussions can be interpreted as discussions about the proper specification and assignment of bundles of rights on data (as, e.g., with regard to the GDPR, data portability or the Digital Markets Act).