Author: Ivanina Mancheva
The study discusses data protection and property rights in terms of how value is created. The paper highlights specific features of the data: Data are public goods. Their value is not defined in advance, but their processing requires significant upfront investment. The data-based economy relies on network externalities that depend on user participation. Critical questions arise such as who should hold the property rights of data collected through various devices, processed by AI, combined with other pieces of information, etc. What are the economic justifications for the introduction of property or other rights over data? Disclosures about the misuse of personal data led to new regulations like the GDPR. But the research shows that without clarity about the contribution of various participants in the value chain and their rights, new regulations could prove to be a challenge. On the other hand, the uncertainty about property rights undermines innovation.
JEL: D23, D46, D82, H40