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How can the EU harness data as an economic production factor?

Publishing date
20 January 2025
Authors
Bertin Martens
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How can the EU harness data as an economic production factor?

There is considerable room to improve existing EU data regulations in order to achieve efficient data market outcomes, for example by simplifying EU data market regulations, reducing compliance costs and addressing market fragmentation. Executive-Vice President Henna Virkkunen has been tasked with proposing “a European Data Union Strategy drawing on existing data rules to ensure a simplified, clear and coherent legal framework for businesses and administrations to share data seamlessly and at scale, while respecting high privacy and security standards”.


In a new paper, I recommend a series of measures to achieve efficient data-market outcomes. 
 

In particular, reusing and pooling existing data could be a major source of efficiency gains. These gains, however, are curbed by exclusive data control rights and high transaction costs. Improvement of existing EU data regulations could tackle these problems:

  1. Standardised machine-readable consent notices and real-time data transfers could reduce the lack of transparency and high transaction costs that prevent the exercise of meaningful, informed consent.   
  2. The European Health Data Space governance regime contains an almost-ideal governance regime for health data re-use and pooling initiatives that could be applied in other sectors.
  3. The Data Act facilitates access to and re-use of product data, but exclusive licensing rights for data holders, monopolistic pricing of third-party transfers and other anti-competitive measures in the act reduce its impact. Expanding its application to services data would make it a truly horizontal data-market regulation.
  4. The Digital Markets Act contains several obligations for platforms to grant platform users access to their own data. Widening access to network interaction data would ensure a level playing field between platforms and their users.
  5. The Artificial Intelligence Act imposes unwarranted and costly restrictions on the re-use of copyright-related content data for AI model training data, reducing the innovative impact of AI. The text and data mining exception in the EU Copyright Directive could be broadened to address these challenges.   

EU data regulation is steeped in tension between exclusive private rights and the wider societal value of data. Finding an acceptable balance may call for some redistribution of gains between data users and data collectors.

Read the Policy brief, 'Using data as a production factor: policy ideas for a new EU data strategy' by Bertin Martens.

 

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About the authors

  • Bertin Martens

    Bertin Martens is a Senior fellow at Bruegel. He has been working on digital economy issues, including e-commerce, geo-blocking, digital copyright and media, online platforms and data markets and regulation, as senior economist at the Joint Research Centre (Seville) of the European Commission, for more than a decade until April 2022.  Prior to that, he was deputy chief economist for trade policy at the European Commission, and held various other assignments in the international economic policy domain.  He is currently a non-resident research fellow at the Tilburg Law & Economics Centre (TILEC) at Tilburg University (Netherlands).  

    His current research interests focus on economic and regulatory issues in digital data markets and online platforms, the impact of digital technology on institutions in society and, more broadly, the long-term evolution of knowledge accumulation and transmission systems in human societies.  Institutions are tools to organise information flows.  When digital technologies change information costs and distribution channels, institutional and organisational borderlines will shift.  

    He holds a PhD in economics from the Free University of Brussels.

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