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Business-to-Business data sharing: An economic and legal analysis

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This paper presents a legal and economic analysis of business-to-business (B2B) data markets. It starts from the economic characteristics of data and explores to what extent private B2B data markets result in a socially optimal degree of data sharing, or whether there are market failures in data markets that might justify public policy intervention. It examines the conditions under which monopolistic data market failures may occur. It contrasts these welfare losses with the welfare gains from economies of scope in data aggregation in large pools. It also discusses other potential sources of B2B data market failures due to negative externalities, risks and transaction costs and asymmetric information situations. In a next step, the paper explores solutions to overcome these market failures. Private third-party data intermediaries may be in a position to overcome market failures due to high transactions costs and risks. They can aggregate data in large pools to harvest the benefits of economies of scale and scope in data. Where third-party intervention fails, regulators can step in, with ex-post competition instruments and with ex-ante regulation. The latter includes data portability rights for personal data and mandatory data access rights.

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  • Bertin Martens & Alexandre de Streel & Inge Graef & Thomas Tombal & Nestor Duch-Brown, 2020. "Business-to-Business data sharing: An economic and legal analysis," JRC Working Papers on Digital Economy 2020-05, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:202005
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    Cited by:

    1. Yiquan Gu & Leonardo Madio & Carlo Reggiani, 2022. "Data brokers co-opetition [The impact of big data on firm performance: an empirical investigation]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 820-839.
    2. CARBALLA SMICHOWSKI Bruno & DUCH BROWN Nestor & MARTENS Bertin, 2021. "To pool or to pull back? An economic analysis of health data pooling," JRC Working Papers on Digital Economy 2021-06, Joint Research Centre (Seville site).
    3. Bertin Martens & Bo Zhao, 2020. "Data access and regime competition a case study of car data sharing in China," JRC Working Papers on Digital Economy 2020-08, Joint Research Centre (Seville site).
    4. Claudia Biancotti & Oscar Borgogno & Giovanni Veronese, 2021. "Principled data access: building public-private data partnerships for better official statistics," Questioni di Economia e Finanza (Occasional Papers) 629, Bank of Italy, Economic Research and International Relations Area.
    5. Nebbiai, Matteo, 2022. "Intermediaries do matter: Voluntary standards and the Right to Data Portability," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 11(2), pages 1-28.

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    More about this item

    Keywords

    data markets; data ownership and access rights;

    JEL classification:

    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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