Data Governance Regimes in the Digital Economy: The Example of Connected Cars

Abstract

The Internet of Things raises a number of so far unsolved legal and regulatory questions. Particularly important are the issues of privacy, data ownership, and data access. One particularly interesting example are connected cars with their huge amount of produced data. Also based upon the recent discussion about data ownership and data access in the context of the EU Communication "Building a European data economy" this paper has two objectives: (1) It intends to provide a General economic theoretical framework for the analysis of data governance regimes for data in Internet of Things contexts, in which two levels of data governance are distinguished (private data governance based upon contracts and the legal and regulatory framework for markets). This framework focuses on potential market failures that can emerge in regard to data and privacy. (2) It applies this analytical framework to the complex problem of data governance in connected cars (with its different stakeholders car manufacturers, car owners, car component suppliers, repair service providers, insurance companies, and other service providers), and identifies several potential market failure problems in regard to this specific data governance problem (esp. competition problems, information/behavioral Problems and privacy problems). These results can be an important input for future research that focuses more on the specific policy implications for data governance in connected cars. Although the paper is primarily an economic paper, it tries to take into account important aspects of the legal discussion.

Keywords: Internet of Things, Connected Cars, Big Data, Data Governance, Data Ownership, Data Access

JEL Classification: K23, K24, L62, L86, O33