Regulating the Economic Impact of Data as Counter-Performance: From the Illegality Doctrine to the Unfair Contract Terms Directive

Abstract

In economic terms, personal data functions as an equivalent for monetary compensation in many exchanges of the digital economy. However, data’s properties strikingly differ from those of money. This contribution therefore starts by analysing the economic properties of personal data and methods for measuring its value. This leads to two specific legal questions. First, data has a strictly positive economic value even when its transfer violates the GDPR. This paper argues that such GDPR-infringing transfers still ought to constitute valid counter-performance and fall under the scope of the Directive on Contracts for the Supply of Digital Content and Digital Services. The illegality doctrine, which would lead to the invalidity of the contract, should not be applied. Second, the Unfair Contract Terms Directive forms an important part of the regulatory perimeter for exchanges including data as counter-performance. Building on the inherent indeterminacy of data’s value, the paper explores how the unfairness assessment of that directive can be applied to the data price of such exchanges. It concludes by suggesting that a right to “data-free” services may be a valuable option going forward.

Keywords: data as counter-performance, Directive 2019/770, directive on certain aspects concerning contracts for the supply of digital content and digital services, DCDS Directive, dara protection law, illegality doctrine, unfair contract terms, data price, data-free services, value of data, unfairness

JEL Classification: K10, K12, K42