Principles for a Data Economy

The Principles for a Data Economy – Data Rights and Transactions are a transatlantic legal project carried out jointly by the American Law Institute (ALI) and the European Law Institute (ELI). The Principles for a Data Economy deal with a range of different legal questions that arise in the data economy. Since data is different from other tradeable items, the Principles draw up legal rules for data transactions and data rights that take into account the interests of different stakeholders involved in the data economy. The Principles are designed to facilitate contractual relations as well as the drafting of model agreements and can guide courts and legislators worldwide.

The project proposes a set of Principles that can be implemented in any legal system and is designed to to work in conjunction with any kind of data privacy/data protection law, intellectual property law or trade secret law. The Principles do not address or seek to change any of the substantive rules of these bodies of law.

The Project Team consists of Neil B Cohen and Christiane Wendehorst (as Project Reporters) and Lord John Thomas as well as Steven O. Weise (as Project Chairs).

Characteristics of data

The law governing trades in commerce has historically focused on trade in items that are tangible like goods or on intangible assets, such as shares or licenses. However, data does not fit into any of these traditional categories, nor does it qualify as a service. It is often unclear how traditional legal rules and doctrines can apply to data, as data is different from other assets in many ways. For example, data can be multiplied at basically no cost and can be used in parallel for a variety of different purposes by many different people at the same time (data is a “non-rivalrous” resource). Uncertainty regarding the applicable rules to govern the data economy may inhibit innovation and growth and trouble stakeholders like data-driven industries, start-ups, and consumers.

Stakeholders in the data economy

Stakeholders in the data economy – a simplified overview

The Principles have taken the basic types of players and relations which can be found in data ecosystems as a starting point to provide guidance in different situations. The central actors in the data economy are data controllers (also called “data holders”). They are in a position to access the data and decide for which purposes and means this data should be processed. A controller may exercise control all by itself or share it with co-controllers, such as under a data pooling arrangement. Data processors provide the processing of data on a controller’s behalf as a service. Another important group of stakeholders includes those that contribute to the generation of data (e.g. data subjects). Other players in the data economy include data assemblers or data intermediaries (e.g. data trusts).