Property Rights Theory, Bundles of Rights on IoT data, and the Data Act

Abstract

With the advance of smart IoT devices (Internet of Things) the amount of valuable data will increase dramatically for which so far no legal rights exist. In its Data Act (DA) draft the EU Commission proposes new data access and sharing rights for the users of IoT devices. Based upon the economic property rights theory, this article analyzes how the DA would change the bundle of rights on non-personal IoT data. Firstly, we apply the property rights theory (esp. the approach of Barzel) for explaining the status quo of IoT data governance: Through the technical design of their IoT devices the manufacturers can get exclusive de facto control over IoT data. They can technologically capture the data, exclude others from accessing and using this data, and draw value from this data as if they have exclusive property rights on them. Secondly, we analyze how the DA would change this de facto bundle of rights to unlock more IoT data for innovation, competition, and empowerment of users. Three different concepts for the design of this bundle of rights are analyzed and compared: A data holder-centric IP-like concept, a user-centric concept, and the concept of co-generated data. For achieving the objectives of the DA, especially regarding unlocking of data for innovation, bundles of rights should be chosen which reject notions of exclusivity and enable broad access and sharing of IoT data. The current DA proposal with its data holder-centric concept, will not achieve these objectives.