Private sector trust in data sharing: enablers in the European Union

Abstract

Enabling private sector trust stands as a critical policy challenge for the success of the EU Data Governance Act and Data Act in promoting data sharing to address societal challenges. This paper attributes the widespread trust deficit to the unmanageable uncertainty that arises from businesses’ limited usage control to protect their interests in the face of unacceptable perceived risks. For example, a firm may hesitate to share its data with others in case it is leaked and falls into the hands of business competitors. To illustrate this impasse, competition, privacy, and reputational risks are introduced, respectively, in the context of three suboptimal approaches to data sharing: data marketplaces, data collaboratives, and data philanthropy. The paper proceeds by analyzing seven trust-enabling mechanisms comprised of technological, legal, and organizational elements to balance trust, risk, and control and assessing their capacity to operate in a fair, equitable, and transparent manner. Finally, the paper examines the regulatory context in the EU and the advantages and limitations of voluntary and mandatory data sharing, concluding that an approach that effectively balances the two should be pursued.

Keywords

• data altruism
• data asymmetry
• data governance
• data intermediaries
• data sharing