The dilemma and resolution of data circulation in China: Is data as consideration the solution?

Abstract

The circulation of data presents a significant challenge to the development of China's digital economy. On data exchanges, trading activity has declined. Off-exchange, stringent barriers between data-sharing consortia have resulted in data silos, producing crises of trust and legitimacy. Treating personal data as consideration, by incentivising individuals' motivation to share data through both financial gain and the protection of their personal rights, can establish a robust and comprehensive legal basis for extensive commercial data processing. Accordingly, this connects primary and secondary data element markets, facilitates data circulation, and strengthens the real economy. In the legal framework of personal data as consideration, the agreement between users and enterprises constitutes a bilateral contract, wherein individuals are obliged to "provide personal data and/ or authorise processing" as counter-performance. Through this exchange, enterprises, predicated on user authorisation, can secure one or more rights to hold, use or operate the data, thereby achieving a separation of data property rights. The data property rights enterprises acquire are governed by the principle of registration confrontation. The data subject's inheritors, prior or subsequent parties in transactions, and infringers are all third parties that could be confronted absolutely, while a subsequent licensee's ability to confront a prior licensee hinges on whether the pre-existing data property rights have been registered. Even when data property rights derive from a non-exclusive licence, the enterprise can still confront the bankruptcy administrator and proceed with data processing.