Fairness in the exchange of "data for services" in the data protection regulation of the EU and the USA

• Applicants: Professor Dr. Benedikt Buchner; Professor Dr. Jürgen Kühling
• Subject Area: Public Law ; Private Law
• Term: since 2021
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 463332313

The topic of 'data for services' and the fair commercial handling of data has gained significant momentum since the initial proposal was drafted and approved. While the judicial and regulatory assessment is still in its infancy, the meta-judgment of the ECJ (Case C-252/21, 4 July 2023) has set a milestone. The Court recognized the exchange of "data for services", thus the "payment" of the social media service through the provision of personal data. At the same time, the ECJ mandated the availability of an alternative payment model based on "money for service" and the "appropriateness" of these payment options – at least for market-dominant companies. Currently, "pay-or-consent" models are being developed. As part of the renewal proposal, parameters will be developed to assess the fairness of the exchange ratio in different scenarios and for comparable services and goods. Additionally, since the start of the project pursued with the initial proposal, several new regulations have emerged in the US – starting with the data protection law in California. These regulations explicitly address the subject of the initial proposal from a statutory perspective and are only now coming into force. This will not only lead to an application practice in the US but also will make the analysis fruitful for the European legal framework and influence the business models for the processing of data. This renewal proposal has four objectives: (1) First, to review/classify the business models of relevant companies in the US and the EU, which are developing dynamically as a result of the latest legal requirements and decisions. (2) Second, a comprehensive analysis of normative developments in the US will be conducted, building on previous work. This will include an evaluation of the academic discussion of these statutes and rules, as well as the expected application practice of companies, authorities, and courts. (3) Third, the decision-making practices of the EU in response to the development of business models will be critically analyzed. (4) Fourth, normative parameters for assessing the legality of self-determined decision-making sovereignty models will be developed at the interface of data protection, contract, and antitrust law. This will build on the fundamental-rights based model proposed earlier and include findings from the field of rate regulation. Methodologically, this involves a normative and comparative legal analysis based on real-world data of relevant business models.

• DFG Programme: Research Grants