Digitalization has created a new resource class: anti-rival resources. This has large ramifications for the data economy and digital markets. While anti-rivalry remains largely unrecognized in public discourse, new commons-based initiatives and distributed ledger technologies (DLT) are gaining ground. This grassroots development is happening alongside the Commission’s efforts to implement  digital strategy through initiatives like the Digital Services and Data Governance Act and regulatory framework for blockchain. Yet these policies are still largely based on artificial scarcity, hindering the full potential of digital goods and a functioning data economy.

The third policy observatory session of ATARCA focused on these as part of The European Big Data Value Forum (EBDVF) in Prague, Czech Republic on November 21-23 2022. With a central theme of “At the Heart of the Ecosystem for Data and AI” the EBDVF enabled the Observatory to exploit synergies with wider stakeholders of the European big data community. The goal of the session was to:

• Present the potential of anti-rival digital goods in solving extractive practices of the contemporary data economy
• Explore blockchain and other DLTs as tools to build a more fair and sustainable data economy and present use cases of DLTs for good
• Validate and co-create together the policy recommendations for the EU in order to move towards a digital economy which serves the needs of society and the planet.

DIVING DEEPER

The event started with a brief introduction to anti-rival digital goods, followed by a commentary on how anti-rivalry relates to the European Data Act by Leevi Saari, an political advisor to MEP Miapetra Kumpula-Natri. He emphasized that anti-rivalry is quite well-aligned with European values and data policies, even if not explicitly recognized. Creating artificial data scarcity leaves the benefits of data in the hands of only a few agents. Mr. Saari noted that with the Data Act, the EU aims to promote a flourishing data economy and to grasp the positive externalities of data for the wider society. This is exemplified in Chapter V of the Data Act and its focus on business-to-government data sharing as a public interest. The Anti-rival properties of data is also refelcted in  other European legislation such as the provisions of data altruism within the Data Governance Act.

Following this, the event explored provisional policy recommendations for anti-rival economics and European data policies through a presentation by Anna Björk, a research area lead at Demos Helsinki. The recommendations contribute to a fair, sustainable and well functioning digital economy by:

• Identifying the nature and benefits of anti-rival digital goods; and
• Pointing out the opportunities of DLT and tokens to promote new incentives and mechanisms for anti-rival economy

The recommendations encompass two dimensions in particular:

• New socio-economic approaches, models and practices; and
• Leveraging DLT for the desired societal changes.

The recommendations are divided into five distinct domains:

1. REGENERATIVE DIGITAL ECONOMY OF THE EU: Incorporating values, conditions and approaches of a commons-based economy to the digital and economic policies of the EU and experimenting with new governance methods and models for digital economy
2. SOCIOTECHNICAL R&I INVESTMENTS: R&I investments to support inclusive sociotechnical approach to anti-rival economics and technologies
3. ANTI-RIVAL DATA GOVERNANCE: Data governance and regulation to support the incentives, mechanisms and coordination of anti-rival resources
4.  BUSINESS AND VALUE CREATION MODELS: New business models to enable anti-rival compensation mechanisms in order to incorporate societal benefits in the value creation of digital economy
5. LOCAL COMMONS EXPERIMENTATION: Utilising DLT for decentralised, democratic community collaboration and for promoting grass-roots cooperatives through education and resources

Each domain consists of three to four recommendations for a total of 17 recommendations. The recommendations themselves also have multiple, more specific sub-recommendations within them. At the event, participants could offer more detailed comments on the policy recommendations through the online platform Mural.

DECIPHERING ANTI-RIVALRY 

After introducing the recommendations, they were opened up for a panel discussion led by  Marten Kaevats, the Co-Founder of GovStack and former National Digital Advisor of the Government of Estonia, and Joshua Davila, a Blockchain Solutions Architect at Settlemint. Davila has been researching novel economic models inspired by cooperatives through the use of decentralised technologies while Kaevats is an expert on open-source and re-usable building blocks for digital governance.

Joshua Davila noted that the mainstream view still treats data as a commodity, which also characterizes the crypto and DLT scene. While DLTs can enable local experiments with real democratic input, they are most often  used to exacerbate exploitative market structures and speculative financial asset bubbles. This has been seen most concretely with non-fungible tokens (NFTs) such as Bored Ape Yacht Club which commoditize digital goods that are fundamentally anti-rival by their nature. New concepts and practices within the digital economy are therefore needed to overcome commodification. Kaevats pointed out that embedding anti-rivalry into the data economy requires using scalable open source data, as exemplified in Estonia and GovStack. Deploying DLTs at a granular level is therefore a key to enabling anti-rival Web3 services.

In terms of the draft recommendations presented, Davila noted the importance of local, bottom-up DLT experimentation through cooperatives. The European Union should continue to be more cautious regarding big platforms within the DLT and blockchain context as well, as they have been with the Digital Markets Act. For Kaevats, governance architectures are needed to improve the scalability of DLT solutions. One provocative solution would be to tokenize everything, down to people’s shoe sizes, as a way to lessen bureaucracy and enable more seamless services. For Davila, there’s a danger to this: tokenization and commodification of everything on the market would have adverse social effects. Moreover, having everything on the chain increases the chance of cryptographic surveillance and discriminatory profiling.

Looking into the future and how EU policies could foster a fair data economy, Kaevats remarked that while DLTs are not necessarily about ownership, digitalisation of rights enables one to bake anti-rivalry into the system. For example, full ownership over one’s data would give you power to grant others access to it in a more secure and seamless manner than moving the data to a different server. While this is based on an individualistic concept of data, it can create communities as well, as seen with the MyData movement. For Davila, there’s merit to technology neutrality, and the EU regulation should likely not favor a particular technology over another given the volatile nature of DLTs. However, fundamental technology such as zero-knowledge proofs could have an important role to play in the future.

The event was hosted by Johannes Mikkonen and Atte Ojanen from Demos Helsinki. We wish to thank everyone for their participation and will see you at the final policy observatory session during ATARCA final seminar week in March 2023!