Competition Problems and Governance of Non-personal Agricultural Machine Data: Comparing Voluntary Initiatives in the US and EU

Can Atik and Bertin Martens

No 2020-07, JRC Working Papers on Digital Economy from Joint Research Centre

Abstract: The arrival of digital data in agriculture opens the possibility to realise productivity gains through precision farming. It also raises questions about the distribution of these gains between farmers and agricultural service providers. Farmers’ control of the data is often perceived as a means to appropriate a larger share of these gains. We show how data-driven agricultural business models lock farm data into machines and devices that reduce competition in downstream agricultural services markets. Personal data protection regulation is not applicable to non-personal agricultural machine data. Voluntary data charters in the EU and US emulate GDPR-like principles to give farmers more control over their data but do not really change market-based outcomes due to their legal design. Third-party platforms are a necessary intermediary because farmers cannot achieve the benefits from applications that depend on economies of scale and scope in data aggregation. The low marginal value of individual farm data in such applications puts farmers in a weak bargaining position. Neutral intermediaries that are not vertically integrated into agricultural machines, inputs or services may circumvent monopolistic data lock-ins provided they can access the data. Unless they find a way to generate and monetise economies of scale and scope with their data, their business model may not be sustainable. Regulatory intervention that facilitates portability and interoperability might be useful for farmers to overcome data lock-ins, but designing data access rights is a complicated issue as many parties contribute data to the production process and may claim access rights. Minor changes in who gets access to which data under which conditions may have significant effects on stakeholders. We conclude that digital agriculture still has some way to go to reach equitable and efficient solutions to data access rights. Similar situations are likely to occur in other industries that rely on non-personal machine data.

Keywords: Digital data; data access and ownership; digital agriculture (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-agr and nep-big
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