• CFRED CUHK Law

Establishing a public trust for data, the most important asset of our time

Aziz Huq - University of Chicago Law School


-- Personal data is the foundation of much important commercial activity. In the United States alone, the dominant social-media and search platforms have a market capitalization of more than four trillion dollars. For entities such as Facebook and Google, profits accrue mainly by mining the personal data generated by their users. These data are warehoused and circulated among data brokers, advertisers, political campaigns, and sovereign governments. As it moves, this data accumulates into a valuable asset. It feeds the machine-learning algorithms that allow Amazon to predict purchases, Netflix to estimate views, and governments to anticipate crime. Its predictions drive interventions such as targeted advertising, prompts to digest political disinformation, or decisions to arrest suspects, bail denial to some, and keep yet more behind bars. Rich rewards flow to the firm best positioned to leverage these new information aggregates.


At the same time, it is widely recognized that these new ‘personal data economies’ have social as well as purely commercial effects. Put simply, they risk both significant negative spillovers, while also presenting opportunities for public-good production. Facebook, Google, and the like are routinely criticized for spoiling privacy, aggravating economic inequality, reducing competition, and undermining democratic self-rule. At the same time, their data can be tapped for broad social benefit—as the unfurling of Covid-19 track-and-trace systems in Asia has demonstrated. Yet these ‘public good’ effects of big data are often missed.


Puzzlingly, the asset that lies at the heart of these new economic regimes does not have a clear status as the ‘property’ of either individual users or firms. Although large firms employ contract, trade secret, and like private-law regimes to shield their interests, they strikingly do not assert that they are “owners” of the data: Indeed, there is a real question whether “data,” understood as pure information, can be subsumed within a personal-property regime, at least as a matter of U.S. law. And while there have been influential proposals to create a personal property interest in data since the 1990s, they have consistently been stymied by practical and legal difficulties.


In a new article, “The Public Trust in Data,” forthcoming in the Georgetown Law Journal, I propose an ‘old-new’ property regime that enables commercial exploitation of personal data, while also vesting users with an effective tool to limit their negative externalities, and exploit their positive externalities. Provinces, subnational states, and municipalities, I argue, should create “public trusts” as governance vehicles for their residents’ personal data. An asset in “public trust” is owed and managed by the state subject to judicially enforceable controls on use and alienation. The asset can both be used by the general public or made available for controlled commercial exploitation. Either way, it remains subject to the state’s abiding obligation “to protect the people's common heritage” and to ensure that an asset remains in good shape.


How would this work? Already certain cities—including Barcelona and New York—require some firms to hand over personal data about their citizens as a condition of being licensed in the jurisdiction. Under a public trust regime, this would be generalized: Personal data generated though location-based apps, social media, and the like by a jurisdiction’s residents would be the property of the city, even if it was held on a firm’s servers. The city would be empowered, within the limits of the public-trust doctrine, to enact rules limiting its commercial exploitation to prevent harmful spillovers, and requiring its availability for the production of public goods. Cities could also coordinate to fashion general regulatory regimes governing personal-data use.


All this sounds novel only because we have lost sight of the fact that firms in platform economies do not know the asset they exploit. We have also lost sight of intellectual resources supplied by the common law. But the idea of a “public trust” dates back to Roman law: It is found in both English and American law. (And I would be delighted to hear if there are analogs in other jurisdictions’ statute books). Over time, the “public trust” doctrine has been used for a wide variety of assets: oysters, fishing rights, beaches, groundwater, lakes, and public parks. It has therefore demonstrated its flexibility, and hence its capacity to handle new and different assets.


The challenge today is to find a way to adapt it to the most important asset of our time.

31 views0 comments

Recent Posts

See All

Collectibles Tokenization & Optimal Security Design

Blair Vorsatz – The University of Chicago Booth School of Business -- Collectibles like art, wine, and classic cars have long interested investors, both for their attractive return profiles and for th

Blockchain Initiatives for Tax Administration

Young Ran (Christine) Kim - University of Utah -- As blockchain technology develops, it has grown beyond the early stages of single use case, such as Bitcoin. Defined as a distributed, immutable, peer