The Transnational Data Governance Problem

Abstract

The historical paradigm of data globalization is fragmenting. Fragmentation of transnational data flows and related governance frameworks is emerging globally as the result of evolving differences between major economies, heightened by technological and geopolitical competition and conflicts. The irreconcilable positions of the three major economies and standard-setting jurisdictions – the United States, the European Union, and the People’s Republic of China – are breaking down the global data economy and threaten to fracture its core infrastructure, the Internet. We provide a framework to analyze this emerging landscape and assess its implications. Each jurisdiction is characterized by an evolving and distinct data governance style based on its attitude towards markets and governance, the normative principles supporting the exercise of control over data, and the mode of regulating data. As these domestic governance styles consolidate into competing and conflicting data governance regimes, their transnational export and impact are fracturing the existing transnational data governance paradigm, based on free data movement, and hindering international coordination in the global data economy. We characterize this dynamic as the wicked problem of transnational data governance, as no single solution can address it. The paper highlights three approaches to address this wicked problem: (1) a bilateral approach that draws from the riparian system for water rights; (2) a plurilateral approach allowing the free circulation data along sector-specific regulatory coalitions; (3) a multilateral approach, entailing a hard law Digital Bretton Woods or a soft law Digital Stability Board. The implementation of a combination of these approaches offers a basis for a workable foundation for transnational data governance that harnesses the benefits of data globalization without undermining domestic sovereign priorities.