If data is non-rival and excludable, and therefore tends towards monopoly, then there is a trade-off that needs to be analyzed between increasing responsiveness to consumer demands and decreasing price gouging. The traditional defence of natural monopolies staying private is that they are still more responsive to consumer needs than governments because consumers still have a choice – though a limited one – of whether or not to purchase the product. It is harder the get money from a consumer in natural monopoly context than it is to get revenue from taxation. While it does not speak directly to responsiveness to consumer needs, the EU’s conclusion that its distinct database rights (distinct from say, copyright protection) did not increase production of databases casts doubt on the private sector’s responsiveness to economic incentives in this context. Therefore, policy solutions should at least involve less private sector business control of data. This could be achieved by increasing government provision of data or by encouraging farmers form cooperatives and share data, as done by social enterprises like Abalobi.

The comment below is posted on behalf of Joshua Toews

Common sense would suggest that increasing supply of data would increase access to data. Increasing supply would decrease the price, making it more accessible. But even if policy makers find a way to increase the supply of data, there are two problems. First, databases may not be good substitutes for one another. This would limit the competition between database sellers, therefore limiting the downward pressure on the price. Second, to the extent that the databases are good substitutes, this contributes to duplicating work and therefore overall economic inefficiency. Data is non-rival so producing two similar datasets is a waste of time.

In addition to being non-rival, data is also excludable. In this sense, it is similar to infrastructure like telephone lines. This poses a sharing problem as the market for data is likely to tend towards a natural monopoly. If it is firms, rather than governments, that capitalize on a first mover advantage, it is unlikely that these monopolies will fall into the hands of actors who are amenable to sharing the data openly

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E-Consultation Moderators