Do Non-competing Data Intermediaries Matter? A Property Rights Perspective

In the era of big data, data transactions are getting increasingly common and intricate. Our study explores the phenomenon of government-oriented data intermediaries, which act as platforms to facilitate data transactions and enhance social welfare in China. Our study contributes by applying two-sided market theory to compare the performance of these intermediaries with one-to-one data transactions, and by analyzing how property rights are determined and allocated in data transactions on government-oriented data intermediaries. We find that centralized property rights enforcement adopted by Chinese data intermediaries lowers transaction costs and agency problems, reduces information asymmetry and bargaining power imbalance, providing a fair and efficient trading environment for data suppliers and demanders. In this way, Chinese government ensures data security and credibility, safeguards data suppliers’ ownership and control rights, and regulates data demanders’ usage rights and restrictions, and minimizes conflicts and disputes. By promoting data sharing and exchange, the framework of government-oriented data intermediaries will stimulate innovation and economic growth in China. We also provide several policy implications and suggestions, such as developing suitable contractual clauses, choosing an optimal transaction modes among market, vertical integration and hybrids, and ensuring property rights enforcement.