Data Governance in Connected Cars

Author:Wolfgang Kerber
Position::Professor of Economics, Marburg Centre of Institutional Economics, School of Business & Economics, University of Marburg, Germany
Pages:310-331
SUMMARY

Through the application of the technological solution of the "extended vehicle" concept, the car manufacturers can capture exclusive control of the data of connected cars leading to serious concerns about negative effects on competition, innovation and consumer choice on the markets for aftermarket and other complementary services in the ecosystem of connected and automated driving. Therefore, a... (see full summary)

 
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2018
Wolfgang Kerber
310
3
Data Governance in Connected Cars
The Problem of Access to In-Vehicle Data
by Wolfgang Kerber*
© 2018 Wolfgang Kerber
Everybody may disseminate this ar ticle by electronic m eans and make it available for downloa d under the terms and
conditions of the Digital P eer Publishing Licence (DPPL). A copy of the license text may be obtain ed at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Wolf gang Kerber, Data Governance in Connected Cars: The Problem of A ccess to In-Vehicle Data, 9
(2018) JIPITEC 310 para 1.
Keywords: Data governance; connected cars; data economy; data access
the ecosystem of connected and automated mobility.
The paper offers an overview about this policy dis-
cussion and analyzes this problem from an economic
perspective by utilizing a market failure analysis. Be-
sides competition problems (especially on markets
for aftermarket and other services in the connected
car) and market failures in regard to technological
choice (extended vehicle vs. interoperable on-board
application platform), information and privacy prob-
lems (“notice and consent” solutions) can emerge,
leading to the question of appropriate regulatory so-
lutions. The paper discusses solutions through data
portability, data rights, competition law, and recom-
mends a sector-specific regulatory approach.
Abstract: Through the application of the tech-
nological solution of the “extended vehicle” concept,
the car manufacturers can capture exclusive con-
trol of the data of connected cars leading to serious
concerns about negative effects on competition, in-
novation and consumer choice on the markets for
aftermarket and other complementary services in
the ecosystem of connected and automated driv-
ing. Therefore, a controversial policy discussion has
emerged in the EU about access to in-vehicle data
and the connected car for independent service pro-
viders in the automotive industry. This paper claims
that this problem should be seen as part of the gen-
eral question of the optimal governance of data in
A. Introduction
1 Connected, automated (and later autonomous) cars
can lead to large benets both to users of cars and
to society, such as more convenience, reduction of
accidents, congestion and emissions. Connected and
automated driving is a technological revolution not
only for the automotive industry (and their business
models) but also for the mobility in society. Therefore,
a policy discussion has emerged in the EU and within
the Member States on how to enable connected and
automated driving. The recent EU Communication
“On the road to automated mobility: An EU strategy
for mobility of the future” offers a broad overview
about the challenges and problems that have to be
solved.1 There are many open regulatory questions
* Professor of Economics, Marburg Centre of Institutional
regarding safety and cybersecurity risks, liability
problems, ethical questions, standardization and
interoperability problems, privacy concerns, and
the governance of data, especially data access.
2
This article focuses on the question of the governance
of the huge mass of data produced in connected cars.
An important part of this data governance problem
is the current controversial policy discussion
Economics, School of Business & Economics, University of
Marburg, Germany; Email: kerber@wiwi.uni-marburg.de.
1 See EU Commission, A European strategy on Cooperative
Intelligent Transport Systems, a milestone towards
cooperative, connected and automated mobility, 30.11.2016,
COM(2016) 766 n.; EU Commission, On the road to
automated mobility: An EU strategy for mobility of the
future, 17.5.2018, COM(2018) 283 n.; Bundesregierung,
Strategy for Automated and Connected Driving, 2015.
Data Governance in Connected Cars
2018
311
3
about “access to in-vehicle data and resources”
for independent providers of services within the
ecosystem of connected and automated mobility.2
The car manufacturers (OEMs: original equipment
manufacturers) use the so called “extended vehicle
concept” that implies transmitting all data produced
in the car directly to proprietary servers of the OEMs
granting them an exclusive (“monopolistic”) control
of these data. Many rms within the ecosystem of
connected and automated mobility could provide
a wide range of services to the cars owners and
drivers if they also have access to the in-vehicle
data. These independent service providers – as well
as consumer associations – are concerned that this
“privileged” position of the OEMs allows them to
control the automotive aftermarkets and adjacent
services leading to less competition, less consumer
choice and less innovation. Therefore, the current
policy discussion focuses on this conict between
the OEMs, who defend their extended vehicle
concept with safety and security arguments, and
the many independent service providers, who
demand regulatory solutions regarding access to in-
vehicle data and connected cars for ensuring fair and
undistorted competition concerning the provision of
services in the ecosystem of connected driving. The
most important proposals are either – in the short-
term - a non-discriminatory governance solution for
the in-vehicle data (e.g., a “shared server”) or in the
long-term, the transition to another technological
solution (on-board application platform), which
would allow the car owners to control access
to in-vehicle data and the car. Although the EU
Commission acknowledges the problem that the
“centralisation of in-vehicle” data in the extended
vehicle concept might trigger a competition problem
and wants to improve access to these data, so far
only a recommendation with guidance on non-
binding principles for access to in-vehicle data has
been planned.3
3 Although the current policy discussion is primarily
about access to in-vehicle data and resources for
independent service providers, the problem of
nding an appropriate governance solution for
data in the ecosystem of connected and automated
mobility is a much more complex problem. One
important problem is the fact that most in-vehicle
data are also personal data that are subject to the
requirements of EU data protection law. Due to non-
rivalry in the use of data - i.e. that many rms can
use the same data for their services and innovations
2 See C-ITS Platform, Final Report, 2016; TRL, Access to In-
Vehicle Data and Resources – Final Report, 18.05.2017;
and as overview Specht/Kerber, Datenrechte – Eine
rechts- und sozialwissenschaftliche Analyse im Vergleich
Deutschland – USA, 2018, available at: <http://www.abida.
de/de/blog-item/gutachten-datenrechte-eine-rechts-und-
sozialwissenschaftliche-analyse-im-vergleich>, 169-192.
3 EU Commission 2018 (n 1) 13.
- the question arises whether an exclusive control
of in-vehicle data through one stakeholder in such
a complex ecosystem of connected driving with
so many different stakeholders is an economically
efcient governance solution for these data. Or
should a more sophisticated data governance
solution be chosen, which allows more stakeholders
to get access to these data as a valuable input for
their services and innovations? This economics of
data perspective is directly linked to the recent
discussion about data rights and the efforts of the
EU Commission for better data access and reuse.
4
However, any solution has to also comply with EU
data protection law for protecting the privacy of
the car users. This article claims that the problem
of access to in-vehicle data should be seen as part
of the more general question concerning how a
comprehensive governance solution for the data
that are produced in the ecosystem of connected
and automated mobility should look like.
4
The objective of this article is to provide (1) an
overview about the current discussion about access
to data in the connected car (section B), (2) an
economic analysis of the data governance problem
that asks for potential market failure problems
(section C), and (3) a discussion about possible policy
approaches for dealing with the data governance
problems (section D).
5
The analytical approach used in this article is an
economic analysis of potential market failures that
can arise in the ecosystem of connected driving and
which might make regulatory activities necessary
for solving the data governance problems. One of the
potential market failure problems are certainly the
competition problems that might be caused by the
exclusive control of in-vehicle data in the extended
vehicle concept on the markets for aftermarket and
complementary services. In that respect, an analysis
of competition between OEMs is also necessary.
A second potential market failure refers to the
question of whether it can be expected that OEMs
choose technological solutions that are optimal for
the entire ecosystem of connected and automated
driving, such as, the extended vehicle concept or
the on-board application platform. Based upon the
insights of the economics of interoperability and
standardization, serious doubts arise concerning
whether OEMs have the right incentives for making
optimal technological decisions. An additional third
concern is that car users as consumers might run
4 See EU Commission, Building a European data economy,
10.1.2017, COM(2017) 9 n.; EU Commission, Towards
a common European data space, 25.4.2018, COM(2018)
232 n.; and as overview Kerber, Rights on Data: The EU
Communication “Building a European Data Economy”
from an Economic Perspective, in: Lohsse/Schulze/
Staudenmayer, Trading Data in the Digital Economy: Legal
Concepts and Tools, 2017, 109-133.

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