[The Editors' Verdict] Data Economy and Legal Systems

As the saying goes, "Data is a resource" or "Big data is the oil of the 21st century," the importance of data is growing day by day, not only in industry but also in the public sector and the lives of individual citizens. In fact, industries based on economic activities rarely seen in traditional sectors, such as markets trading data and building new business models using data, are being formed. According to the Korea Data Industry Promotion Agency, the total market size of the domestic data industry in 2019 was 16.8693 trillion KRW, growing 8.4% compared to the previous year. From 2019 to 2025, it is expected to grow at an average annual rate of 11.3%, exceeding 32 trillion KRW by 2025.

However, questions have been raised about whether existing laws and regulations can contribute to forming an efficient and innovative market that reflects the characteristics of the data economy. Since laws and regulations have mainly been established concerning traditional goods, there may be limitations in applying them directly to the data economy. For example, traditional goods are primarily based on scarcity and have diminishing returns to scale as a basic form, whereas data production volume is rapidly increasing, and the cost of production is decreasing, resulting in increasing returns to scale, which is a significant difference.

So far, discussions related to data in Korea have mainly focused on personal information protection. From the perspective of competition law, much discussion is still needed. Reviewing existing laws and regulations related to data, efforts have been made to improve the system by establishing frameworks to protect data subjects and granting the minimum necessary possibilities for utilizing intelligent information technology. However, at this point where markets based on data are practically being formed, discussions are also needed on how to address regulatory issues arising from changing competitive situations. In particular, from the perspective of competition law, it is essential to find ways to harmonize the existing competitive order with the data economy and to discuss systems that can guarantee the free use of data in the data economy. Discussions are also necessary on individual regulatory methods for rights holders ranging from data producers to users, including issues such as compensation for data creators and processors while promoting data sharing and mobility.

The starting point for these discussions should be establishing appropriate data economy governance. While a certain system is in place from the perspective of personal information protection, discussions need to be deepened from the viewpoint of treating data as a single commodity. One of the issues to consider at this point is that it is still too early to clearly classify the forms of economic activities in the data economy, and there is insufficient analysis of what regulatory acts are subject to regulation and the associated risks. The guarantee of corporate autonomy, such as private-led autonomous technology development, must also be taken into account.

Considering these issues, it is necessary to review a form of regulation where public entities and market actors share roles at each regulatory stage, rather than top-down regulation, allowing the expertise of market participants to play a role. The basic contents related to joint regulation between market actors and public entities and the minimum requirements for the healthy operation of the data economy system should be legally regulated. The decision and execution of detailed regulatory content could be entrusted to self-regulatory organizations composed of market actors. Effective discussions on new legal and institutional systems that respond to the data economy era are essential to strengthen the competitiveness of the data industry.

Shin Minsu, Professor, Department of Business Administration, Hanyang University