Abstract
We study the case of a Chinese industrial policy, implemented in Shanghai that makes it mandatory for car manufacturers to share electro-mechanical performance and real time navigation data from their entire fleet of electric and hybrid vehicles with local and central government authorities. This policy seeks to prevent fraud in state subsidies, reduce emissions, assess the performance of New Energy Vehicles and strengthen the competitiveness of Chinese manufacturers of these vehicles. We argue that economies of scope in data aggregation may provide traditional market failure arguments in favor of government intervention and mandatory data pooling. Our paper illustrates how data access regimes could be used for economic competition. The EU and China pursue similar data sharing and pooling policy goals that hinge on economies of scope in data aggregation. However, they follow very different political processes to achieve these goals.
Highlights
During the US Senate hearing on the Cambridge Analytica case in April 2018, Marc Zuckerberg, Facebook CEO, argued that, if the US would follow the EU’s strict privacy regulation, Chinese competitors may gain the upper hand in technological competition1
Unlike in China, they are not designed to promote innovation or industrial competition between firms or countries. These B2G data sharing initiatives may have impact at the firm level when data, or the insights and knowledge derived from data, would spill over to other firms or when the policy initiatives to which the data contribute would have a differential impact on firms
This paper examines a case of data regime competition
Summary
During the US Senate hearing on the Cambridge Analytica case in April 2018, Marc Zuckerberg, Facebook CEO, argued that, if the US would follow the EU’s strict privacy regulation, Chinese competitors may gain the upper hand in technological competition. The government’s mandatory data pooling overcomes these obstacles and generates economies of scope from the aggregation of complementary datasets This B2G data regime is in the public interest because it can increase innovation-driven social welfare for all, including manufacturers and drivers. Roberts et al (2019) argue that an important difference between EU and Chinese approaches to data regimes is that the EU prioritizes individual privacy, commercial confidentiality and respect for private interests This makes it easier for EU car manufacturers to push back against major data sharing initiatives when it does not suit their private interests. It shows how the Shanghai database could affect electric vehicle manufacturers and consumers in China, compared to their counterparts in the EU.
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