Data Unions are on the rise — and you should use them

Published in

Unbanx

5 min readDec 1, 2021

The business with personal data is booming, but only for a few powerful tech conglomerates who make billions of our data. New data intermediaries enable individuals to gain control over their data and earn passive income from it. They have the potential to turn the prevalent data governance model upside-down and create an open market for personal data. What are data intermediaries and what is a data governance model? Read on my friend…

What is a data governance model?

In academics, data governance models are defined as “the power relations between all the actors affected by, or having an effect on, the way data is accessed, controlled, shared and used, the various socio-technical arrangements set in place to generate value from data, and how such value is redistributed between actors” [4]. In simple terms, this means who has power over data and who reaps the value created from it. In the context of your own personal data, ask yourself who has the power over it and who gets to earn from it — most likely not you.

The current personal data governance model

Instead, the prevailing personal data governance model is characterised by very unequal power relations and a kind of misalignment of interests between individuals and data collectors [4,7]. We are all quick to sign away the rights to our personal data, usually in return for free services online. Of course, critics have long called out the questionable practices used to acquire personal data, and there are many studies that show how individuals are coerced into consent systematically by powerful data-collecting platforms [e.g. 8,9]. Some well-known keywords here are “consent fatigue” and or so-called “dark patterns” that nudge consumers into consenting to intrusive data policies[10]. After tricking us into consent, data-collecting platforms then go on to monetise our personal data at scale, be it through intermediate products like targeted advertising, credit scores, or through outright selling our data via data brokers. We have described before that this model is inherently unfair and inefficient from an economic standpoint here.

A call for change: “Data as labour”

These power imbalances and resulting issues in the personal data economy have had advocates call for a paradigmatic shift for a while now [1,2]. The essence of this shifting paradigm is captured in the concept of “data as labour” i.e., dignifying the creation of personal data as work [3]. The argument is simple — If data is a universal production factor in the modern economy, its producers (which are often ordinary people) should be paid fairly for it.

Alternative data governance intermediaries are on the rise

A key puzzle piece towards achieving data as labour is the establishment of intermediary organisations that shift our personal data governance model towards empowering individuals in the data economy. Such entities are usually inspired by the formation of labour and credit unions during the ages of large-scale industrialisation and financialisation [2]. This is why they are often referred to as data unions or data cooperatives.

However, names of these data governance intermediaries can be ambiguous, and several academics and NGOs have tried to summarise and group them into different categories (academics here [4][5], Mozilla Foundation here [6]). One useful way to conceptualise them is by the nature of control and decision-making they foster — which can be either individual, collective, or delegated [11].

Graphic adapted from the open data institute (https://theodi.org/article/what-are-bottom-up-data-institutions-and-how-do-they-empower-people/)

Key characteristics of data intermediaries

In practice, these approaches obviously overlap and also differ a lot by the objectives that the data intermediary follows. A data intermediary organisation could be e.g. a group of individuals with a rare medical condition that pool their health data for medical research; a cooperative of citizens that pool their mobility data to improve the public transport infrastructure; or a loose association of individuals that pool their web-browsing data in order to sell it collectively to interested marketers.

However, there are common key concepts across all above examples of data intermediaries. First, they are centred around individuals as key stakeholders and smallest atomic unit, who join individually and on a voluntary basis from the “bottom-up”. Second, they foster value creation that is explicitly enabled by aggregating individual data. The value that data intermediaries derive from aggregate data can be separated broadly into (1) internal use through data analytics or research; (2) donation to research or society out of altruistic motives; or (3) market transactions with buyers for monetary rewards. The last point is central, since it potentially enables universal data income (UDI) for members of data intermediaries.

An open and neutral raw personal data layer

The overarching idea of data intermediaries can be motivated by economic logic. In a maturing data economy, we must split up the vertically integrated data conglomerates in order to create an open market for raw personal data. This is achieved by inserting an intermediating party between individuals and the data economy which aggregates and trades its members’ data in a marketplace. This way, we tear down barriers to entry and make data more accessible, while at the same time letting individuals earn the rewards. This idea is explicitly picked up by the European Commission in its latest Data Governance Act [12] and fits exceptionally well into its strategic vision for a European market for data [13]. We expect substantial regulatory tailwinds for data intermediaries to come. In the future such data intermediaries could exist across all kinds of data verticals, such as financial, browsing, health, and mobility data. Individuals will receive proportional rewards from each of these and will be able to join and withdraw from data intermediaries without friction.

The modern data intermediary is blockchain-enabled

We believe that data intermediaries can trigger a massive re-distribution of economic surplus to individuals in our personal data economy. While the mechanics of distributing data earnings to thousands (or millions) of people simultaneously have been a challenge in the past, the mainstream adoption of blockchain technology solves this problem elegantly. Data earnings can be transferred autonomously via smart contracts and distributed to individuals transparently via micropayments. In fact, we are seeing several blockchain-native data intermediaries emerge and gain huge traction at the moment [14].

Join your first data intermediary

You can be part of this movement and earn universal data income with Unbanks, a pioneer in the space. Unbanks allows you to pool your anonymised banking data with thousands of others in order to earn a passive income from your data. Sign up for the waitlist here and follow us on Twitter to stay informed with the latest updates.

Check out other articles from Unbanks:

This EU and UK legislation allows you to earn from your banking data

What is the personal data market and who has access to it?

Why would anyone ever sell their banking data?