Currently, much of users data are controlled and managed by large technology firms, who has great control over the economy. With the rise of privacy and monetization concerns, attention has been turned to alternative models like data cooperatives. Data cooperatives are “organizations that collect data from its members, process and monetize the pooled data, and compensate the members for their individual contributions.” By design, data cooperatives offer three main benefits to their users: Individual control of who to share and how much to share, competitive compensation, and bargaining power.
Data cooperatives follow the natural rules of economics necessary for healthy growth. For example, they offer economies of scale as many users pool their data together. For the buyers, they also offering a standard mechanism for purchasing such data. By having the data cooperative be in charge of the collection, aggregation, and management of the data, there is a greater inherent trust in its quality compared to individual data silos. There is also a huge potential for value added through data analysis and processing.
However, the article also highlights that for data cooperatives to be sustainable (in light of other potential competitor models), they must ensure of: priority of user privacy first, having fair revenue sharing, and developing an efficient and resilient system which can handle many micro-transactions between buyers and sellers.
