Rebalancing Digital Markets

Introduction

To strengthen consumer protection, country-based innovation, and strategic autonomy, G20 countries should build upon existing regulatory frameworks to ensure that digital consumers can exercise effective control over their verified personal data, who has access to it and on what terms. In an evolving international landscape where control over data increasingly shapes economic power, G20 economies, especially those with sizable populations, can strengthen their position by giving consumers the knowledge and tools to negotiate economic outcomes that align with their interests. This shift will empower individuals and catalyze a new wave of innovation based on the development of business models that prioritize consumers’ interests and well-being.

As outlined in the Innovation for the Digital Economy Architecture (IDEA) framework, the next phase of global digital governance requires enabling citizens with shared interests to be advised by accredited professionals in negotiations concerning the use of personal data. With a fiduciary duty to act in the best interests of digital consumers, these skilled advisers can negotiate usage terms and secure rewards for data processing practices on behalf of citizens, similar to regulated professionals in the financial sector. This approach transforms digital consumers from passive participants into empowered market players, reshaping the digital economy to serve people, not only data aggregators and digital service providers.

Market Imbalance and Consumer Disempowerment

Digital markets are currently dominated by powerful data aggregators, including platforms, data brokers, and artificial intelligence companies. These entities’ data processing practices operate largely without meaningful consumer knowledge or consent. As a result, consumers participate in a hidden barter economy, exchanging vast amounts of personal data for services they perceive as free, often unknowingly and permanently forfeiting control over personal data about them and not sharing in any of the value created from this data. This structure, described as “digital serfdom”, leaves consumers at a severe disadvantage due to power and information asymmetries.

The dominance of data aggregators in data-driven markets also significantly perpetuates harmful data extraction practices that lack adequate transparency and accountability. As a result, competition is undermined, innovation is stifled, and consumer trust and agency are eroded. These market failures stall economic growth and exacerbate digital inequality globally.

Despite existing data protection regulations in various countries and multiple G20 commitments to digital governance, compliance remains superficial due to individual consumers’ limited resources and expertise in enforcing their rights. Digital citizens, particularly from vulnerable groups, lack the necessary expertise and resources to directly negotiate or effectively enforce their data protection rights, leaving them exposed to ongoing exploitation.

Inadequate Enforcement and Restricted Market Access

Existing regulatory frameworks form the backbone of human-centered digital governance development. Yet, these will remain insufficient as long as they don’t target the systemic market failures of the current digital regime. In properly operating markets, consumers or their representatives have the contractual power to litigate the enforcement of terms they have negotiated, but in data serfdom all of the more limited enforcement obligations fall on resource-constrained public bodies. Data protection authorities worldwide face overwhelming caseloads, limited resources, and constrained enforcement capacities. Consequently, data aggregators often treat fines and regulatory actions as operational expenses rather than effective deterrents. This enforcement gap further perpetuates exploitative practices, sustaining systemic vulnerabilities within digital markets.

Further the data serfdom process rewards the monopolization of huge data lakes by data aggregators.  Such data monopolization restricts access for small and medium-sized enterprises (SMEs) and startups, severely stifling innovation and competition. Without equitable access to verified consumer data under transparent conditions, smaller market entrants face insurmountable barriers, significantly limiting the overall dynamism and economic potential of a fully functioning digital market.

Furthermore, continuously updating regulations to respond to rapid technological and commercial shifts among dominant data aggregators places an untenable burden on governments and the G20. Reactive regulatory adjustments alone cannot resolve deep-rooted structural imbalances or effectively empower consumers to assert their digital rights. The lack of structured markets for consumer-focused expertise further entrenches the current imbalance, as citizens cannot realistically develop the level of knowledge required to individually negotiate data rights directly with data aggregators or other digital service providers.

Strategic Actions for Consumer Empowerment and Digital Innovation

We propose the G20 must prioritize consumer empowerment and establish robust market mechanisms through the IDEA framework. Central to this initiative is recognizing consumers’ rights to digital association and enabling skilled advisers to act as fiduciary representatives in negotiating terms of use and derived benefits of consumer data.

The G20 should spearhead governance structures to accredit professionals who can represent consumer interests transparently, accountably, and legally. These fiduciary representatives, analogous to regulated financial advisers, would negotiate usage terms and secure economic and non-economic rewards for processing practices of consumers’ data, effectively balancing market power between consumers and data aggregators.

It is essential to explicitly extend fiduciary duties to all data controllers and processors, ensuring their operations consistently uphold data subjects’ fundamental rights and best interests. To prevent subjective or inconsistent interpretations, fiduciary obligations should be guided by an objective standard grounded firmly in human rights law. Additionally, incorporating audit requirements into existing compliance frameworks for corporations and public entities will ensure data activities are regularly assessed and verified against this clearly defined duty of care, fostering transparency and accountability across the digital economy.

Incentivizing expert professionals to transition from the supply side of the data markets toward consumer advocacy will help build this new citizen-focused advisory sector. This is similar to the emergence over the last decades of expert fiduciaries in the financial services sector. Over time, the IDEA framework would establish a sustainable, market-driven solution that positions consumers as active and effective economic participants. By incentivizing efficient resource allocation based on consumer needs, this proactive market structure would benefit both consumers and businesses through a surge in economic activity.

In the long-term, the fundamental rebalancing proposed by the IDEA framework will foster competition aligned with consumer interests, generating unprecedented flows of locally-developed innovation. Adopting this comprehensive approach will position G20 countries as global leaders in digital governance, where digital services genuinely respond to the articulated needs and priorities of digital users, rather than the other way around.

Call for Action

To rebalance digital markets, catalyze consumer-centered innovation, and ensure a digital economy that prioritizes citizens’ fundamental rights, well-being, and interests, we call on the G20 to adopt the IDEA framework, explicitly recognizing consumers’ digital association rights, guaranteeing their representation through skilled advisers, and extending fiduciary duties to all data controllers and processors.