Jacopo Piemonte
De Berti Jacchia Franchini Forlani, Milan
j.piemonte@dejalex.com

The premise: the 'data-driven' economy

It has correctly been argued that data (personal or non-personal) are becoming the new oil.^[1]

This is surely not an overstatement.

For example, taking personal data into consideration, if a company can gain access to the web data related to the preferences of its consumers, it could exploit this information to propose similar products to the same consumers. Likewise, non-personal data are a key asset. In this regard, reference can be made to data related to streets’ conditions (indeed non-personal data). Companies operating in the automated vehicles industry could, for example, greatly leverage on this information for improving more and more the development of artificial intelligence systems applied to the operation of self-driving cars.

It is then essential for businesses to retrieve personal or non-personal data in the digital dimension. The entities in possession of such assets can get an incredible advantage on the market over their competitors.

The current legislative background

Nevertheless, there is certainly the need for regulating the above phenomenon and the use of such data (both personal and non-personal).

The European Union Legislator has always been at the forefront in this regard.

A few years ago, it already enacted the General Data Protection Regulation^[2] (“GDPR”), which has since become the “benchmark” for the rest of the world on the protection of personal data. As a matter of fact, many countries around the world adopted legislative frameworks which are similar to the GDPR.^[3]

Europe has also enacted a less famous (but still relevant) regulation on the use of the non-personal data.^[4]

In this new era in which the digital dimension is becoming overwhelming, Europe has once again “stood out from the crowd”. Within its new “digital strategy”, the European Legislator is enacting new regulations that will focus, inter alia, on rising issues such as the use of data on online platforms (with the so-called “Digital Service Act” and “Digital Market Act”) and in artificial intelligence systems (by way of the “Artificial Intelligence Act”).^[5] Also in this case, it is very likely that in different parts of the world legislative frameworks related to these topics will soon be enacted echoing European initiatives in this regard.

The wide array of disputes coming out from the “data driven” economy

It can be predicted that the online dimension and the “data driven” economy will certainly continue to generate more and more disputes all around the world (also related to the legislative frameworks mentioned above).

Therefore, it is interesting to investigate whether arbitration can find space in such a new arena of data disputes.

In this regard, it is necessary to make one point at the outset of the discussion.

So far, given that there is a misconception that most disputes arising in this field would not be arbitrable, the interrelations between data and arbitration have probably been analysed to a limited extent.

There is some merit to this position. It is undeniable that (at least from a European “GDPR perspective”) a wide proportion of personal data-related disputes (especially related to the violation of privacy of physical persons) can be adjudicated either by national data protection authorities or by the national courts.

On the other hand, this view is rather restrictive and does not take into consideration the new developments of the “data driven” economy. As a matter of fact, in the digital dimension there will be an increase in other disputes related to personal or non-personal data that may be considered perfectly arbitrable.

In this regard, for example, reference shall be made to data sharing agreements by way of which companies may envisage to share certain data sets under certain conditions. Disputes may arise from such agreements and there is no reason why they should not be considered arbitrable.^[6]

The same holds true for activities related to the storing of data. In this case, customers entrust the data centre with the storage of data through an agreement that sets out the conditions and highlights, for example, when the data centre may be liable for “mismanagement” of the data. Also in this case, it is possible to submit to arbitration any dispute that may arise between the parties under such relationships.^[7]

The reasons as to why arbitration would be the perfect tool to resolve such disputes

It is a fact that there will be a constant increase in arbitrable disputes related to the digital dimension.^[8]

Therefore, the question to be answered is whether arbitration in this area may be considered a more convenient dispute resolution mechanism than court litigation.

In this regard, it is noted that there may be several positive factors related to the use of arbitration for such incoming data disputes.^[9]

First, data law is a peculiar area which requires a great deal of preparation. It is not granted that national judges would have the necessary skills to face such issues. By choosing to submit their disputes to arbitration, the parties would have the possibility to “choose” arbitrators which are knowledgeable of the field.

Moreover, the disputes brought before national courts could take years to be solved. This is certainly not in line with the speediness required by the digital world. Companies working in the digital environment (usually start-ups) cannot wait such a long time and require fast reactions. Arbitration could then provide solutions to such needs by being a flexible instrument.

Finally, data disputes can be very international (developing in the digital space). If an arbitration clause was inserted in all data-related agreements with a certain party, then it would be possible to litigate multiple disputes by consolidating them in just one arbitration.

Conclusions

Considering the above, we can conclude that arbitration may have great potential in the new “market” related to data disputes which are developing in the online world.

That being said, the “arbitration community” shall be ready to tackle such a challenge.

In this regard, it would be ideal to create more discussion forums with digital industry end-users (for example, with ad hoc conferences) to try to explain why arbitration would be a perfect dispute resolution mechanism to be inserted in their contracts.

Obviously, it would be necessary to build a rapport of mutual trust between stakeholders in this “dialogue”, which is also considerate of the data environment and how particular the criticalities related to it are.

From this perspective, one cannot underestimate how important it is for arbitration practitioners to develop new expertise in areas (such as, for example, GDPR and data law) that are “historically” considered out of the technical knowledge that an arbitration lawyer should have.

An outside, impartial expert assessing damages and offering an opinion is often a vital part of the dispute resolution process. Quantification of damages can be a very complex matter that requires experience in the field under review. Consequently, arbitral tribunals place some importance on the evidence of a competent independent expert evidence when apportioning damages.