Secondary Use of Personal Data: An Economic Analysis

Abstract

The European Commission is currently overhauling the most important instrument for the regulation of cross-border flows of personal data, the Data Protection Directive of 1995 (Directive 95/46/EC). Among the most tedious legal issues is the use of personal data for secondary purposes. Such use occurs if data collected for one purpose (such as credit granting) are later used for another purpose (e.g. insurance contracting). While secondary purposes are regulated under the current regime, the implementation across European countries differs. I analyze these differences and discuss cases from Germany, Ireland and The Netherlands. Moreover, using theory it is analyzed what type of regulatory regime could be welfare enhancing for consumers.