The Selection of Models and Institutional Construction for Fiduciary Duties of Data Trustee

Abstract

As an institutional innovation emerging from the interplay between data protection and trust mechanisms, data trust demonstrates significant potential in the big data era while simultaneously challenging traditional fiduciary duty frameworks. There are two models of data trust: the U.S. “information fiduciary theory” model and the UK’s “data trust” model. China could adopt a hybrid operational model for data trust, where the trustor and trustee establish a data trust relationship through a trust agreement. The trust company acts as the trustee to fulfill fiduciary duties, while public regulatory authorities oversee data trust operations. Under this model, the trust company and data users are the primary entities responsible for fulfilling fiduciary duties.

In addition to duties of loyalty and care, fiduciary duties should also include the obligation to ensure the security of the trustor’s data while promoting the full circulation of data to realize its value as an asset. When a data trust institution breaches its fiduciary duties, the burden of proof shall shift to the trustee, and the doctrine of presumed liability shall apply. Additionally, a dedicated regulatory authority shall establish licensing requirements for data trust institutions.