As an economist working in the field of data protection, I am often asked about the role of economics at the Information Commissioner’s Office (ICO). After all, data protection regulation has its basis in fundamental rights rather than economics, and the ICO neither regulates a privatised network industry (as, for example, the regulators of telecoms or energy do), nor has powers under competition law (as the UK’s Competition and Market Authority (CMA) and Financial Conduct Authority do).

In this article I introduce some foundational economic ideas and terminology, and apply them to data protection. I explain the circumstances in which economists consider that intervention by governments and regulators may be necessary, and demonstrate how they are relevant to understanding a wide range of issues that will be familiar to data protection professionals.