UC Davis Study Reveals Why Sharing Data Between Tech Rivals Can Be Winning Strategy

Specialist Firms Can Ease Competitive Pressure from Tech Giants

Quick Summary

Provides a practical framework to assess when data sharing benefits both sides without eroding competitiveness.

DAVIS, Calif.--(BUSINESS WIRE)--In today’s data-driven economy, firms typically guard their data as a crown jewel of competitive advantage. But new UC Davis research suggests that, under certain conditions, the smartest move may be to share that data—even with rivals.

The study “The Strategic Value of Data Sharing in Interdependent Markets,” co-authored by UC Davis Graduate School of Management Distinguished Professor Hemant Bhargava, was published in June in the journal Management Science.

Their research provides a groundbreaking framework showing how smaller, specialized firms can protect their market position against Big Tech giants like Google and OpenAI by strategically opening their data vaults.

“Data sharing can look like surrender, but in fact it can be a powerful strategy,” said Bhargava. “It reduces pressure from generalist rivals by making them stakeholders in the specialist’s survival. At the same time, it offers policymakers new insights into how to encourage competition without stifling innovation.”

Bhargava and co-authors demonstrate why such data-sharing mandates might not only level the playing field, but also—paradoxically—strengthen smaller firms.

Their model shows that by granting access to their market data, specialist firms can turn a formidable rival into a “coopetitor.” Instead of competing aggressively, the larger generalist firm softens its approach because it now benefits from the specialist’s continued success.

Mobvoi partners with Google Cloud

The study highlights real-world examples such as smartwatch maker Mobvoi, which shares user data with Google Cloud. This unusual partnership helped Mobvoi improve product quality while reducing direct competitive conflict with Google’s own wearable devices.

Researchers also issue a warning, however: while firms may profit from data sharing, consumers don’t always benefit. Softer competition can result in higher prices and less innovation. For regulators, this underscores the need for a nuanced approach. Mandatory data sharing is not a one-size-fits-all solution, researchers said.

As competition in digital markets continues to heat up, this study provides a timely, rigorous lens for understanding when and why sharing data might just be the savviest competitive move of all, Bhargava said.

Co-authors of the study include Antoine Dubus, ETH Zurich, Department of Management, Technology and Economics; David Ronayne, European School of Management and Technology, 10178 Berlin, Germany; and Shiva Shekhar, Information Systems and Operations Management Department, Tilburg School of Economics and Management, Tilburg, Netherlands.