Data Portability and Interoperability – OECD COMPETION DIVISION – June 2021 OECD discussion
This document discusses data portability, interoperability, and competition. It notes potential benefits like addressing durable market power, reducing switching costs, and enabling new entrants. However, it also outlines limitations such as providing little value if data scope is limited or network effects are not addressed. Data portability works best in markets where individual data is valuable, incumbents control data without major investments, some competition exists, and privacy is not a major limiting factor. Interoperability can promote competition but also risks entrenching existing business models or granting influence to incumbents. It works best in markets that are not rapidly evolving and focuses on specific dominant firms with oversight. The document also discusses how these issues relate to enforcement of abuse
Data Portability and Interoperability – OECD COMPETION DIVISION – June 2021 OECD discussion
- 1. Presentation by the Secretariat Data portability, interoperability and competition 1 James.MANCINI@oecd.org
- 2. Data portability and competition 2 Potential benefits • Address data as a source of durable market power • Reduce switching costs and lock-in • Enable multi-homing • User-initiated • Drive competition on data analysis vs. collection • Enable comparison services Limitations and risks • Little value to entrants if scope or frequency of data is limited, or if multi-user datasets are needed • Does not address most network effects • Risks regarding transparency • Potential frictions in process • May unintentionally harm new entrants So data portability is best focused on markets in which: • Individual-level data is valuable and can be clearly-defined • Incumbents hold data without significant investments • Some competition is already present • Scope is not seriously limited due to privacy or other limitations
- 3. Interoperability and competition 3 Potential benefits • Promote competition either among platforms or within platforms (unbundling) • Enable continuous data portability • Reduce user lock-in • Enable multi-homing and mixing and matching • User-initiated • Enable entry in downstream/related markets Limitations and risks • Could entrench existing technologies or business models • May grant additional influence to incumbents • Might disincentivise innovation • Could enable collusion • May not have an impact if behavioural biases are unaddressed • Security risks So interoperability measures are best: • Tailored to markets that are not rapidly evolving • Focused on specific dominant firms • Subject to implementation oversight
- 4. Portability and interoperability in enforcement 4 Abuse cases Theories of harm • Degradation of interoperability o Bundling o Exclusivity o Input foreclosure o Exploitative abuse • Degradation of portability o Margin squeeze o Bundle discount o Input foreclosure Remedies Merger cases Theories of harm • Vertical integration and interoperability risks • Vertical integration and data access • Conglomerate mergers with overlapping user bases • Horizontal effects Remedies Collusion Collusion to limit interoperability/portability Risks from interoperability initiatives
- 5. Portability and interoperability in regulation and advocacy 5 Sector regulation • Banking (e.g. Open Banking, PSD2) • Utilities • Digital sector proposals Horizontal regulation • Data protection (e.g. GDPR) • Consumer protection • Encouraging data- sharing to encourage productivity Advocacy • Advocating for regulatory measures • Market investigation tools