Abstract
This paper examines the competition effects of data portability among online platforms, providing policy recommendations for the preservation of innovative, undistorted competitive markets. Based on a platform-data model, it is illustrated how users, data and the products of a platform are related. Platform markets which entail an especially high risk of market power abuse are determined. It is concluded that the right to data portability as in the EU's General Data Protection Regulation has to be interpreted in a nuanced fashion in order to avoid adverse effects on competition and innovation.
Highlights
Multi-sided online platforms such as social networks, search services and trading platforms are capable of creating enormous benefits for societies and economies
Many of the calls for new regulatory provisions for online platforms overlook the particular characteristics of platform markets such as network effects and switching costs
The General Data Protection Regulation (GDPR) for the EU partially fails to account for these peculiarities
Summary
Multi-sided online platforms such as social networks, search services and trading platforms are capable of creating enormous benefits for societies and economies. This paper offers a potential way out by analysing platform-specific competition effects It focuses on one of the key drivers of switching costs, namely the extent to which data is portable from one platform to another. The fact that online platforms have an interest to keep their systems closed can lead to access problems for other companies that need user data in order to provide competing or complementary products and services. The contribution of this paper is that it examines the effects of the right to data portability on competition, providing policy recommendations for the preservation of innovative, undistorted competitive digital markets. This paper discusses in which platform markets the risk of an abuse of market dominance is high Based on this assessment, platform markets are determined where the right to data portability is likely to foster competition and innovation
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