Is Data Portability the Answer To Anti-Competitive Practices?

Can data portability reduce anti-competitive practices and empower consumers to try new services in the market? Tech companies like Facebook and Google support data portability, but is that enough for fair competition? Let’s find out.

For decades, the tech industry has grappled with anti-competitive practices that have stifled innovation and growth. Such practices have even affected end-users with fewer choices and services in the market. 

To address the anti-competitive behavior in the tech market, federal agencies and policymakers have taken reins in their hands and tried to break up the Big Four tech companies (Google, Amazon, Facebook, and Apple) who have been a constant threat to free competition in the market. Currently, big tech firms have massive user data sets that give them an edge over startups and new players in the market. To end anti-competitive practices and market dominance, lawmakers rolled out the data portability act in 2018.

Currently, the right to data portability is introduced in the European Union’s General Data Protection Regulation (GDPR), U.S.’s California Consumer Privacy Act (CCPA), Australia’s Consumer Data Right (CDR), India’s Personal Data Protection Bill 2019, and Brazil’s Article 18.

Data portability is an approach to boost competition between digital platforms and increase consumer choice. It allows users to transfer their digital data (applications and personal data) created on one platform to another rival platform. This approach enables users to have more control and visibility over their data and freedom to switch services between platforms.

Tech News: What’s the Future of Tiktok If Oracle or Microsoft Buys It?

A classic example that affected users was the 2018 #DeleteFacebook campaign, which sprouted from the Facebook-Cambridge Analytica data breach. The campaign shed light on the fact that users didn’t have a feasible option to switch to a new social media platform without data portability.

Additionally, data portability establishes a ground for fair competition between existing players and new players. A similar practice of data portability is implemented in regulated industries, such as financial services. Jurisdictions in Europe, U.K., Australia, and Hong Kong have adopted open banking initiatives to improve market competition, innovation, and customer experience. And fintech companies and startups have been clear winners from open banking.

Major tech companies launched various tools and projects to address the challenge of data portability. In 2010, Facebook launched a Download Your Information (DYI) tool and Google rolled out Takeout in 2011. In 2018, Google partnered with Microsoft, Twitter, Facebook, and Apple, to work on an initiative called the Data Transfer Project, which features data portability between multiple online platforms. More recently, in 2019, Facebook also released a photo transfer tool. Despite all these measures, anti-competitive practices are still seeing a growth. 

The burning question is, why can’t data portability solve this bottleneck?

The merits of data portability draw equal attention to privacy and security risks. The current data portability laws lack clarity on data misuse and user data privacy. A white paperOpens a new window by Facebook sheds light on the complexities of data portability privacy. The white paper sets out fundamental questions such as:

• How should transferring companies protect privacy while enabling portability?
• Who is accountable for data misuse or if data is improperly protected?

On Friday, Facebook shared comments to the Federal Trade Commission (FTC) supporting data portability. This announcement comes ahead of the FTC public workshopOpens a new window (September 22, 2020) on data portability benefits and challenges. Facebook’s official comment to the FTC requests dedicated federal portability legislation to eliminate the ambiguity around data portability privacy and security.

Tech News: Why Are Tech Leaders Placing Their Bets on Kubernetes Control Planes?

In the comments to FTC, Facebook proposed, “An accreditation model, where the potential recipients of user data could demonstrate, through certification to an independent body, that they meet the data protection and processing standards found in a particular regulation, such as the GDPR or associated code of conduct.” 

A key understanding of these comments is that Facebook might want a fair playfield with its competitors, provided it is aware which data can be accessed by rivals. With this move, the company may be trying to achieve balance between openness and privacy.

In its blog, the company sharesOpens a new window , “We also ask it (FTC) to recommend dedicated federal portability legislation and provide advice to industry on the policy and regulatory tensions we highlight, so that companies implementing data portability have the clear rules and certainty necessary to build privacy-protective products that enhance people’s choice and control online.”

This support for data portability could be a strategic move by Facebook to respond to its antitrust investigation, where the social giant was accused of crushing competitors, such as Instagram and WhatsApp. Currently, Facebook only allows data transfer of photos and videos and is yet to enable transfer of contacts and friends list. A stricter and defined data portability law could allow Facebook to share key data, such as contacts and friend lists with its rival platforms.

What are your thoughts about Facebook’s recent comments on data portability? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!