Once Characterized as an Antitrust Strategy, Data Portability May Not Be the Competition Remedy Many Believe

October 6, 2020 — As technological advances allow for more data to be generated on consumers, the public has become more attuned to the need for national data privacy legislation.

Yet there is a countervailing trend: Data portability as possible antitrust remedy against dominant tech platforms.

On Monday, former Clinton Administration privacy czar Peter Swire said that data portability mandates threaten privacy without offering competition benefits.

“Opening up data would create issues,” said Swire, who is now professor of law and ethics at the Georgia Institute of Technology. “Open up data reserves the wrong way and you’ll create huge privacy problems.”

He was speaking at a virtual meeting of the Regulatory Transparency Project, an effort of the conservative Federalist Society.

The discussion takes place in the context of American legislators considering data privacy proposals, some of which include data portability legislation.

Data portability is the ability to move data among different computing environments. Portability legislation requires common technical standards to facilitate the transfer of data from one data controller to another, promoting interoperability.

During the panel, experts affirmed that data portability law can be crucial to protect consumers and maintain a democratic internet.

“Most of the big data controllers, are already providing portability as a feature of their service as a consequence of having to comply with the California Consumer Privacy Act and the General Data Protection Regulation,” said Gabriela Zanfir-Fortuna, senior counsel at Future of Privacy Forum. “Microsoft was one of the first to declare portability compliance.”

According to Zanfir-Fortuna, the right to portability enhances consumer welfare, as it allows individuals to obtain a copy of their data and use it for whatever purpose they see fit.

Another potential effect of portability legislation is increased competition, as innovation may result from getting data once held in walled gardens into the hands of new individuals.  Many competition agencies and legislatures are considering interoperability mandates to increase competition.

Congress is set to release a report with recommendations for reducing the market power of online platforms, panelists said.

While there are obvious consumer benefits to data portability, Swire emphasized getting the right data flows open and the right ones closed is crucial.

Further, he said there is no evidence that data portability mandates are a remedy to competition.

Swire said data portability legislation may reduce business incentives and could entrench incumbents by making it difficult for smaller competitors to modernize their products.