Tread Carefully on Tech Platform Data Portability, Conference Hears

WASHINGTON, September 23, 2021 – Panelists debated Monday the merits of forcing companies to allow users to migrate their data from one platform to another, with some lauding the proposal and others cautioning Congress not to stifle innovators by taking a blanket approach.

The Politico Tech Summit hosted a panel discussing legislation before the House – H.R. 3849 – that would force companies to allow users to move their data from one platform to another. The idea behind the concept of data portability is to instigate competition by reducing the barrier for users to use other services that they would otherwise avoid because they cannot take their contacts, connections, and photos with them to the new platform.

Experts say such a portability mandate would be welcomed by younger internet platforms that are competing to grow their networks, but admonished by larger firms like Facebook and TikTok, who would argue that they grew their networks organically and don’t wield any uncompetitive pressures by keeping their networks private.

“[Anti-trust legislation] is really about opening up markets for innovative competitors to enter,” said Charlotte Slaiman, competition policy director for public interest group Public Knowledge.

“Network effects are very powerful in many of these dominant digital platforms. Network effects means it’s very difficult for a person to leave a network. Even if you’re upset with Facebook, you don’t want to leave because of your one thousand connections or whatever.

“If you think about it from the perspective of an entrepreneur, they’re facing this problem times a million users,” Slaiman added. “The sources of funding know it, the venture capitalists know…interoperability is about addressing those network effects.” Interoperability is the extent to which a platform’s infrastructure works with others, which can facilitate data portability.

And more competition is emerging in the online platform space. For example, sites like Parler and Vero have emerged as social networking alternatives to the likes of Facebook, while video sites like Rumble and Locals have emerged as alternatives to YouTube.

Slaiman argues that platforms should compete on the features and user experiences they offer, not on owning a pool of users and profiles.

Slaiman testified similarly before the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights on Tuesday.

Caution for portability legislation

Zach Graves, head of public policy for the think tank Lincoln Network, said there are a lot of cases where mandated portability “makes a lot of sense.

“If you look at the telecom context, you know the fact that you can take your phone number and port it to a different carrier. But we should approach this with caution. There are tradeoffs… I think there’s sort of a category error in how they’re constructing this that big is bad and that’s how we should regulate it,” he said.

“I would prefer a more sector specific approach,” Graves added. “If we’re talking about online retail, we should regulate online retail. If we’re talking about online ads, we should regulate online ads. The fact that we’re saying these companies are big and we should scrutinize them and give them a special framework I don’t agree with.”

Steve DelBianco, CEO of lobby group NetChoice, which pushes for a tech future free from onerous government regulation, was more blunt.

“The interoperability mandate will be a disaster for competition, for privacy and for data security,” he said. “There’s a complete difference between phone number portability and data portability compared to having interoperability where you open a hole into your application which means that any competitor can see data that violates your own privacy requirements. [That creates] security problems.

“People can join multiple social networks at the same time. The theory of network effects really falls down on this.”