Data portability has been identified as a procompetitive measure to empower consumers to choose among competing providers. Specifically, data portability could theoretically reduce the switching costs consumers face, for example if they must reproduce all of the information and content inputted into a digital content platform whenever they switch providers. If consumers are able to bring their data with them, new firm entry and thus greater contestability could be possible. Data portability can also enable comparison services in markets with complex pricing structures.
Interoperability, on the other hand, can promote competition by allowing different systems to communicate with one another. This can include standards that enable real-time data sharing across services (e.g. cross-posting social media content on multiple platforms), and those that enable the combination of functionalities (e.g. having a single account log-in across multiple different online services). Interoperability can make multi-homing easier by allowing consumers to use multiple competing or complementary services through a single access point. This could ensure network effects are preserved while potentially addressing barriers to entry and promoting competition in a market.
In June 2021, the OECD held a discussion exploring the numerous challenges involved in the implementation of both data portability and interoperability measures. The discussion tried to tackle, first, the question of whether these measures are in fact effective in promoting competition – particularly if they are designed with other objectives in mind, such as data protection. Second, the discussion explored different mechanisms for implementing these measures, whether through competition enforcement, merger reviews, or ex ante regulation. Third, the legal, technical and practical challenges associated with implementing these measures.
