This document discusses data and protocol interoperability and their effects on competition. It defines data portability as the ability for users to transfer personal data between service providers. Data portability can increase competition by sharing learning effects between firms and reducing switching costs. However, it may also increase costs for smaller firms and pose privacy risks. Interoperability allows direct data exchange or the ability to invoke actions between platforms. This can boost network effects and facilitate switching. But interoperability risks tacit collusion and less product differentiation. The document recommends further reading on making data portability more effective and regulating digital markets.

1. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
How do (data) portability and interoperability
affect competition?
Prof. Dr. Jan Krämer
University of Passau and CERRE

2. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
What is data portability?
Content and
Service Provider (CSP)
§ Personal data
§ provided
§ observed
§ inferred
§ Non-personal data
§ provided
§ observed
§ inferred
§ Data relating to others?
Data Portability
§ Scope/type of data?
§ Scale of data transfer?
§ Timeliness?
§ Frequency?
§ Data format?
Other CSP
Personal Information
Management
System (PIMS)
Personal Data
Store
Consent

3. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of data portability on competition and innovation
Ø Sharing of data-enabled learning effects
more
data
better
algorithm
better
service
more
users
better
algorithm
better
service
more
users
more
data
more competition more innovation
Data Portability

4. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of data portability on competition and innovation
Ø Reducing switching costs
Data Portability
§ Personal data
§ provided
§ observed
§ Non-personal data
§ provided
§ Personal data
§ provided
§ observed
§ Non-personal data
§ provided
Switching

5. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of data portability on competition and innovation
Ø Possible unintended consequences
Increase users‘
inclination to
provide data
Increase firms'
inclination to
collect data
Implementation
costs and
data drain
(esp. for
smaller firms)
Privacy risks for
consumers

6. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
What is interoperability?
Data Interoperability
(two-way data exchange)
§ Common data?
§ Direct exchange or intermediated
exchange?
§ Two-way or one-way interoperability?
§ Scope of interoperability?
Protocol Interoperability
(ability to invoke actions)

7. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of interoperability on competition and innovation
Ø Sharing network effects
Interoperability
more users
more attractive
to other users
or
complementors
more users
more attractive
to other users
or
complementors
More competition

8. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of interoperability on competition and innovation
Ø Facilitating switching and multi-homing
Interoperability
M
ulti-Hom
ing
M
ulti-Hom
ing

9. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Effects of interoperability on competition and innovation
Ø Possible unintended consequences
Tacit
collusion
Lower
incentives
to innovate
Less ability
to
differentiate
Privacy
risks for
consumers

10. Chair of Internet and Telecommunications Business, Prof. Dr. Jan Krämer
Suggested Reading
Ø Krämer, J. (2020). Personal Data Portability In The Platform Economy: Economic Implications And Policy
Recommendations. Journal of Competition Law & Economics. https://doi.org/10.1093/joclec/nhaa030
Ø Krämer, J., Senellart, P., & de Streel, A. (2020). Making data portability more effective for the digital economy:
Economic implications and regulatory challenges. Centre on Regulation in Europe (CERRE).
https://cerre.eu/publications/report-making-data-portability-more-effective-digital-economy/
Ø Krämer, J. (ed.) (2020). Digital markets and online platforms: new perspectives on regulation and competition law.
Centre on Regulation in Europe (CERRE). https://cerre.eu/publications/digital-markets-online-platforms-new-
regulation-competition-law/