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The New Portability

Designing Portability with Competition in Mind

Gabriel Nicholas

Technologists originally conceived of data portability as a tool to rein in an overcrowded software services market. Today, policy makers look to data portability to do the opposite — that is, lower barriers of entry to encourage competition in software markets where too few options exist. However under this new purpose, dominant firms are not incentivized to implement data portability in ways that meaningfully increase competition.

Existing data portability laws like the General Data Protection Regulation and the California Consumer Privacy Act fail to address this concern since they focus more on data ownership and oversight, relegating competition to a sort of free, bonus benefit. In order to effectively improve competition, any guidelines or regulation the FTC issues on data portability should encourage implementations that a) offer useful data to new market entrants in a convenient manner, and b) provide enough utility and a frictionless enough experience for consumers to take advantage of them. To these ends, I propose four best practices of portability regime design that the FTC should require or encourage:

  • Documentation: data senders should document the structure and content of data they allow consumers to port to make it practical for other software services to integrate.

  • Unique identifiers: data senders should include available unique identifiers, used to organize and differentiate individual data points, so as to allow data receivers to connect shared data uploaded by multiple consumers.

  • Direct transfers: data portability implementations should allow consumers to transfer their data directly from one service to another without having to act as an intermediary.

  • Collective portability: groups of consumers who share data should be able to transfer that data together to alleviate collective action barriers to switching services.

These recommendations are based on interviews with technologists, qualitative research on existing implementations of data portability, and five years of industry experience as a software engineer. Data portability is an exciting yet experimentally untested mechanism for improving competition in the tech industry. By adopting these recommendations and focusing on the needs of consumers and potential competitors, the experiment has the greatest chance of seeing success.