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Data Portability on the Internet

An Economic Analysis
  • Michael WohlfarthEmail author
Research Paper
  • 33 Downloads

Abstract

Data portability allows users to transfer data between competing online services. As data gets increasingly valuable for online services and users alike, the enforcement of data portability within the European Union by the General Data Protection Regulation will have important ramifications for the competition in online markets. Thus, this paper develops a game-theoretic model to examine firms’ strategic reaction to data portability and to identify the ensuing market outcomes. It can be shown, among others, that although data portability is designed to protect users, they may be hurt because market entrants have an incentive to increase the amount of collected data compared to a regime without data portability. However, profits for new services and total surplus increase if the costs for implementation are not too large. This likely improves innovation and service variety. Consequently, the results provide important insights and case-specific recommendations for managers and policy makers in data-driven online markets.

Keywords

Data portability Competition between online services Economics of IS Switching costs Market entry and innovation 

Notes

Acknowledgements

I wish to present my special thanks to Daniel Schnurr for valuable feedback, discussions, and proofreading. Moreover, I thank Jan Krämer, Oliver Zierke, participants of the International Conference on Information Systems (2017, Seoul, Republic of Korea), participants of the European Conference of the International Telecommunications Society (2017, Passau, Germany), as well as the entire reviewing team for their very valuable comments. The author acknowledges partial funding for this project from the Bavarian State Ministry of Science and the Arts in the framework of the Centre Digitisation.Bavaria. All remaining errors are my own.

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Copyright information

© Springer Fachmedien Wiesbaden GmbH, ein Teil von Springer Nature 2019

Authors and Affiliations

  1. 1.University of PassauPassauGermany

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