Why the Right to Data Portability Likely Reduces Consumer Welfare: Antitrust and Privacy Critique Peter Swire Moritz College of Law Attorneys General Education Program Conference on the Economics of Consumer Protection George Mason University October 22, 2012

Overview EU Right of Data Portability (RDP) in draft privacy Regulation Idea of portability very attractive Antitrust perspective What creates consumer welfare Privacy perspective Control over your data but with what rules What to do

Why Portability is Attractive You post your data to the cloud, a social network, an app Avoid lock-in: you can switch to a new social network or cloud provider High switching costs: manual downloads are slow, clumsy Goal of EU Art. 18: Individual gets back data uploaded Individual without hindrance can transfer personal data from 1 st to 2d service (the export-import module)

Antitrust Concerns Antitrust goal to max consumer welfare Concerns with Art. 18: Applies to all online services, even start-ups No market power requirement Fails to consider efficiencies of what software companies include in offerings Interoperability difficult Cost of creating EIM Dynamic efficiency & incentives to compete for the market

Antitrust (cont.) In essence a per se rule requiring portability Refusal to deal – lots of company discretion Tying and Microsoft – rule of reason They require showing of market power before regulating Conclusion on antitrust Differs greatly from consumer welfare goal in US and EU antitrust analysis

Privacy & Data Portablity EU idea – fundamental right to autonomy, individuals should control their data Responses/questions: A human right to data portability? Rights of the individual on the other side Right to data security – dont want a lifetime of data taken with a moments identity theft Should look realistically at costs and benefits, rather than asserting a new right, with no experience in operation

Some Conclusions & Questions Consumers do benefit from portability, from avoiding lock-in & high switching costs The rules should learn from antitrust experience with exclusionary practices Market power, efficiencies, rule of reason Be cautious about sweeping declaration of a new right, with no experience in practice Applies to any online services that sell to EU What to do now? Jawbone, and major companies have shifted Look for actual problems, and then act