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Data Portability on the Internet

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  • Michael Wohlfarth

    (University of Passau)

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.

Suggested Citation

  • Michael Wohlfarth, 2019. "Data Portability on the Internet," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 61(5), pages 551-574, October.
    • Handle: RePEc:spr:binfse:v:61:y:2019:i:5:d:10.1007_s12599-019-00580-9
    DOI: 10.1007/s12599-019-00580-9
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    Cited by:

    1. Daniel Arce, 2022. "Security-Induced Lock-In in the Cloud," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 64(4), pages 501-513, August.
    2. Florez Ramos, Esmeralda & Blind, Knut, 2020. "Data portability effects on data-driven innovation of online platforms: Analyzing Spotify," Telecommunications Policy, Elsevier, vol. 44(9).
    3. Arnold, René & Hildebrandt, Christian & Taş, Serpil, 2020. "European data economy: Between competition and regulation. Final report," Study Series, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH, number 251538.
    4. Krämer, Jan & Stüdlein, Nadine, 2019. "Data portability, data disclosure and data-induced switching costs: Some unintended consequences of the General Data Protection Regulation," Economics Letters, Elsevier, vol. 181(C), pages 99-103.
    5. Ciotti, Fabrizio & Hornuf, Lars & Stenzhorn, Eliza, 2021. "Lock-In Effects in Online Labor Markets," LIDAM Discussion Papers CORE 2021014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Steffen, Nico & Wiewiorra, Lukas & Kroon, Peter, 2021. "Wettbewerb und Regulierung in der Plattform- und Datenökonomie," WIK Discussion Papers 481, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.

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