Interoperability and data portability in the DMA: Competition booster or lame duck?
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Florian Hey
Abstract
The European Digital Markets Act (DMA) is a regulatory framework designed to ensure fair and contestable markets in the digital sector by imposing specific prohibitions and obligations on the core platform services of so-called gatekeepers. As the DMA is the first regulation of its kind worldwide, regulative uncertainties in its application need to be identified and addressed for its future review by policymakers. This is particularly true for the measures on interoperability and data portability. This paper examines key economic concepts and, thus, the reasoning behind the DMA’s interoperability and portability rules, assessing their theoretical impact on competition in digital markets. It shows that (i) the horizontal interoperability measures for number-independent interpersonal communication services are not necessarily economically justified and their current design might even lead to less competition; (ii) the effects of vertical interoperability instruments seem to be more pro-competitive for hardware, namely near field communication, while the outcome for software remains difficult to predict due to their high degree of generalization; and (iii) data portability can contribute to more competition, but its impact remains highly dependent on the effectiveness of the interoperability regime. This paper concludes that interoperability, especially in its vertical form, and data portability rules in the DMA have the potential to improve competition in digital markets. However, policymakers need to address the identified design flaws to enhance its effectiveness and efficiency. This includes establishing common standards for functionalities and data access conditions, as well as a clarifying the relationship between these measures and existing intellectual property, data protection, and trade secret rules. English Summary: The European Digital Markets Act (DMA) aims to ensure fair and contestable markets in the digital sector by imposing specific prohibitions and obligations on core platform services of gatekeepers. As the first regulation of its kind, it faces regulatory uncertainties, especially regarding interoperability and data portability. This paper examines the economic rationale behind the DMA’s rules and their theoretical impact on competition. It finds that (i) horizontal interoperability measures for number-independent communication services may not be economically justified and could reduce competition; (ii) vertical interoperability measures are more pro-competitive for hardware like near field communication, but their impact on software is uncertain; and (iii) data portability can enhance competition but depends on the effectiveness of the interoperability regime. Policymakers must address design flaws and establish common standards to improve the DMA’s effectiveness.
Zusammenfassung
Die Europäische Verordnung über digitale Märkte (DMA) ist ein regulatorischer Rahmen, der darauf abzielt, faire und bestreitbare Märkte im digitalen Sektor zu gewährleisten, indem spezifische Verbote und Verpflichtungen für die zentralen Plattformdienste der sogenannten Gatekeeper auferlegt werden. Da der DMA die erste Regulierung dieser Art weltweit ist, müssen regulatorische Unsicherheiten in seiner Anwendung identifiziert und für ihre zukünftige Evaluierung durch politische Entscheidungsträger adressiert werden. Dies gilt besonders bei Maßnahmen zur Interoperabilität und Datenportabilität. Dieses Papier untersucht zentrale wirtschaftswissenschaftliche Konzepte und damit die Wurzeln der Interoperabilitäts- und Portabilitätsregeln des DMAs, indem es ihre theoretischen Auswirkungen auf den Wettbewerb in digitalen Märkten bewertet. Es zeigt, dass (i) die horizontalen Interoperabilitätsmaßnahmen für nummernunabhängige interpersonelle Kommunikationsdienste nicht unbedingt ökonomisch gerechtfertigt sind und ihre derzeitige Ausgestaltung sogar zu weniger Wettbewerb führen könnte; (ii) die Auswirkungen vertikaler Interoperabilitätsmaßnahmen wettbewerbsfördernder für Hardware, besonders Nahfeldkommunikation, zu sein scheinen, während das Ergebnis für Software aufgrund der starken Generalisierung der Regeln schwer vorherzusagen bleibt; und (iii) Datenportabilität zu mehr Wettbewerb beitragen kann, aber ihre Wirkung stark von der Effektivität des Interoperabilitätsregimes abhängig ist. Dieses Papier schließt, dass die Regeln zur Interoperabilität, besonders in ihrer vertikalen Form, und Portabilität innerhalb des DMAs das Potenzial haben, den Wettbewerb in digitalen Märkten zu stärken. Politische Entscheidungsträger müssen jedoch die identifizierten Gestaltungsmängel beheben, um ihre Wirksamkeit und Effizienz zu erhöhen. Dies umfasst die Festlegung gemeinsamer Standards für Funktionalitäten und Datenzugangsbedingungen sowie eine Klärung des Verhältnisses zwischen diesen Maßnahmen und bestehenden Regeln zum geistigen Eigentum, Datenschutz und Geschäftsgeheimnissen. Deutsche Zusammenfassung: Die Europäische Verordnung über digitale Märkte (DMA) zielt darauf ab, faire und bestreitbare Märkte im digitalen Sektor sicherzustellen, indem sie spezifische Verbote und Verpflichtungen für die zentralen Plattformdienste der sogenannten Gatekeeper auferlegt. Als erste Regulierung dieser Art weltweit müssen regulatorische Unsicherheiten identifiziert und für zukünftige Evaluierung adressiert werden, besonders bei Maßnahmen zur Interoperabilität und Datenportabilität. Diese Arbeit untersucht wirtschaftswissenschaftliche Konzepte und damit die Wurzeln der Interoperabilitäts- und Portabilitätsregeln des DMAs, bewertet ihre theoretischen Auswirkungen auf den Wettbewerb und zeigt, dass horizontale Interoperabilitätsmaßnahmen nicht unbedingt gerechtfertigt sind, während vertikale Maßnahmen wettbewerbsfördernder sein können. Datenportabilität kann den Wettbewerb stärken, bleibt jedoch hoch von der Effektivität des Interoperabilitätsregimes abhängig. Politische Entscheidungsträger müssen Gestaltungsmängel beheben und einheitliche Datenstandards festlegen, um die DMA-Wirksamkeit zu erhöhen. .
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