“ Why the Right to Data Portability Likely Reduces Consumer Welfare:

1. “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

2. 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

3. 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 1st to 2d service (the “export-import module”)

4. 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

5. 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

6. 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 – don’t want a lifetime of data taken with a moment’s identity theft • Should look realistically at costs and benefits, rather than asserting a new right, with no experience in operation

7. 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