KEY ISSUES FOR DIGITAL TRANSFORMATION IN THE G20

The potential and pitfalls of digitised data generation and processing are well-documented. One policy
response has been to consider the question of whether individuals should have the opportunity to obtain
access to their own information to use it for personal purposes. This opportunity has been called “data
portability” although this term is used to describe consumer rights that vary significantly in terms of their
nature and scope.
Various rationales are advanced to support data portability. A common starting place is the notion that data
portability can empower individuals, thus leading to better functioning and competitive markets, and
ultimately growth and consumer welfare benefits. Data portability can be seen through a data protection lens
and can also be considered as a means to achieve the free flow of data. While this initiative extends beyond
personal data to encompass all varieties of data, the right to data portability will contribute to the attainment
of this objective. Several approaches to data portability are outlined below (Box 7), which emphasise the
potential that data portability has to increase competition between providers of goods and services.
Data portability is expected to increase competition between providers of digital goods and services (such as
social networking services) and in other analogue markets (for instance, utilities markets). Data portability may
enhance competition by (i) reducing information asymmetries between individuals and the providers of goods
and services; (ii) limiting switching costs for individuals; and (iii) potentially reducing barriers to market entry.
While there is generally little dispute about the potential benefits of data portability, the attainment of the
data portability goals outlined above will pose policy and implementation challenges. These include concerns
regarding data security, implementation costs, and the differentiated impact these initiatives may have on
consumers. Data security is perhaps the most significant impediment to data portability initiatives, given the
very real tension between data access and security (see Chapter 6 on digital security). Verification of
identification is a challenge for content and service providers. Some service providers will process personal
data about an individual but may not have any significant prior contact with an individual, or they may only
hold indirect identifiers for that individual.
A second common challenge for these initiatives relates to implementation costs. If the right to data
portability requires companies to adjust their technical capacity to provide access to data in an accessible
format this will also increase business costs. There are potential impacts on innovation as well. Data portability
might, for instance, deter entry to the market if new entrants are concerned that they are unable to retain
users and guarantee a return on their investments as a result of portability provisions. At present, the business
plans of many digital providers are based in part on the expectation that they will not need to share their
customer data, in particular with competitors.
A third concern is that data portability might have negative implications for equality and diversity. Although
savvy consumers might take advantage of data portability opportunities, less confident or less active
consumers are less likely to do so. A related concern regarding data portability is that it may conflict with other
rights and interests. One example of this is the potential conflict between one individual’s right to data
protection (exercised through data portability) and another individual’s right to privacy. It is easy to imagine a
situation where personal data, such as a photograph of two friends, is ported from one social network service
to another in a way that violates the second individual’s privacy rights.