Data-access start-ups offer alternative competition fix, Vestager adviser says

09 Aug 2019 12:46 pm

Tackling the likes of Google, Facebook and other tech giants may be helped by a new generation of start-ups helping users reclaim their data, the co-author of an influential report has said, serving up an alternative to intervention by antitrust regulators.

A wave of entrants that exploit the data-access rights under General Data Protection Regulation may serve as a "market-based solution" to competition challenges in digital markets, Yves-Alexandre de Montjoye, an academic at Imperial College London, said in an interview with MLex.

Antitrust regulators around the world are weighing how they can loosen the grip of major tech companies on the large personal datasets they’ve accrued through the provision of free services.

Control of such large personal datasets is a major bottleneck in the development of artificial intelligence, De Montjoye said, which a new, consent-based market for personal data could help to unblock.

Digital world

EU antitrust commissioner Margrethe Vestager commissioned De Montjoye, a privacy specialist, and two other academics — Heike Schweitzer and Jacques Crémer — to investigate how European competition law should keep pace with the digital economy.

Their report in April urged against breaking up the likes of Google, Facebook and Amazon.com. It concluded that requiring tech companies to introduce a system of “data interoperability” — which would enable users to move their data between platforms — would be an “attractive and efficient alternative”.

Such rules could be imposed on dominant companies under existing EU competition rules, or across a whole sector using a new regulation, the report said.

But the emergence of a “bottom-up” trade in personal data may provide an alternative solution to “top-down” interventions, De Montjoye said in an interview with MLex. It would save a complainant from needing to demonstrate to a regulator that the information their rival holds is necessary for them to compete.

Music agents, for data

Under the model being developed by a number of startups, people are helped to retrieve a copy of their data from a tech platform using the access rights granted by Article 15 of the GDPR, the EU's data-privacy statute. They then agree to share the data with developers in exchange for cash or a free service, or because they want to support health research or a public-policy goal.

“It’s an interesting case of competition law and data-protection law coming together. It’s the idea of the market-based solution, and the ability to access data through the individual,” De Montjoye said.

"It's a quite different way of looking at it. It’s not like you go and try to make an argument that this data is truly indispensable. You find and deal with individuals, so you can convince enough of them to exercise their right to portability given to them by the GDPR, to then allow you to access their data, thereby building a dataset that you can use to train AI algorithms,” he said. "There are quite a lot of start-ups in Paris, London and other places starting to build products around this idea."

One company hoping to foster this market is London start-up Yo-Da. The company is developing a “personal robot lawyer” app that builds a continuously-growing and secure archive of the information stored by an individual’s bank, search engine, supermarket, fitness tracker or mass-transit card issuer. It then brokers agreements with third parties seeking to use the data — in much the same way a music agent negotiates with record labels over the rights to play, copy or sample an artist’s work, said Yo-Da founder Benjamin Falk.

“Financial incentives similar to royalty payments can induce people to share richer and more complex datasets, which, thanks to the GDPR, is under their own control,” Falk told MLex. “So counterintuitively, we expect both the quality and the quantity of personal data available on the market to improve as a result of Europe's new privacy laws, with powerful knock-on effects downstream for the development of artificial intelligence.”

Weighing the options

Antitrust regulators are toying with the idea of forcing tech giants to share their data with rivals to boost competition. But they acknowledge interventions are not straightforward.

The EU academics' report says “data pooling” initiatives — under which companies are encouraged or compelled to share data — may increase competition and improve innovation. But it notes they could also result in the anticompetitive sharing of market-sensitive information, or could discourage smaller companies from innovating to collect their own data pipelines.

The UK Treasury's recent report into digital competition, by American economist Jason Furman, proposes a new UK regime of data interoperability for dominant tech firms, under which people could switch their data more easily between platforms. But it too noted that such a regime might carry privacy risks for individuals that would require careful consideration.

A major report by the Australian Competition and Consumer Commission last month said options for data portability were a question for longer-term study, but it’s unlikely to make a significant difference in the near future, in part due to a lack of serious rivals to Facebook and Google.

Falk said Yo-Da's approach of helping users name a price for their data would drive up the cost of doing business for dominant tech firms, and reduce their capacity to enter new sectors. "Clear and strongly enforced data rights, alongside better functioning marketplaces for personal data, offer the greatest potential to destroy the tech monopolies, rather than intervention by competition agencies," he said.

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