Big Data and Digital Markets Contestability: Theory of Harm and Data Access Remedies

Abstract

This article analyses the crucial role of user data for digital markets contestability and presents policy proposals devised to address growing concerns about the dominance of data-rich incumbents in digital markets. To this end, we discuss a data-driven theory of harm that would warrant ex-ante data access regulation and highlight that niche entry and growth should be the primary economic policy objective in digital markets characterised by strong data-driven network effects. We then evaluate regulatory data access remedies with respect to the involved economic trade-offs and their effectiveness for promoting niche entry and growth. Firstly, we analyse remedies that would limit the collection of user data by data-rich incumbents such as data silos and line of business restrictions. Secondly, we consider remedies that facilitate sharing of (user) data by opening up access to raw behavioural user data collected by data-rich incumbents. In particular, we propose a dual approach with two complementary types of data access remedies: bulk sharing of broad anonymised raw user data and continuous, real-time data portability of deep raw data that contains personally identifiable information. Finally, we comment on the recent proposal for a Digital Markets Act by the European Commission with respect to our findings.

Keywords: Data-driven Markets; Regulation; Digital Markets Act; Data Access; Data Sharing

JEL Classification: K2; L51; L86