Improving Consumer Welfare With Data Portability

Daniel Castro November 29, 2021
November 29, 2021
Data portability requirements should be carefully designed to avoid imposing unnecessary costs on organizations, exposing proprietary information, or undermining consumer privacy.

Data protection laws and regulations can contain restrictive provisions, which limit data sharing and use, as well as permissive provisions, which increase it. Data portability is an example of a permissive provision that allows consumers to obtain a digital copy of their personal information from an online service and provide this information to other services. By carefully crafting data portability provisions, policymakers can enable consumers to obtain more value from their data, create new opportunities for businesses to innovate with data, and foster competition.

There are many proposals under consideration for how to craft data protection laws and regulations that can protect consumer privacy while giving consumers more control over their personal information. One important provision that can be considered in data protection laws and regulations to improve consumer welfare is data portability. Unlike many restrictive provisions in data protection laws designed to limit how data is used and shared, data portability is a permissive provision intended to increase data use and sharing. As such, data portability is an important provision for policymakers interested in promoting data-driven innovation.

Data portability allows consumers to obtain a digital copy of their personal information from online services and provide this information to other services, allowing consumers to obtain more value from their data, creating new opportunities for businesses to innovate with data, and fostering competition. However, data portability requirements should be carefully designed to avoid imposing unnecessary costs on organizations, exposing proprietary information, or undermining consumer privacy.

This report offers several recommendations for how policymakers can support data portability. These are:

  • Create data portability policies at the national level
  • Prioritize high-impact opportunities for data portability
  • Limit the scope of non-sector-specific data portability requirements
  • Support industry-led data portability standards
  • Encourage data portability APIs but allow data scraping
  • Use data portability as a pathway to allow consumers to donate their data
Improving Consumer Welfare With Data Portability