Why the internet needs a data portability ecosystem

Delara Derakhshani is director of policy and Zander Arnao is an intern at the Data Transfer Initiative (DTI).

The internet powers nearly every aspect of our daily lives. Every day, digital services collect and generate data about our likes and dislikes, who we are connected with and how we interact with the world around us. Personal data is the lifeblood of this ecosystem: it fuels industries, enables innovative new features, and (most importantly) forms the substance of our digital identities. As users engage over time, their personal data is an important record of their digital experiences. But at present, users have little control over this record.

Users spend years, even decades, interacting with particular services providing and generating data about themselves, resulting in innovative and highly personalized experiences. Consider, for example, how music streaming platforms have dramatically changed modern music listening. Streaming platforms allow users to make social connections, curate new musical experiences, and share the fruits of their exploration with others.

This is made possible in part by the huge amount of time and energy users spend creating playlists. While this personal data improves users’ experiences on a particular platform, the difficulty of moving playlists between services makes switching to an alternative less attractive. Users are less willing to switch to new services that may better serve their needs if it means losing their playlists. As a result, users may feel locked into a legacy platform due to barriers that discourage switching.

Historically, this vendor lock-in phenomenon has been prevalent across digital services. Vendor blocking puts the burden on users to set up workarounds that help move their data to other services. For example, the average user stores over 500 gigabytes of personal data (including photos) in the cloud. Under lockdown conditions, this data can be difficult to transfer between services, forcing users to think carefully about whether they have the time or patience to switch. In this situation, vendor lock-in generates switching costs that restrict users’ agency from controlling their personal data.

As users switch from one digital service to another, they should be able to take the data they care about with them. This ability to transfer personal data between services is called data portability (which is distinct from the closely related concept of protocol interoperability). Data portability can allow listeners to stay in control of their playlists; families to keep cherished photos of their loved ones; and friends to save past conversations. Data portability can strengthen the bond between these users and their data and can allow them to freely and easily switch from one service to another without abandoning their virtual selves.

It is technically possible that the services allow data portability. When data is made portable, it is packaged in a format that can be exported via an interface and downloaded or shared directly with another service. (The European Union, for example, requires platforms to make personal data available in a structured, commonly used and machine-readable format).

Data portability also increases competition in the market. When switching costs are high, users are less likely to try new services, even though those alternative services may better meet their needs. High switching costs contribute to an environment where only a few services dominate and users are relegated to distinct silos. As a result, smaller companies face barriers to entry because they are unable to attract new users who choose to stay with incumbent services. Economically, the ability to change is a precondition for the emergence of deeper competition in digital markets.

In the absence of switch costs, new entrants are able to address unmet user needs. Incumbent services, in turn, must proactively compete on the merits for patronage from their users. The result is greater innovation and the development of higher quality services. It also gives users more choice, allowing them to opt out of services for misconduct such as damage to their privacy or simply to use multiple competing services at the same time, a concept known as multi-homing. In addition, lower switching costs facilitate the reuse of valuable data, which can stimulate the development of secondary markets. (For example, the UK’s Open Banking Initiative has catalyzed significant innovation in fintech.) In this way, data portability enhances user power and the collective vitality of digital markets.

These benefits naturally raise questions about how the Internet could become more portable. At the Data Transfer Initiative, we envision the emergence of a data portability ecosystem where users can freely and easily move their data around the web. We envision the creation of interoperable interfaces where users can direct and consent to sharing their data with multiple services.

This ecosystem can be accomplished through service-to-service data portability, where technology serves as a connective tissue that orchestrates how disparate services work together to support the movement of personal data. Importantly, service-to-service data portability is direct– Allows you to transfer between services without the cumbersome process of downloading data and reloading to a new service (especially beneficial for those without high-speed Internet or who can only access the Internet through cell phones with limited data plans). Through this infrastructure, users, including the most vulnerable populations, should be able to reap the benefits of seamless data transfers between services.

We call this version of data portability an ecosystem because it will need to evolve and strengthen over time. In essence, data portability stimulates information flows between services that otherwise would not be interconnected. Such an ecosystem can take many forms and, due to its sensitivity, must be carefully managed. For it to be successful, it should be designed to reflect four principles focused on empowering users and facilitating competition:

• First, services should be created for users. The data portability ecosystem should equip users with robust tools that strengthen their control over personal data. These tools should be easy to use and accessible through interoperable interfaces.

• Secondly, services should ensure privacy and security. Ensuring these values ​​are essential to foster trust among users that their data will be protected. User trust is a prerequisite for the widespread adoption of data portability tools.

• Thirdly, data portability should be mutual between importers and exporters. In the absence of reciprocity, the flow of information would be one-sided and lock-in conditions could resurface after users switch to a new service.

• Fourth, data portability should focus on personal data. The scope of data made portable should extend to all information that a user has provided or generated while interacting with a service. This scope should not extend to service-synthesized data or other proprietary information.

At the Data Transfer Initiative, we are leading the open source data transfer project to become a cornerstone of the vibrant data portability ecosystem. We believe this ecosystem can and should continue to expand. There is a growing appetite for greater user empowerment and competition in digital marketplaces. By increasing users’ ability to transfer their data, data portability helps them enjoy greater control over the information they care about and move from one service to another. A vibrant data portability ecosystem will fuel the future of a vibrant internet.

Delara Derakhshani is Director of Policy for the Data Transfer Initiative (DTI), a non-profit organization with a mission to empower people by enabling effective data transfers. Prior to DTI, she was a Policy Manager at Metas Reality Labs, covering privacy issues related to wearables, facial recognition and augmented reality. Prior to Meta, Delara was Senior Counsel, Tech Policy at the Entertainment Software Association, where she advised game publishers and console manufacturers on technology laws and policies, led strategic initiatives, and advocated on behalf of the industry around the world. Prior to ESA, you worked as a Policy Counsel at Consumer Reports. Delara has testified before Congress on privacy and technology and has been featured in several national media outlets including NBC Nightly News, NPR, Fox Business and HuffPost Live. She received her Juris Doctor from the Catholic University of Americas Columbus School of Law and a Bachelor of Cognitive Science from the University of Virginia.

ZanderArnao is a policy intern at the Data Transfer Initiative (DTI), where he writes on data portability and analyzes policy developments relevant to the DTI portfolio of issues. Before the DTI,Zanderhe was a Public Interest Technology Fellow at the Federal Trade Commission, advocating for the application of US adtech advertising truth laws. He has also contributed opinion pieces analyzing technology policy to several publications, including The Chicago Policy Review, TechTank, and Tech Policy Press.Zanderholds a master’s degree in international relations and a bachelor’s degree in public policy from the University of Chicago. You wrote your Master’s thesis on international data transfers between the United States and the European Union.

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