Data” is rightly being termed as the new “oil”. It is an essential input not only for commercial entities to be competitive in the digital economy but also for economies. Unexpectedly, the digital economy is creating data pools, which are worth billions of dollars to the enterprise that gathered it. This is evident from recent business takeovers. From the economic point of view, the most worrisome part is that control is leading to market dominance as well as entry barriers. Consumers around the world are busy enjoying various free Web services, like browsing, social networking, e-commerce, e-payment, ridesharing, music, movie, news etc., either in standalone apps or bundled together. In this zeal, they go on agreeing to all pre-ticked boxes while installing such apps. More often than not consumers have no choice but to take it or leave it, and at times they find their favourite apps pre-loaded in their mobile set. In the process, consumers are giving control over their data to the app owners.
On the business side, there is an increasing trend in business models using big data to attract more users. The user interactions, coupled with the use of algorithms and artificial intelligence, can significantly enhance competitiveness. But this can also lead to monopolistic situations, because algorithms gets further refined due to consumer interactions, which in turn enhances quality of service. This cycle of service refinement and attracting consumers eventually leads to monopoly. Recent acquisitions of firms like LinkedIn by Microsoft for $26bn in 2016 and WhatsApp by Facebook for $19bn in 2014, were aimed at acquiring valuable usage data. The key question here is who owns that data — the consumers who generate it or the businesses which put it to use? If consumers own the data, then operators should seek permission from consumers to allow data usage. It would also be the right of the consumer to obtain copies of all the collected information and switch it from one firm to its competitor — “Right to data portability”. Such a right could be an important ex ante tool to promote competition.
A private bill on data protection introduced in Parliament by BJD MP Jay Panda, too, spells out the need for “data portability”. The Telecom Regulatory Authority of India has also come out with a consultation paper throwing the following questions: What are the measures that should be considered in order to empower users to own and control his/her personal data? What are the new capabilities that must be granted to consumers over the use of their data? What should be the rights of data controllers? Can the rights of data controller supersede the rights of individuals? Recently, speaking at a CUTS event on Future of Digital Economy on August 11, Ram Sevak Sharma, chairman, Trai, expressed concern over the way the consumer usage data is being used for commercial gains. Many others have also taken cognisance of control over data and competition concerns. For instance, the European Commissioner for Competition, Margaret Vestager said, “If a company’s use of data is so bad for competition that it outweighs benefits, we may have to step in to restore a level playing field.” It is hoped that the Srikrishna Committee on data protection gives due weightage to the importance of “data portability”. It must consider data as an infrastructure, which can be used by all competitors. A caveat in conclusion: any regulation on disruptive technology must be optimal while being pro-competition it must not hamper innovation. In order to arrive at an optimal solution, coherence in deliberations at different forums, including that of Trai and the Srikrishna Committee, is a necessary first step.
Ujjwal Kumar of CUTS contributed to this article...