Rules designed to enable consumers to move their data from one platform to another should not be so costly to comply with that they serve as a "barrier to entry" into markets, the UK's parliamentary under-secretary of state for the Department for Business, Innovation has said.
Baroness Neville-Rolfe said that the planned new General Data Protection Regulation (GDPR) is likely to give consumers "more control over how their data is to be used" but she raised concern about the impact data portability rules could have on "new ideas, innovation and competition".
Various drafts of the GDPR have contained proposed new rules which would, if finalised, require businesses to ensure that they can hand over the personal data they possess on a consumer in a usable transferable format.
"The technical feasibility and the cost to platforms of providing data in a suitable format obviously needs to be considered because if the costs are too high then that perversely becomes a barrier to entry," Neville-Rolfe said in giving evidence to the UK parliament's EU Internal Market Sub-Committee's ongoing inquiry into online platforms.
"So you have got these tensions in these innovative areas. We're wanting to move forward, we're wanting to protect the consumer but you are wanting to ensure that the real friends to the consumer which is new ideas, innovation and competition are coming through and that new regulations don't stop that," she said.
Culture minister Ed Vaizey said that the GDPR should make it easier for consumers to switch between rival service providers and highlighted legislative proposals in France which he said "will make it mandatory to be able to port your personal data … between platforms".
"I think that is something we should look at to see what the French legislation says and see what it can do," Vaizey said.
Vaizey said he sees "nothing wrong in principle" with the concept of being able to switch service providers where that data is held in the cloud but said that the "argument against" data portability rules is that it represents "another regulation and burden on business" and that "the technical formats might not be appropriate to make it easy" to facilitate in practice.
Neville-Rolfe said that competition policy also has a role to play in enabling consumers to switch more easily between rival services but that the UK does "need to try to do something" about the "slowness" of decision making by competition authorities and the appeals process before the courts in competition law cases.
She said, though, that the current competition framework is "reasonably fit for purpose" and cautioned against imposing new regulations on platforms.
"If you can avoid regulation but have strong competition law which tackles the over-mighty when they get over-mighty but also allows a good degree of growth and new innovators that is often the best way," Neville-Rolfe said.
Vaizey said there were "classic examples" of where government regulation and interference in markets had not worked. He cited Germany's "quite … complex environment for data protection" as having led to "a very complicated situation".
However, he said that competition authorities "should address this issue of whether they are speedy enough and open enough to the small business person as opposed the big business" and acknowledged that there might be a role for the government in encouraging industry to take action on a voluntary basis to address competition and consumer issues "as they arise" speedily and flexibly.
Vaizey previously told the Committee that he thinks the push for tighter regulation of platforms is motivated by the fact the platforms are largely major US-based technology companies and not companies "based or grown out of" the EU.
At the time he said: "In terms of regulating platforms I think one needs to have a pretty convincing case that some kind of new regulatory regime is required over and above a sort of competition regime that already exists to deal with any perceived or actual anti-competitive behaviour."
The Committee's report is expected to be published in spring 2016.
Separately the European Commission is currently consulting into "the economic role of online platforms" which closes on 30 December. Businesses, consumers and other stakeholders have been asked for their views on a range of issues, including on whether they think platforms should make it easier for users to switch their data, including personal data, to rival service providers.
Copyright © 2015, Out-Law.com
Out-Law.com is part of international law firm Pinsent Masons.