One of the suggestions over what we do about the Big Bad Tech companies is that we insist that all our data is portable. File formats and all that are set up so that we can lift everything we’ve got on, say, Facebook, and go install it over on not-Facebook if we are so minded to change where we post our cat pictures. This would, so the thinking goes, make it easier for a new entrant to compete with Facebook. And sure, it would. It would reduce not so much the technological lock in but, umm, the sunk costs we’re abandoning if we move.
Britons should be able to regain control of data from technology giants to break their stranglehold over the digital economy and boost competition online, according to a landmark review for the Government. A panel of experts told the Treasury that consumers should be able to move move their data from one digital service to another more easily to curb the dominance of Amazon, Apple, Facebook, Google and Microsoft in “winner-takes-most” markets. Under the proposals, new regulations could allow social networking users to shift their lists of friends, photo archives and message histories off Facebook or LinkedIn to to a new challenger, for instance.
It’s not harmful in the larger sense however much the current incumbents are going to squeal about it. But it’s also not all that useful either. For our entire point here is that we’re dealing with markets with network effects.
….correctly identifying big tech as enjoying network effects. The more people who use Facebook, the more appealing it is to use Facebook, because that’s where all the people are. The same is true of Amazon’s Marketplace: The consumers are there, so nearly all potential suppliers are, and all the consumers are there because all the suppliers are. Network effects mean that we have a natural tendency to that monopoly which is the opposite of competition.
Network effects also work both ways. Sure, we’re all on Facebloke because we’re all on Facebloke. And the moment that rat run to Facebitch starts then it cascades and it’s akin to a bank run as we’re all off to Facebitch. The difficulty in such markets isn’t in the cascade, nor the movement. It’s in people actually desiring to move in the first place. Because being on the larger network – because of those network effects – has value. That’s what network effects are.
Data portability makes the leaving easier, makes the cascade easier if it’s ever triggered. But it doesn’t do anything about those network effects nor the difficulty of doing the initial triggering. So, not actively harmful which is a new one in tech political policy but not greatly useful either – that last not being a new finding in political tech policy.