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Interoperability is Key to Tech Competition

On October 6, the House Judiciary committee released a 449-page report concluding a 16-month investigation into the degree of economic concentration in the digital economy, the evidence of harm arising from the actions of four large tech companies at the center of that concentration, and the efficacy of current antitrust law and regulatory authority to mitigate harm and promote competition and consumer welfare.

The ACAL report (from the Antitrust, Commercial and Administrative Law subcommittee) was immediately controversial for the aggressiveness of its proposed remedies. While the substantive places of disagreement are very real, it’s important not to let them mask the context in which the report was released and the areas of consensus that are rapidly emerging in conversations of tech competition going forward, including the importance of interoperability and data portability and the legitimacy of some amount of government involvement to promote them.

The ACAL report was not the only output of Congress’s investigative process. Leaders from the House Judiciary committee minority released two separate reports to pair with the majority’s. One, led by Rep. Buck (R-Colo.), calls itself a “Third Way”, and will be influential in bipartisan legislation discussions going forward. The Buck report embraces several of the key recommendations of the ACAL report, including tweaks to a few subtle but crucial legal standards around presumptions and burdens of proof. One of those areas of agreement is the set of proposals regarding, in Buck’s words, “empowering consumers to take control of their user data through data portability and interoperability standards.”

Interoperability and data portability enjoyed a tremendous rise to political visibility in 2019, beginning in March with the release of the European Commission’s expert report, “Competition policy for the digital era,” in which the word “interoperability” appears 105 times. Seven months later, the U.S. Senate introduced bipartisan legislation, the ACCESS Act, which if passed would mandate the provision of data portability and interoperability interfaces by large platforms. While the months since that bill’s introduction have been marked by a global pandemic and countless other legal and political developments, the Buck report and the ACAL report together indicate that there remains a core of bipartisan consensus around interoperability and data portability.

With the degree of political momentum behind interoperability and data portability, it’s time for us to figure out how best to make such mandates work in practice, and feed that understanding back into legislative processes to help make sure that future requirements are workable and not overly burdensome, particularly for startups and smaller companies. The digital economy will have lost its engine if every startup has to hire compliance lawyers before they can break into the market—but it will be just as broken if new market players can’t enter the market at all.

I have been writing for the past three years about the importance of interoperability in promoting innovation, competition, and user choice. Interoperability, paired with but above and beyond data portability, is at the heart of the digital economy, and protecting it will be both critical and challenging. It’s not a trivial exercise to implement the principles of interoperability in the framework of existing antitrust and competition law. But it’s also not an intractable one. The path ahead starts by recognizing what the Buck and ACAL reports make clear, as several academic studies over the past few years have also shown: the digital economy is different, and benefits from applying a different approach.

I wrote a paper for the Journal of Cyber Policy’s 2020 special issue on “consolidation of the internet” to help map out the landscape of interoperability in practice. My piece, “Unpacking interoperability in competition,” looks briefly at specific case studies of technologies such as mobile and web payments and identity authentication systems, and other paradigms of compatibility in legal history. I barely scratched at the surface of the complex, multi-stakeholder discussion that we need to have, as soon as possible.

We need to come to a shared understanding of what it means, for example, for a social media company to offer Application Programming Interfaces (APIs) that effectively enable other social media companies to interoperate on a level playing field. There is no rulebook to guide them today. They do not have regulatory guidance or established best practices to help them determine the information that should be made available, the terms on which it should be offered, or the performance or security characteristics (such as rate limits and authentication protocols) that are fair and reasonable to place on such interfaces. Now take those questions and multiply them for several other functional services of the digital economy.

But the government in Washington is done with waiting. The same is true for the European Commission in Brussels, and for the Competition and Markets Authority in the United Kingdom. Legislation and litigation are both moving forward, hoisting a Sword of Damocles in the air. To be clear, I support these developments (noting that much more work on the ideas is still needed). I’ve written that our current trajectory of centralization in tech puts in jeopardy the fundamental assumptions of low-cost market entry and growth that underlie the success of the digital economy. Interoperability is one of the internet’s structural characteristics most critical for a healthy market, and I view (thoughtful, tailored) government intervention to be necessary at this point to promote interoperability going forward.

It won’t be easy. APIs evolve to meet changing supply (technology innovation) and demand (user behavior), and while pro-market interoperability principles remain the same, the thresholds needed to meet them will need to rebalance, adapt, and adjust over time. Just as technology companies don’t have a rulebook for their API policies, governments don’t have an off-the-shelf model for legislation that can enforce accountability against flexibility. For the sake of the vibrant digital ecosystem that contributes so much good to so many parts of our society and economy, though, we need to figure it out.

Chris Riley is the former Director of Public Policy at Mozilla, where he managed the global Mozilla public policy team and its active engagements in Washington, Brussels, New Delhi, and around the world. Prior to joining Mozilla, Chris worked as a program manager at the U.S. Department of State on Internet freedom, a policy counsel with the non-profit public interest organization Free Press, and an attorney-advisor at the Federal Communications Commission. Chris holds a Ph.D. in Computer Science from Johns Hopkins University, where he worked as a research and teaching assistant and an instructor, and a J.D. from Yale Law School, taking internships at the Electronic Frontier Foundation and the law firm Ropes & Gray. He has published scholarship on topics including innovation policy, cognitive framing, graph drawing, and distributed load balancing.

This article was supported by the Ewing Marion Kauffman Foundation.

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