Data as a Competitive Resource: Essays on Market Power, Data Sharing, and Data Portability

Data is an important competitive resource in digital online markets. As a result, the access and availability of data can be the basis for a competitive advantage. This thesis analyzes the role and competitive effects of data in digital markets and contributes to an improved understanding of data as a (potential) basis for market power. Thereby, the thesis also contributes to the ongoing policy debate on how to safeguard a fair and open competitive environment for internet-based digital (i.e., online) services as well as traditional services. In doing so, Study 1 surveys the literature and discusses (i) the challenges that are associated with assessing market power in digital markets, (ii) the challenges in creating a level playing field in digital markets, e.g., by harmonizing regulatory obligations for online and offline services, and (iii) the vital role of data and data protection in the context of data-driven business models. Study 2 and Study 3 focus on the competitive effects of transferring data between online competitors. The study on social logins (Study 2) highlights the strategic effects as well as welfare implications if competing online services deliberately and voluntarily decide to share user and usage data. Whereas Study 2 abstracts from the user’s decision how much data to provide to an online service, Study 3 focuses on the amount of data that firms require for their services and that is provided by users. In particular, Study 3 investigates the competitive and welfare effects of a new fundamental consumer right: The right to data portability. This right is part of the General Data Protection Regulation (GDPR) which becomes effective in May 2018 for all online services available to users in the European Union and allows users to transfer their personal data from one online service to another (competing) online service (c.f., GDPR Article 20). In this context, the study examines the firms’ strategic reactions to the introduction of such a right and identifies the ensuing market outcomes as well as policy and managerial implications. In conclusion, this doctoral thesis contributes to an improved understanding of (i) the competitive effects that arise from data as an economic good or valuable asset for digital services, and (ii) the aspects that may constitute market power in digital markets. Moreover, from a policy perspective, the thesis can be understood as a theoretically founded research project that (i) informs which market failures may arise in the context of digital (data-driven) markets and that (ii) highlights the peculiarities that need to be considered to define appropriate legal requirements in order to establish a level playing field between online services and traditional (established) services, but also between competing online services. Therefore, the thesis also contributes to the discussion on whether and how dominant online platforms should and can be regulated