By: Sean Ennis & Ben Evans (Center for Competition Policy)
The proposal for a Data Act is a significant move towards creating sustainable regulations that promote good governance in the data economy and foster innovation, according to the EU legislator. The proposal includes several valuable provisions that merit implementation. However, we are concerned that the cloud portability and interoperability provisions may have adverse consequences for competition and innovation, despite the legislator’s intent to prevent cloud customers from being bound to their current provider.
Creating such provisions necessitates developing specific rules, including establishing “equivalence” between cloud computing services, assuming the existence of “equivalent services” and achieving “functional equivalence” across those services. This equivalence could make it easier for cloud customers to switch from one provider to another and interoperate between various cloud providers.
Nevertheless, a broad definition of equivalence could have unintended consequences that may hamper innovation and competition from smaller cloud providers, as well as those cloud computing services that are competing most vigorously to meet customer demands…
