This is our response to the Financial Conduct Authority's call for input on Potential competition impacts from the data asymmetry between Big Tech firms and firms in financial services.
Since its inception, the Open Data Institute has been committed to our mission: to work with companies and governments to build an open, trustworthy data ecosystem.
Our response to this consultation builds on our previous thinking around possible data monopolies in the banking sector and data sharing in the economy.
We responded to the 2018 consultation on the Digital Competition Expert Panel, and reacted to the subsequent report. We have also developed a model of data sharing in the economy, and quoted thinking from previous senior staff members on issues around data monopolies.
Our experience across various data portability initiatives and smart data schemes also provides us with relevant insights. This work includes:
- Open communications. We responded to the recent DSIT consultation on open communications, which built on some earlier work with Ofcom: we ran a workshop with potential data users, consumer advocacy groups and government in November 2019 on behalf of Ofcom, exploring possibilities for the future of data sharing in the sector and wrote up the findings in an openly available report. The ODI also responded to Ofcom’s Open Communications consultation in 2020.
- Open Banking - for example, as a member of the Open Banking Working Group that helped develop the standards and guidelines for open banking, as part of the Open Banking Expert Consumer Group and as participants in the Future Entity Working Groups, where we have also submitted our views. We have also responded to the FCA consultation on Open Finance.
- Supporting open data initiatives with Ofgem and Ofwat, and stewarding the OpenActive initiative to generate open data in the sports sector since 2016.
- Our Head of Policy Resham Kotecha is currently an Advisory Council Member of the government’s Smart Data Council launched in April 2023, set up “to help lower bills for consumers and small firms by making it easier to switch utility providers”. We are also currently in the process of setting up a Smart Data Challenge, which was launched at the end of October in cooperation with the Department for Business & Trade, Challenge Works, and Smart Data Foundry.
Broadly, we believe that the access to and nature of the data held by big tech companies could lead to monopolisation, with network effects securing their market position and creating data asymmetries with financial firms. In our view, benefits should not be concentrated on bigger entities but shared with small and medium enterprises and others, as well as empowering consumers, who need to be protected.
Key elements of our response
- We are concerned about ‘network effects’ - where linking vast amounts of data can allow Big Tech firms to extract increasing amounts of value from data. These competition and economic concerns also have a range of related social concerns at stake
- We highlight two categories of data asymmetry - one being access and data availability, and the other being the nature of data available to big tech firms which lead to different insights, ethical concerns and harms. For example in the use of more sophisticated predictive and automated decision-making technologies, which can be highly controversial
- We argue that the response to these challenges should continue to support an open data regime, as it is essential for ensuring smaller companies can enter markets and that markets work better for consumers, while addressing negative impacts of the asymmetry favouring big tech. This should include: data portability without paywalls; addressing researcher access to platform data for better accountability; developing regulatory approaches with citizen participation to address issues and harms; improving data literacy among decision makers to navigate the challenges highlighted; and developing robust data governance and safeguard approaches to ensure data portability does not create consumer harms
We would like to thank David Bolat for sharing his insights and experience to support our response to this consultation.