Cloud Portability and Interoperability under the EU Data Act: Dynamism versus EquivalenceDate: 24/04/2023 Type: Articles Topic: Competition | Law |
Cloud Portability and Interoperability under the EU Data Act: Dynamism versus Equivalence
(by Sean Ennis and Ben Evans) For the EU legislator, the proposal for a Data Act represents an important step towards the enactment of long-term rules aimed at establishing good governance of the data economy and appropriate incentives to innovate. While the proposed regulation contains many valuable provisions that are worthy of implementation, we find that insufficient thought appears to have been given to the potential implications of the cloud portability and interoperability provisions for competition and innovation. The broad idea with these provisions is to ensure that cloud customers are not locked-in to their current provider. Preventing lock-in is not easy, though, and entails the development of specific rules. One of the key proposals entails the establishment of ‘equivalence’ between cloud computing services. This assumes the existence of sets of ‘equivalent services’ and extends, under certain conditions, to the achievement of ‘functional equivalence’ across those services. Such an equivalence could facilitate the overarching objective of enabling cloud customers to switch relatively easily from one provider to another and to interoperate between different cloud providers. Although laudable in principle, an expansive definition of ‘equivalence’ could have unintended consequences that risks a chilling effect on innovation and competition by smaller cloud providers, and more generally upon those cloud computing services that are competing most assiduously to meet customer needs. In our recent paper, we examine the Data Act through a joint economic and legal lens, and explain why equivalence can have such a surprising unintended consequence.