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Many people hope that data interoperability can increase competition, by making it easier for customers to switch and multi-home across different products. The UK’s Open Banking is the most important example of such a remedy imposed by a competition authority, but the experience demonstrates that such remedies are unlikely to be straightforward. The experience of Open Banking suggests that such remedies should be applied with focus and patience, may require ongoing regulatory oversight to work, and may be best suited to particular kinds of market where, like retail banking, the products are relatively homogeneous. But even then, they may not deliver the outcomes that many hopes for.

Data portability and interoperability tools allow customers to easily move their data between competing services, either on a one-off or an ongoing basis. Some see these tools as offering the potential to strengthen competition in digital markets; customers who feel locked in to services that they have provided data to might be more likely to switch to competitors if they could move that data more easily. This would be particularly true, advocates hope, where network effects grant existing services value that new rivals cannot emulate or where one of the barriers to switching services is the cost of re-entering personal data.

The UK’s Open Banking system is one of the most mature and important examples of this kind of policy in practice. As such, the UK’s experience to date may offer useful clues as to the potential for similar policies in other markets, for which the UK’s Furman Report has cited Open Banking as a model. But fans of interoperability sometimes gloss over the difficulties and limitations that Open Banking has faced, which are just as important as the potential benefits.

In this article, I argue that Open Banking provides lessons that should both give hope to optimists about data portability and interoperability, as well as temper some of the enthusiasm for applying it too broadly and readily.

I draw on my experiences as part of the team that produced the industry review “Open Banking: Preparing For Lift Off” in 2019. That report concluded that Open Banking, though promising, needed several additional reforms to succeed, a few of which I discuss in this piece. I was also the co-author of a white paper that argued for an Open Banking-like remedy in the UK’s retail electricity market, which I discuss briefly below. All views expressed here are my own.

I argue that there are three main lessons to draw from Open Banking for considerations of similar remedies in other markets:

1. Implementation is difficult and iterative, and probably requires de facto regulatory oversight if it is to be implemented effectively, with all the attendant costs and risks that entails.
2. The outcomes that interoperability produces may differ from those policymakers have in mind, and may not mean more switching of core services.
3. If Open Banking does succeed, it will be thanks to features of the UK banking market that may not be present in other markets where similar interoperability is being proposed.

I conclude that Open Banking has not yet led to noticeably stronger competition in the UK banking sector. Implementation challenges suggest that taking an equivalent approach to other markets would require more time, investment and effort than many advocates of interoperability requirements usually concede and may not deliver the anticipated benefits. To the extent that Open Banking is to be a model, it would be best applied as a focused approach in markets that bear particular characteristics and where the costs are outweighed by the benefits, rather than a blanket measure that can be applied to every market where customer data matters.

Read the full white paper here.

Warner Bros. Entertainment Inc.’s announcement in early December that it would send 17 films from its 2021 slate directly to its HBO Max streaming service the same day they debut in theaters shocked the entertainment world. Affected films include anticipated franchise tentpoles like “The Matrix 4,” “Dune” and “Space Jam: A New Legacy.”

Theaters traditionally have had a three-month exclusive “window” to run a film, after which it would be distributed to home video, premium channels, free channels, and then network television. Warner effectively shut the window between when a film is shown in theaters and when it is made available elsewhere.

Read the full piece here.

It would not be reasonable for service providers to be held culpable for every possible misuse of copyright material in the vast amount of user-generated content they carry. That would create massive risk of lawsuits, with ill effects for internet users and even for copyright holders who benefit from the legal distribution of their content.

But proper safe harbors should encourage online companies to help prevent copyright content from being improperly disseminated in the first place. For example, such rules could encourage online companies to license content upfront, which they can do more easily than copyright holders can with each of the service providers’ many users.

Read the full piece here.

The European Court of Justice issued its long-awaited ruling Dec. 9 in the Groupe Canal+ case. The case centered on licensing agreements in which Paramount Pictures granted absolute territorial exclusivity to several European broadcasters, including Canal+.

Read the full piece here.

More than two decades after Congress sought to strike a balance between the interests of creators and service providers with the Digital Millennium Copyright Act (DMCA), it is clear that Section 512 of the Copyright Act has failed to create the right incentives to curb online copyright infringement. Indeed, as a May report from the U.S. Copyright Office concluded, the “original intended balance has been tilted askew.”

Read the full piece here.

We submit this statement in support of IIPA’s petition to review South Africa’s GSP eligibility in light of South Africa’s failure to provide “adequate and effective protection” to intellectual property as required by the GSP statute and, in particular, profound concerns with draft legislation that will, if enacted, further erode the protection of intellectual property in South Africa for U.S. and South African creators alike.

While we support IIPA’s petition, we note at the outset our reluctance to take such a position: We believe that trade sanctions are harmful to the country imposing them (and on which they are imposed, of course), and, as far as possible, should be avoided. Both the U.S. and South Africa benefit from the GSP that currently affords South African producers unilateral, tariff-free access to U.S. markets for some goods. As such, we caution that the USTR should withdraw South Africa’s GSP designation only as a last resort.

But we also believe that both the United States and South Africa share a strong interest in sustaining creators through adequate and effective protection of intellectual property, thereby promoting economic development and the production of culturally diverse materials. And, unfortunately, removal of GSP is one of the few tools available to the U.S. to protect the interests of U.S. creators of intellectual property in global markets. The USTR is legally obliged to faithfully discharge its congressional mandate by taking action to defend U.S. intellectual property in accordance with various trade laws, including by ensuring that GSP beneficiary countries provide adequate and effective protection within the meaning of the statute.

In submitting this statement, we are mindful that South Africa’s President has not yet signed into law the Bills that motivated the IIPA’s petition. If he does so, South Africa would fail to meet the conditions for GSP eligibility and USTR will be obliged to revoke all or some of its GSP benefits. We note, however, that numerous local actors have voiced concerns regarding the constitutionality of the proposed legislation and the harm that it will to do to the community of creators in South Africa. It is possible that President Ramaphosa will heed these concerns, reject the draft legislation and send it back to Parliament for reconsideration, with directions to adapt or remove its numerous provisions that conflict with South Africa’s Constitution and the country’s international treaty obligations. So doing could result in a text more consistent with South Africa’s (and the U.S.’s) cultural and economic interests. Most importantly from the perspective of this submission, by rejecting the draft legislation President Ramaphosa would at the very least defer any action on the part of USTR to revoke South Africa’s GSP eligibility.

In short, we argue that:

• Protection of intellectual property both in the U.S. and in South Africa is mutually beneficial;
• Duty-free imports from South Africa to the U.S. benefit the citizens of both countries, and those citizens will suffer as a result of the partial or full withdrawal of GSP benefits from South Africa;
• GSP withdrawal is nonetheless required if South Africa does not adequately and effectively protect U.S. intellectual property;
• South Africa’s copyright laws currently do not effectively protect the rights of artists; and
• Two Bills recently passed by South Africa’s Parliament, and championed by U.S.-based evangelists of “fair use,” would further weaken the effectiveness of copyright protection.

This excerpt from the beginning of Netflix’s The Great Hack shows the goal of the documentary: to provide one easy explanation for Brexit and the election of Trump, two of the most surprising electoral outcomes in recent history.

Read the full piece here.

Underpinning many policy disputes is a frequently rehearsed conflict of visions: Should we experiment with policies that are likely to lead to superior, but unknown, solutions, or should we should stick to well-worn policies, regardless of how poorly they fit current circumstances?

Read the full piece here.