Blocked: Why Some Companies Restrict Data Access to Reduce Competition and How Open APIs Can Help

Daniel Castro and Michael Steinberg at the Center for Data Innovation: “Over the past few years, some scholars, advocates, and policymakers have argued that businesses which possess large quantities of data, such as social media companies, present inherent competition concerns. These concerns are misplaced for a number of reasons, one being that competitors can often obtain similar data from other sources. But in some industries and markets, a small number of firms have exclusive access to particular datasets, and they exploit their market power to limit access to that data through both technical and administrative means without any legitimate business justification. This type of anti-competitive behavior limits innovation and hurts consumers, and when these problematic practices occur, policymakers should intervene….

To promote competition, innovation, and consumer benefits in these three industries, policymakers should take the following steps:

  • In real estate, anti-trust regulators at the Department of Justice (DOJ) and the Federal Trade Commission (FTC) should investigate whether MLS actions to block data from online listing companies are collusive and exclusionary, and state policymakers should require brokers to provide open access to their real estate listings;
  • In the financial services, the Consumer Finance Protection Bureau (CFPB) should establish guidance for financial institutions to allow third parties to access customer data, securely and with the customer’s permission, through open APIs;
  • In the air travel industry, the Department of Transportation (DOT) should establish rules requiring airlines to make all ticket pricing information publicly available in a standardized format and prohibit unfair marketing practices that limit distribution of this information to certain companies….(More)”.