Interoperability and data portability in the DMA: Competition booster or lame duck?

Abstract The European Digital Markets Act (DMA) is a regulatory framework designed to ensure fair and contestable markets in the digital sector by imposing specific prohibitions and obligations on the core platform services of so-called gatekeepers. As the DMA is the first regulation of its kind worldwide, regulative uncertainties in its application need to be identified and addressed for its future review by policymakers. This is particularly true for the measures on interoperability and data portability. This paper examines key economic concepts and, thus, the reasoning behind the DMA’s interoperability and portability rules, assessing their theoretical impact on competition in digital markets. It shows that (i) the horizontal interoperability measures for number-independent interpersonal communication services are not necessarily economically justified and their current design might even lead to less competition; (ii) the effects of vertical interoperability instruments seem to be more pro-competitive for hardware, namely near field communication, while the outcome for software remains difficult to predict due to their high degree of generalization; and (iii) data portability can contribute to more competition, but its impact remains highly dependent on the effectiveness of the interoperability regime. This paper concludes that interoperability, especially in its vertical form, and data portability rules in the DMA have the potential to improve competition in digital markets. However, policymakers need to address the identified design flaws to enhance its effectiveness and efficiency. This includes establishing common standards for functionalities and data access conditions, as well as a clarifying the relationship between these measures and existing intellectual property, data protection, and trade secret rules. English Summary: The European Digital Markets Act (DMA) aims to ensure fair and contestable markets in the digital sector by imposing specific prohibitions and obligations on core platform services of gatekeepers. As the first regulation of its kind, it faces regulatory uncertainties, especially regarding interoperability and data portability. This paper examines the economic rationale behind the DMA’s rules and their theoretical impact on competition. It finds that (i) horizontal interoperability measures for number-independent communication services may not be economically justified and could reduce competition; (ii) vertical interoperability measures are more pro-competitive for hardware like near field communication, but their impact on software is uncertain; and (iii) data portability can enhance competition but depends on the effectiveness of the interoperability regime. Policymakers must address design flaws and establish common standards to improve the DMA’s effectiveness.