Tokyo
University Professor Hiroshi Ōhashi published an article called
"Competition Policy in the New Age" in the Nikkei. I'll be
referencing the important points, so I'll comment along with quotes from the
article.
"When
there's synergy between data gathering and usage, we say that the relationship
has a network effect. When a network effect is in play, we can clearly see the
contrast between the victor who gathered data successfully and the loser who
failed to do so, and the way this causes the market to trend towards
oligopoly."
In truth the network effect points out how physical networks like
traffic and communication networks become more valuable the more their number
of users increases, but in IT upper level platforms and applications become the
subject, and one level up from that the very data that flows through them has
become the main subject. This is an important point.
"In
recent years Western competition authorities have warned of both data
accumulation and oligopoly. Last year, both the German Federal Cartel Office
and French competition authorities signed onto and sent out a report, and the
United States' Federal Trade Commission also released documents focusing on Big
Data."
The promotion of data usage as an IT/intellectual property policy
for Japan has been a recurring theme, but we seldom here discussion on
competition policy.
"The
discussion in the West, as it concerns competition policy, has pointed out that
data capture by existing businesses may be taking away opportunities for new
services offered by new entrants to the market.
Such data capture plucks out innovation when it's only just begun to
grow, and may be an obstacle to the revitalization of the industry.
Regarding international IT megacorporations, starting with Google
and Apple, the EU and various other western countries are attacking the issue
through tax and competition policy, but the problem is spreading through data
as well. Compared to this, the Japanese authorities' stance towards American IT
companies is quite soft. There have been several scattered cases of foreign
powers ignoring rules that apply to domestic companies.
"AI
has also rapidly permeated business to business services, creating new concerns
for competition policy as it relates to data accumulation in the manufacturing
world."
In the midst of the sudden sharp growth in the importance of AI, it
is commonly understood that data will be the deciding factor in the ability to
utilize it. The major factors are whether and
how one can secure and refine their own data, and whether and how they
can use and share external data.
"Starting
from the concern that citizens/consumers don't actually have a way to really
understand how their data is being used or shared by businesses in
business-to-consumer interactions, we
ought to make ownership and usage clear with respect to data, just as we have
for goods and services."
Discussion is ongoing in the government's IT headquarters regarding
the provision of an infrastructure for the ownership/usage/distribution data,
and at the intellectual property headquarters, an intellectual property system
for promoting the use and application of data is being debated.
"One
idea that developed is the usage of a personal data store or PDS that would
allow individuals to manage their own data within a structure that encouraged
such management, with companies returning the personal information they store
to individuals." This concept is
even spreading throughout the world of B to B transactions, and it might be best to begin talks with the
government as a whole in order to establish ownership and usage rights.
The crucial point in the concept is that the PDS would allow
individuals to manage their own data. Paired with the setup of a data
transaction marketplace, it would make up an infrastructure for data use and
distribution. The debate on these matters centers around the IT headquarters.
"Even
considering our country's growing competitive strength, setting up an
environment that facilitates the safe and secure use and distribution of data
is an urgent task. In the midst of certain industries wrongly capturing data
and manipulating competition through unfair methods, there is a need for the
competition authorities to establish a system capable of investigating
unmasking such behavior and the expertise to run it."
I have claimed in the past that we need to get the wheels turning
for both infrastructure as IT policy and an IP system as intellectual property
policy, and it seems now that there are circumstances that need to be managed
as part of a competition policy.
