Towards a Competitive Strategy for Data Distribution

　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.