%0 Journal Article
%A Jeon, Doh-Shin
%A Menicucci, Domenico
%C London
%D 2023
%F publications:48256
%I Kluwer
%J European Journal of Law and Economics
%K Data portability
%K Switching cost
%K Non-negative pricing constraint
%K Freebies
%K Pass-through
%R 10.1007/s10657-023-09774-9
%T Data portability and competition: Can data portability increase both consumer surplus and profits?
%U https://publications.ut-capitole.fr/id/eprint/48256/
%X We study how data portability affects consumer surplus and firms’ profits in a two-period model with a switching cost where two firms compete under a non-negative pricing constraint. The firms can circumvent the constraint by tying another complementary free service (called ”freebies”) with the original service. We consider a general framework of incomplete pass-through of freebies into consumer benefit, which includes the two extreme cases of no pass-through and full pass-through as special cases. Regarding the effect on consumer surplus, data portability involves a trade-off between intensifying competition after consumer lock-in and reducing rent dissipation before consumer lock-in. We find that for an intermediate range of pass-through rates, data portability increases both consumer surplus and profits.