What regulation means for digital interoperability

Following the recent introduction of the EU Digital Markets Act, Dominic Wellington, director of market intelligence at MongoDB, considers what regulation means for interoperability

In March, the European Union announced a proposal for a new Digital Markets Act (DMA). This proposal does still need to be adopted before it comes into force (currently expected to happen in January 2023), but it is still worth taking a closer look at what this proposal covers.

The British cousin of the DMA still languishes in the consultation phase, but early indicators are that it will follow broadly the same lines — hardly a surprise, as the issues that these separate pieces of legislation aim to address are universal, which is in fact a big part of the problem.

This legislation is just one part of a major push by the EU to legislate the digital realm, which also includes the Digital Services Act and the Data Act. A major focus of all three proposals has been on preventing the formation of barriers to communication between citizens. This commitment has manifested itself especially in calls for greater interoperability between messaging systems built and maintained by different companies. In parallel, however, there has been a major drive to clarify and simplify the rules around data analysis and exchange.

Many of the news stories have focused on consumer impacts: will a WhatsApp message be transmitted to a user of Apple’s Messages, and if so, what standard of encryption will apply to that communication? Very similar questions apply to businesses too, with new regulations on data interchange.

Consumer vs enterprise

The difference between the consumer and the enterprise position is that in the case of making messaging systems and social networks interoperate with each other, the companies operating these networks are facing very significant hurdles — both new technical requirements, and challenges to established business models.

On the enterprise side, on the other hand, it is more a question of unlocking new analyses on existing data that companies might have been unwilling to perform due to the unclear legal constraints on certain types of data mining and exchange. The EU Data Act clarifies what is required in order to remain within the law, unlocking a potential € 270 B according to Commissioner Margrethe Vestager.

Technical requirements

So much for the legalities; what about the technical aspects? When it comes to consumer messaging systems, the requirements are at least clear, even if execution is fraught: a message sent from User A should be able to reach User B, even if they are on different networks. On the business side, there are at least as many use cases as there are companies — and probably many more, and much of the benefit is expected to come from data being exchanged between these different companies.

Unlocking these benefits will require companies to join up islands of data that have developed over time. Even within companies, it is common for individual teams to have built their own data layer for their own specific requirements; few systems were built taking into account the needs of the wider company. Beyond that, very few companies are set up to share data outside of the company, with suppliers, partners, or customers.

There are many reasons for this situation to have arisen. Companies unclear on what might or might not fall foul of data protection regulations often preferred to err on the side of caution. That €270 billion of additional GDP by 2028 that is promised as a benefit is expected to be unlocked by simplifying and clarifying what it is legally possible to do with all this data.

Obstacles to overcome

Even once those concerns about legal aspects have been addressed, though, many technical hurdles still remain. In particular, the Data Act has the goal of enabling companies to switch between different cloud service providers. This requirement can be expected to have a few different consequences. One is the emergence of common data formats to facilitate this type of exchange. We already see examples of this with a standard like FHIR, which is seeing increased adoption in the healthcare sector.

Another is an increased interest in working with providers that offer support for multiple cloud providers directly within their platform. This multi-cloud support is hard for any individual company to build, working with low-level components, but it is very valuable as a capability that is built into a data layer. Companies that adopt data platforms which support multiple cloud providers gain the benefits of flexibility and easy migration between vendors without the burden of operational complexity.

The EU proposals are explicit about the benefits for individual consumers. Examples include access to IoT device data, without lock-in to the systems of one vendor — bad enough if you are trying to integrate different devices, but a disaster if that vendor goes out of business!

The same benefits also apply to businesses, of course, and on the other side of the table, modern data platform technologies make it far easier to deliver that capability. It was always a good idea to build on platforms that offered flexibility in the types of infrastructure that they could run on and the integrations they supported, but with this new EU legislation, that requirement just got pushed up the agenda. This increased attention will drive market activity too, as companies seek out providers that are willing and able to work with them wherever they are — and wherever they need to be.

These new capabilities will enable companies to build new capabilities and take full advantage of the data they gather to offer a better service to their own customers, while remaining secure and complying with all relevant regulations — truly a win-win situation.

Written by Dominic Wellington, director of market intelligence at MongoDB


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