Cloud Portability and Interoperability under the EU Data Act: Dynamism versus Equivalence

This paper examines the provisions of the EU proposal for a Data Act relating to cloud portability and interoperability through a joint economic and legal lens. It suggests that the minutiae of the definition of ‘equivalence’, designed to protect firms consuming cloud computing services, are quite different from portability and interoperability rules for simple products due to product complexity and ongoing innovation. While a certain level of portability and interoperability are natural and essential for customers, the breadth of net cast by ‘equivalence’ as proposed could yield unintended consequences that not only lead to operational challenges in transferring customer assets but even product simplification to a lowest common denominator, reducing availability of the cloud computing service variety that customers seek. In the worst case, an overly expansive definition of ‘equivalence’ could create a race to the bottom that harms dynamic competition and innovation and limits cloud computing service availability in regions covered by the regulation.