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Access to digital car data and competition in aftersales services

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Abstract
This study looks at car data markets from an economic perspective. We start from several options for the technical characteristics of data access points that have been discussed among stakeholders in the automotive industry. We examine the structure of data markets that are likely to emerge from these characteristics and the implications for the welfare of manufacturers, aftermarket service providers and drivers. Car manufacturers face competition in car markets and aftersales services. However, they can design the car data architecture to ensure their exclusive access to the data. That would give them a monopoly in the market for car data from their brand. They can use this to increase their leverage on aftersales services markets. Our baseline scenario is the Extended Vehicle proposal that manufacturers prefer. This ensures their data access monopoly and enables them to maximizes revenue from data and data-driven aftersales services. It reduces welfare for drivers and aftersales service providers. Two technical variations on the baseline scenario reduce manufacturers' leverage over data server governance and their monopolistic power. That could reduce social welfare losses and transfer more surplus to drivers and service providers, compared to the baseline scenario. Other scenarios examine alternative data access gateways, for instance by keeping the OBD plug open and by applying real time data portability under the GDPR. These scenarios may offer some scope for regulators if they wish to keep alternative data access channels open in order to stimulate competition in aftersales services markets. However, they entail additional hardware and switching costs for consumers, compared to the baseline and are therefore partial and imperfect substitutes. In two final scenarios we examine the market position of B2B data marketplaces and consumer media services platforms. The potential for data aggregation across car brands and other sources creates some possibilities for these platforms to provide a counterweight to monopolistic behaviour by the manufacturers. However, manufacturers' control over the data supply and access to the in-car human interface ensures that they retain substantial leverage over these platforms. Regulators may consider creating the conditions for a more level playing field between OEM services and third-party aftersales service providers. As a next step in this research, the general scenario-based observations in this study would have to be complemented with empirical evidence on the data market power of car manufacturers.

Suggested Citation

  • Bertin Martens & Frank Mueller-Langer, 2018. "Access to digital car data and competition in aftersales services," JRC Working Papers on Digital Economy 2018-06, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:2018-06
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC112634
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    References listed on IDEAS

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    Cited by:

    1. Bertin Martens & Bo Zhao, 2020. "Data access and regime competition a case study of car data sharing in China," JRC Working Papers on Digital Economy 2020-08, Joint Research Centre.
    2. Rômy Bergman & Antragama Ewa Abbas & Sven Jung & Claudia Werker & Mark de Reuver, 2022. "Business model archetypes for data marketplaces in the automotive industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 747-765, June.
    3. MARTENS Bertin & DUCH BROWN Nestor, 2020. "The economics of Business-to-Government data sharing," JRC Working Papers on Digital Economy 2020-04, Joint Research Centre.
    4. Bertin Martens, 2018. "The impact of data access regimes on artificial intelligence and machine learning," JRC Working Papers on Digital Economy 2018-09, Joint Research Centre.
    5. Pavle Dakić & Igor Stupavský & Vladimir Todorović, 2024. "The Effects of Global Market Changes on Automotive Manufacturing and Embedded Software," Sustainability, MDPI, vol. 16(12), pages 1-31, June.
    6. Long, Vicky & Bjuggren, Per-Olof, 2022. "Working Paper No. 355: The artificial intelligence (AI) data access regime: what are the factors affecting the access and sharing of industrial AI data?," Ratio Working Papers 355, The Ratio Institute.
    7. Wolfgang Kerber, 2019. "Data-sharing in IoT Ecosystems from a Competition Law Perspective: The Example of Connected Cars," MAGKS Papers on Economics 201921, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Charlotte Ducuing & René Herbert Reich, 2023. "Data governance: Digital product passports as a case study," Competition and Regulation in Network Industries, , vol. 24(1), pages 3-23, March.
    9. Alonso Raposo, María & Grosso, Monica & Mourtzouchou, Andromachi & Krause, Jette & Duboz, Amandine & Ciuffo, Biagio, 2022. "Economic implications of a connected and automated mobility in Europe," Research in Transportation Economics, Elsevier, vol. 92(C).
    10. Wolfgang Kerber & Daniel Moeller, 2019. "Access to Data in Connected Cars and the Recent Reform of the Motor Vehicle Type Approval Regulation," MAGKS Papers on Economics 201915, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    connected cars; digital data; car data; monopolistic data markets; data regulation; access to data; data trade;
    All these keywords.

    JEL classification:

    • L00 - Industrial Organization - - General - - - General

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