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Impact of PSI pricing on the Business Information Industry

Impact of PSI pricing on the Business Information Industry. Introduction. Who we are How is information turned into ‘value added’ information How does pricing affect competition between PSIH and private companies On vertical integration Effectiveness of existing guidance and laws

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Impact of PSI pricing on the Business Information Industry

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  1. Impact of PSI pricing on the Business Information Industry

  2. Introduction • Who we are • How is information turned into ‘value added’ information • How does pricing affect competition between PSIH and private companies • On vertical integration • Effectiveness of existing guidance and laws • Competition law issues

  3. How is information turned into “added value” information? Other sources Private data sources Companies House Gazettes County Court Judgements Own Research

  4. How is information turned into “added value” information? • Ways of adding value • Extra functionality on data (presentation) • Analysis of data • Speed of delivery • Aggregation with other data sets • Reaching wider markets • Training new users • Service levels (helpdesk / support, etc) • Contract terms (warranties, indemnities) • Quality checks

  5. Problems with “adding value” • “Value adding” is too imprecise, allowing PSIHs to reinvent the limits to their competitive behaviour: Pricing is unclear • PSIH have to adhere to rules if they add value: Who controls the PSIH? OPSI drafting definition • Value added services need non-value added content • Terms on which businesses buying direct from the PSIH may resell an identical product Picture:greefus groinks on Flickr

  6. Sale of Data in the Information Industry Companies House Bulk Users Creative Re-sellers Downstream Re-sellers Customers

  7. Pricing of raw data • Usually: All purchasers pay share of cost • Pro – difficulty caused by cut-price reseller • Con – reduction in the number of re-sellers to a level which restrict competition • Users of data often require speed that the PSIH can deliver best • PSIH may develop commercial “extra data” which it does not include in the products it supplies to its private sector competitors • Business cannot prepare for increases

  8. Vertical vs. horizontal integration • Vertical integration • PSIH has market dominance and sells the information to end customer when market is established • Even if sale and adding value process was integrated, there is a need for selling data in bulk to third parties • Horizontal integration • Data is the main asset • Inventive product building • E.g. Money laundering due diligence check, credit management scoring, monitoring for fraud protection, direct marketing, industry information

  9. Need for additional guidance • What is a statutory product? What is Companies House core business, and what is an additional service? • Constant attempt to define • Statute is often very imprecise • Companies House does not have any documentation in that regard • How accountable is the PSIH? Picture: elephanteum on Fliickr

  10. Examples: • Provision of business information: • Companies House provides a monitoring service earlier than the data is delivered to re-users • What happens if the public sector is in breach of rules? • The re-user is dependent on the data. • Marketing: • Restrictions despite legitimate interest

  11. Guidance • PSIHs need to be more aware about rules • The contracts and calculations must be available. The public sector needs more openness and accountability • Use should not be arbitrarily restricted. Once information is publicly available data creative use should be encouraged: The public authority should not be the judge of the proper use as long as the information is re-used legally

  12. Guidance II • The license agreement should ideally be irrevocable and perpetual, even if the license is free of charge • If a higher version of the product becomes available, the re-user should be able to choose the new product. Generally, there should be increased communication as to the format of the information • Once the retail market is established, the public sector should not enter this market • If the use of the information is restricted by the license agreement, there should be stricter supervision about the uses of loopholes

  13. Conclusion: • There rules on uses of public data are not clear • When is data purchased under license public data? • Is every information available under license publicly available information? • PSIH should set themselves guidelines on the necessary dissemination • PSIH should bear responsibility for the quality of the data

  14. Bisnode Limited Kilian Knote Business Law Consultant Tel: 020 84818708 Mob: 07855773908 kknote@bisnode.co.uk

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