Why Basic Company Data Must Be Open
Published 10:34, 22 June 12
OpenCorporates aims to do a straightforward (though big) thing: have a URL for every company in the world.
That sounds quite simple (it's not), but the ramifications are huge, since it provides a way of pulling together data about a company. In particularly, it allows you to make connections between companies, their people - and their actions.
OpenCorporates has just published a new report entitled "The Closed World of Company Data", which is "An examination of how open company data is. Part II: European Union countries" (.pdf.) That pretty much gives the game away: its main conclusion is that company data is almost entirely closed in Europe:
EU countries score badly for open access to company data, with an overall average of 23 out of a possible 100 points, with several important countries - Spain, Greece and Austria, for example - scoring 0 points. Though the average for Open Government Partnership countries1 is 22 out of 100, this includes several developing countries without even functioning online company registers.
To its credit, the UK is a real leader here:
The United Kingdom is the first EU country to publish its basic company information as an openly licensed data dump, as part of its commitment to open data. It has also said that it is looking at publishing directors’ information as open data later in the year, but has as yet made no commitment to this, nor to statutory filings, shareholdings or to company accounts (which it is now collecting as data). While it should be applauded for taking the first steps to open its register, there is still much work to be done to truly open up the register for reuse by all sections of the community.
That's not such a surprise: I've noted several times that the UK is doing very well in the area of open data generally, and this latest report confirms that's true as far as corporate data is concerned. Other parts of Europe, on the other hand, are truly dire. Even major nations like France and Germany score badly:
Little extra information is made available, there is no licence that allows for reuse, and often an explicit closed licence that prevents reuse to some degree. Within this group the level of company data returned by search varies from basic (generally lacking essential data such as directors, statutory filings and significant shareholders) to very sparse, sometimes with just a name, company type and status.
But wait, there's worse:
Finally, we get to those countries that are completely closed, preventing even searches of companies without charge and without registration. These countries, which include Spain and Austria, appear to consider the registers not for the public benefit, but as an extension of the global business information services (Dun & Bradstreet, Bureau van Dijk, Experian, etc), who buy the data in bulk and resell to their corporate customers.
So why should we care that this kind of information is not freely available? Well, there's the general issue that open data is a good thing, as readers of this blog will know: it allows all kinds of innovation to take place without needing to ask permission or pay heavy up-front fees. But the new report offers four other cogent reasons why corporate relationships should be openly available:
First, this is not about legitimate commercial confidentiality but about protecting incumbents’ power, position and, often, legacy business models.
Second, this is often as not about evading scrutiny - from society, from shareholders, and from regulators. Make it difficult enough to understand the hundreds or thousands of complex legal entities making up a global corporation, and you can do what you want.
Third, competitive advantage should be about coming up with a better way of doing something, taking a risk on a new product and reaping the benefits, having a closer relationships with your customers, and so on. Not obscuring the public record so that it’s impossible for the wider world to understand who they’re doing business with, competing with, investing in or regulating.
Fourth, this lack of transparency, enabled in part by company registers restricting information about companies to those who can afford the high prices, forces all companies to play the dodge the regulator/tax/public scrutiny game. This reduces the attention spent by good companies on real-world innovation and being a good corporate citizen, and forces all into a game of regulatory arbitrage, playing jurisdictions and regulators against each other to force them to a race to the bottom that leaves companies able to act outside the law.
Those clearly-articulated points alone would make this report worth reading as an introduction to this whole area. But its other virtue is that it has already amassed data that quantifies the scale of the challenge facing us. The sooner we begin tackling it, the better.