Exit or Own? Portability Mandates and Ownership Screens in Sovereign Procurement¶

Stefane Fermigier (Abilian) · sf@abilian.com

Draft working paper v0.7, 2026-09-16. Superseded; not to be circulated further. The exposure decomposition, Lemma 1, Proposition 1 and three of Remarks 1 to 4 were taken into Screening for Sovereignty (v0.20, section 9: Lemma 2, Proposition 9 and Remarks 7 to 9). Proposition 9 there corrects Proposition 1 here: it adds the implementation cost both types pay under the mandate; the band it states holds inside the screening region only. Remark 4, the exit requirement on the technology layer for operators of licensed foreign technology, is Remark 9 there. The lock-in rent this paper posits is derived in Exit, Pursued by a Bill (v0.14). Proposition 2 is withdrawn: its buyer objective was never written. The page stays for citation, with no further revisions.

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Abstract¶

European policy relies on two instruments to counter dependence on foreign-controlled digital infrastructure: ownership screens, which verify who controls the supplier, and exit-capability mandates (portability, reversibility, switching rights), which lower the cost of leaving. We price both in a single screening framework. An exit mandate conveys no information about the supplier's hidden type, and it insures only the observable harms of denial and holdup, leaving compelled and covert access uninsured. It nonetheless changes what screening can achieve: by destroying the lock-in rents that make winning valuable to a non-sovereign mimic, it lowers the verification accuracy an ownership screen requires. We characterize an accuracy band in which ownership screening is feasible only in combination with an exit mandate, so that the two instruments are strict complements. We also characterize a denial-dominated region in which exit on its own suffices (Proposition 2, since withdrawn: the objective was never written). Exit mandates and price premia emerge as dual instruments: one aids selection and weakens discipline, the other does the reverse.

Keywords: procurement, switching costs, portability, data act, screening, digital sovereignty, lock-in.

JEL: D82, D86, H57, L51, L86.

Proposition 1, at illustrative parameters: an exit mandate destroys the lock-in rents that make winning worth faking, lowering the accuracy an ownership screen needs. In the shaded band the two instruments only work together.

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Cite this paper¶

Fermigier, S. (2026). Exit or Own? Portability Mandates and Ownership Screens in Sovereign Procurement.
Draft working paper v0.7, Abilian Econ Lab.
https://econ.lab.abilian.com/papers/exit-or-own/