APIs land differently in every industry, and the politics of how they land — who they empower, who they threaten, how they’re regulated, and who controls the standards — varies enormously from sector to sector. I’ve spent years watching APIs move through banking, healthcare, telecommunications, energy, government, drones, and more, and the lesson is that there’s no single “API economy” experience. There’s the banking API experience, shaped by financial regulation and incumbent power. There’s the healthcare API experience, shaped by patient privacy and interoperability mandates. There’s the telecom experience, shaped by net-neutrality politics. Each industry has its own power structures, its own regulatory environment, and its own political fights over what APIs should and shouldn’t be allowed to do. Understanding the politics of APIs means understanding that the technology is the same but the stakes, the players, and the power dynamics are radically different across sectors.
The early recognition was simply that APIs are key to industry growth, which I wrote in 2011 — but even then it was clear that different industries would adopt at radically different speeds and with radically different politics. Twilio’s strategy, which I described memorably in 2014 as “Twilio-ing the hell out of the largest and most important industries,” was about taking the API-first approach into sector after sector — communications first, then expanding into the verticals where the same disruptive pattern could play out. The pattern repeats but the politics differ: in some industries APIs are welcomed as innovation, in others they’re resisted as threats to incumbent control, and in still others they’re imposed by regulators against industry wishes. The industry context determines which of these dynamics dominates.
Banking is the industry where the politics of APIs have been most consequential and most instructive, and I followed it closely for years. Banking didn’t adopt APIs voluntarily out of innovation enthusiasm — it was, in significant part, regulated into doing so. PSD2 in Europe was the watershed: I wrote in 2017 about how PSD2 meant no more scraping of banking data in Europe, only APIs — the regulation effectively mandated that banks expose APIs and prohibited the insecure screen-scraping that had been the norm. Open banking in the UK, which I tracked closely and even contributed to influencing, was regulation forcing an industry to open up against the wishes of incumbents who’d rather keep their data locked away. The politics here are stark: banks held the data and the power, fintech challengers wanted access, and regulators used API mandates as the lever to force open a closed industry. The sustained storytelling I did about the banking industry was part of a years-long campaign to shift an entire sector’s relationship to APIs — and the real movement came when regulation, not persuasion, made it mandatory.
Healthcare is the other deeply regulated industry where API politics reached the level of legal mandate, and the stakes are intensely personal. Healthcare data is among the most sensitive and most locked-up data there is, and the politics of opening it through APIs involves patient rights, privacy, incumbent provider control, and life-or-death interoperability. The HHS and CMS rules I wrote about in 2020 — mandating that healthcare providers and insurers expose APIs to give patients control of their health data — were government using API mandates to break open an industry that had kept patients locked out of their own records. This is the political use of APIs at its most direct: a regulator deciding that patients have a right to their data and using an API mandate as the mechanism to deliver that right against industry resistance. The healthcare API politics are about power over information that people desperately need, and APIs became the contested ground for who controls it.
The emerging-technology industries show a different politics — the politics of regulation racing to catch up with innovation. The drone industry is a case I followed closely, where companies like AirMap positioned themselves as critical API brokers for an industry that was being regulated in real time. The Internet of Things, as I wrote in 2016, shows us how regulatory beasts are created — new technology creating new risks creating new regulatory regimes, with APIs at the center of how those regimes get implemented and enforced. Telecommunications carries its own charged politics: I wrote about Verizon’s API delivering faster internet for those who pay, which is the net-neutrality fight expressed at the API layer — APIs becoming the mechanism for tiered access and differential treatment. The GSMA Open Gateway APIs, standardizing capabilities across mobile networks, represent the telecom industry trying to coordinate API standards across fierce competitors. Each emerging-tech industry has its own version of the same political question: who gets to set the rules for how this new capability is accessed and controlled.
The framing I’ve landed on, and which I sharpened in writing about the top industries in need of API regulation, is that the politics of APIs is fundamentally industry-specific because power is industry-specific. I argued that payments, healthcare, and advertising are among the industries most in need of API regulation — and the common thread is that these are industries where a small number of powerful incumbents control data and access that affects everyone, and where API regulation is the lever for forcing standardization, transparency, and consumer access. The political question in every industry is the same at its core — who controls the data and the access, and on whose terms — but the answer plays out completely differently depending on the industry’s structure, its incumbents, its regulators, and its stakes. Banking gets PSD2 and open banking. Healthcare gets the HHS interoperability mandates. Telecom gets the net-neutrality fights. Each industry’s API politics is a reflection of its broader power structure, and APIs become the contested terrain where those structures are either reinforced or challenged. That’s why I’ve never treated “the API economy” as monolithic — the real story is in the sector-by-sector politics, where the same technology produces wildly different fights depending on who holds the power and what’s at stake.
References
- APIs Are Key To Industry Growth
- Verizon API Delivers Faster Internet For Those Who Pay
- Twilio The Hell Out Of The Largest And Most Important Industries
- Keeping An Eye On The Open Banking API Movement In The UK
- AirMap Is Positioning Itself To Be A Critical API Broker For The Drone Industry
- The Sustained API Storytelling Assault On The Banking Industry
- The Internet Of Things Shows Us How Regulatory Beasts Are Created
- No More Scraping Of Banking Data In Europe According To PSD2, Only APIs
- What Is Open Banking In The UK
- HHS And CMS Finalizes Rules To Provide Patients More Control Of Their Health Data Using APIs
- Standardizing Mobile Networks With The GSMA Open Gateway APIs
- The Top Three Industries In Need Of API Regulation
