Standardization for the Digital Economy

• DOI: 10.1177/0003603X17733359
• Date: 01 December 2017
• Author: Björn Lundqvist
• Published date: 01 December 2017

Article

Standardization for the Digital

Economy: The Issue of

Interoperability and Access

Under Competition Law

Bjo

¨rn Lundqvist*

Abstract

This article discusses several aspects of the Digital Economy. First, the data industry and the business

conduct of the approaching Internet of Things are presented. Second, the current standardization

efforts promoted by the European Commission are discussed, for example, what the challenges are,

how much should be standardized, and how prestandard consortia should be judged. Third, current

and future competition law issues for the Digital Economy, in reference to standardization, are

identified. The article states joint technology consortia for upper-layer standards, i.e. in the ecosys-

tems, should benefit from heightened scrunity under Article 101 of the Treaty on the Functioning of

the European Union (TFEU), while system leaders’ business conduct in the Digital Economy may be

judged in reference to Article 102 TFEU. The article concludes that the main issue under general

competition law in the Data Economy, at its current stage of development, is to create a level playing

field by trying to facilitate the implementation of the Internet of Things. Thus, competition authorities

should be cautious about the current ecosystem consortia driven standard-setting movement in the

Digital Economy, while also facilitating the application of Article 102 TFEU when system leaders

possibly abuse their dominance by not giving access to their respective ecosystems.

Keywords

Internet of Things, industrial internet, standardization, SEP, competition law, antitrust, big data, open

data, intellectual property law, privacy, data protection, psi, platforms, ecosystem

I. Introduction

The “Digital Economy,” the “Internet of Things” scenario, and “Big Data” are currently triggering the

interest of politicians, businessmen, the academic community, and even the general public. The groups

are interested for different reasons: businessmen see an opportunity for the creation of wealth;

researchers see the possibility of discussing issues of “paradigm shift,” globalization, and “change”;

*Law Faculty, Stockholm University, Stockholm, Sweden

Corresponding Author:

Bjo

¨rn Lundqvist, Law Faculty, Stockholm University, Stockholm, Sweden.

Email: bjorn.lundqvist@juridicum.su.se

The Antitrust Bulletin

2017, Vol. 62(4) 710-725

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DOI: 10.1177/0003603X17733359

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while everyone acknowledges that the collection and distribution of personal data may raise both

privacy and data protection concerns. The stakes are high. According to the European Commission, in

2014 alone, cross-border data flow generated estimated 2.8 trillion euros in economic value, exceeding

the value of global trade in goods.

1

Cross-boarder data flows are the fastest-growing component of EU

as well as U.S. trade. One study found that between 2008 and 2012, the cross-border flow of trade

increased 49%, while the increase of cross-border trade in goods was only 2.4%.

2

The interface between the legal systems triggered by the creation, distribution, and consumption

of data in the Digital Economy is difficult to grasp, and this article therefore initially tries to

generally describe the Digital Economy. The article attempts to identify what legal systems are

applicable when data is obtained from devices, sent to other devices, and/or distributed to the Cloud,

and, ultimately, when it is reused.

3

Third, the article specifically focuses on the application of

competition law vis-a`-vis the firms included in the standardization of the Digital Economy. Should

consortia-driven standard-setting be promoted by lenient treatment from the competition authorities,

or should consortia-driven standard-setting instead benefit from heightened antitrust scrutiny under

Article 101 of the Treaty on the Functioning of the European Union (TFEU)? In addition to this

discussion, other issues regarding standardization are discussed, that is, dominance and abuse. Can

competition law be used to identify “interoperability obstruction” and to facilitate access to ecosys-

tems in the Digital Economy?

4

The article concludes that general competition law may be applicable to access technical standards,

ecosystems, or digital platforms when system leaders control these, or when joint standard-setting in

consortia has been conducted exclude or obstruct access to relevant markets.

5

The main issue under

competition law in the Data Economy, in its current development, is to create a levelled playing field

by trying to facilitate the implementation of Internet of Things.

II. Data Economy for the Internet of Things

The creation, collection, storing of, commercially and technically using, and dissemination of

data, be it government (open) data and/or private (big) data,

6

require a number of components to

materialize. Most importantly, the data industry needs someone who wants to invest in the

collection and storing of data. Until lately, a government authority or a similar body has usually

been the data collector. Hence, a public sector body, based on an obligation in law, collecting

socially necessary data—concerning, for example, land ownership, trademarks, weather informa-

tion, maps, or company data—and storing the data on servers, has up until recently been the

“normal” data collector. While these public collectors have gradually started to market the data to

consumers on the Internet and to firms reusing the same (e.g., data brokers, or data reusers),

1. Commission Staff Working Paper on the free flow of data and emerging issues of the European data economy, COM /2017, 9

Final, 10 Jan. 2017.

2. Id.

3. See ARIEL EZRACHI &MAURICE E. STUCKE,VIRTUAL COMPETITION THE PROMISE AND PERILS OF THE ALGORITHM-DRIVEN ECONOMY

(2016); and MAURICE E. STUCKE &ALLEN GRUNES,BIG DATA AND COMPETITION POLICY (2016).

4. In referenc e to Open Data see Josef Drexl, The Compe tition Dimension of the European Regulation of Public Sector

Information and the Concept of an Undertaking,in STATE-INITIATED RESTRAINTS OF COMPETITION 64–100 (Josef Drexl &

Vicente Bagnoli eds., 2015). See also Bjo¨ rn Lundqvist, “Turning Government Data into Gold”: The Interface Between

EU Competition Law and the Public Sector Information Directive - With Some Comments on the Compass Case,44IIC1,

79–95 (2013).

5. C-170/13, Huawei Technologies, EU: C:2015:477.

6. The definition of Big Data is vague and lacks precision; see Andrea De Mauro, Marco Greco, & Michele Grimaldi, A Formal

Definition of Big Data Based on Its Essential Features,65L

IBRARY REVIEW 3, 122–35 (2016).

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