A FRAND Regime for Dominant Digital Platforms

Author:Mathew Heim - Igor Nikolic
Position:Mathew Heim, Tanfield Chambers, is also Senior Adviser to 4iP Council. Dr. - Igor Nikolic is Assistant Professor at Tilburg University. This paper was drafted with the support of 4iP Council and expands on a scoping paper submitted to the European Commission on Sept. 29th, 2018 by 4iP Council entitled A FRAND regime for dominant digital...
Pages:38-55
SUMMARY

European Copyright Law. The concept must be clarified and given a broad meaning in order to cover both uses which are authorized by the right holders, but are also not restricted by law, by taking into account the legal ideals of fairness and reasonableness. This change must be accompanied by the recognition of all copyright exceptions as jus cogens and the establishment of effective procedural... (see full summary)

 
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2019
Mathew Heim and Igor Nikolic
38
1
A FRAND Regime for Dominant
Digital Platforms
by Mathew Heim and Igor Nikolic*
© 2019 Mathew Heim and Igor Nikolic
Everybody may disseminate this ar ticle by electronic m eans and make it available for downloa d under the terms and
conditions of the Digital P eer Publishing Licence (DPPL). A copy of the license text may be obtain ed at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Mathe w Heim and Igor Nikolic, A FRAND Regime fo r Dominant Digital Platf orms, 10 (2019) JIPITEC
38 para 1.
innovate. The paper shows that, beyond the applica-
tion of FRAND in the competition law context, the Eu-
ropean Union institutions have consistently used the
FRAND regime to ensure access to critical infrastruc-
ture or inputs. The FRAND regime has been applied
in EU legislation such as standardisation, chemicals,
electronic communications framework, public sector
information, research framework, vehicles emissions,
payment services, credit rating agencies and bench-
mark regulations. It has proved itself to be a flexible
and pragmatic tool, able to apply to different market
dynamics and bottlenecks. Drawing out the common
elements of this European FRAND access regime, the
paper considers how it could be applied as a regula-
tory solution for dominant digital platforms.
Abstract: Dominant digital platforms are un-
der increased scrutiny by regulators around the world,
notably competition authorities. Much of the discus-
sion focuses on market access and contestability.
However, many doubt whether traditional competi-
tion law enforcement can, by itself, be an adequate
solution to the challenges posed by dominant digi-
tal platforms. Instead, a broader regulatory solution
could be devised to ensure effective competition and
to provide access to critical platforms or access to
data. On the premises that regulation is warranted,
this paper considers whether a Fair, Reasonable and
Non-Discriminatory (FRAND) access regime could
be a solution to ensure effective competition, while
maintaining the incentives of dominant platforms to
A. Introduction
1 The European Commission is considering what role
competition policy may play in addressing concerns
linked to the market power of digital platforms.1 The
question is apposite, given that digital platforms
* Mathew Heim, Taneld Chambers, is also Senior Adviser to
4iP Council. Dr. Igor Nikolic is Assistant Professor at Tilburg
University. This paper was drafted with the support of 4iP
Council and expands on a scoping paper submitted to the
European Commission on Sept. 29th, 2018 by 4iP Council
entitled A FRAND regime for dominant digital platforms?
Contribution by 4iP Council to the European Commission’s
workshop on Shaping Competition Policy in the Era of Digitisation.
The opinions expressed in this paper are those of the
authors and do not necessarily represent the opinions of
4iPCouncil nor its members.
1 See <http://ec.europa.eu/competition/scp19/>.
can grow – and have grown – to signicant scale
and their market position, exacerbated by network
effects, may soon appear unassailable. The impact
of dominant digital platforms can also be felt on
adjacent and downstream markets, whether as a
result of multi-sided markets or possible leveraging.
Yet applying traditional competition law doctrines
to evolving technology markets raises a host of
challenges for regulators.
2 In addition to more “classic” competition concerns,
new issues, not traditionally within the competition
policy space, are increasingly being voiced. These
issues include the following: the importance of data
as the fuel of the new economy; privacy and data
protection; media plurality; and democratic health
or the like.
Keywords: Access; competition law; data sharing; digital platforms; digital single market; FRAND; interoperability
A FRAND Regime for Dominant Digital Platforms
2019
39
1
3 At the same time, the European Commission is also
considering how to build a strong European policy
that would leverage the data economy, articial
intelligence, the internet of things, blockchain and
other key enabling elements to Europe’s digital
future,
2
in which competition enforcement may play
a secondary role.3 Classic competition enforcement
is therefore but one of the tools available to
policymakers in addressing some of the issues raised
by dominant digital platforms.
4
This paper explores how European policy and
legislation has addressed issues of access to critical
goods or services in the past, in order to provide
inspiration to the ongoing debate.
B. Summary
5
This paper reviews some of the practices of the
European Union (EU) institutions when seeking to
ensure access to critical infrastructure or inputs,
whether through enforcement or regulation, and
which can serve as inspiration to the European
Commission in considering how to address dominant
digital platforms. We focus on one particular access
regime, that can be set up either ex ante or applied
as an ex post remedial solution in order to enable
fair-trading conditions between digital platforms
and users. Ensuring trading between a dominant
digital platform and others on Fair, Reasonable and
Non-Discriminatory (FRAND) basis might be a very
useful option, given that FRAND is a commonplace,
exible and proven mechanism that is relied on in
both commercial agreements and regulation.
6
This paper starts from the position that dominant
digital platforms will likely face regulation in one
form or another.
4
The aim of the paper is to show
2 See European Commission, Building a European Data Economy
(Communication) COM (2017) 9 nal; European Commission,
Towards a common European data space (Communication)
COM (2018) 232 nal; European Commission, Proposal for
a Regulation of the European Parliament and of the Council on
promoting fairness and transparency for business users of online
intermediation services (Communication) COM (2018) 238
nal 2018/0112 (COD); European Commission, Articial
Intelligence for Europe (Communication) COM(2018) 237
nal. See also Begona Otero, Evaluating the EC Private Data
Sharing Principles: Setting a Mantra for Articial Intelligence
Nirvana?, 4iP Council, December 2018. Available at: <https://
www.4ipcouncil.com/application/les/8315/4394/1658/
Evaluating_the_EC_Private_Data_Sharing_Principles.pdf>.
3 For example, in its Proposal for an online intermediation services
Regulation the European Commission acknowledges a lacuna
in addressing “unilateral potentially harmful trading
practices” by digital platforms that are not necessarily
competition law infringements and which European
competition law may therefore not address.
4 As Cremer put it, “Given their societal importance, there
will be strong regulations of platforms”. See Jacques
that, on that assumption, the FRAND access regime
has shown itself to be a exible tool for managing
platforms and could be applied as a safe harbour or
a regulatory solution to dominant digital platforms.
7 The paper is structured as follows. We rst review
competition law issues surrounding the conduct
of dominant digital platforms. Second, we look
at the applicability of FRAND access principles in
relevant competition cases. We then review the
FRAND access concept applied in some key EU
legislation governing standardisation; chemicals;
electronic communications framework; public
sector information; research framework; vehicles
emissions, payment services; credit rating agencies
and benchmark regulations. This is not a forensic
review of European FRAND-based legislation but
seeks instead to capture the principal examples
thereof. Finally, we summarise some of the essential
elements of the European FRAND regime before
concluding.
C. Issues surrounding the
application of competition law
in regulating the conduct of
dominant digital platforms
8
How to assess the effects of dominant digital
platforms on competition and what, if anything,
should be done is subject to an ongoing debate in the
literature and policy circles.
5
The fundamental issue
is that dominant digital platforms effectively create
an ecosystem lock-in. This may be either because
competition is often “for” the market not “on” the
market, or because the platform functions as de
facto gatekeeper to an ecosystem, pulling in service
or content suppliers, intermediaries, customers or
consumers.6
Cremer presentation at ICLE/University of Leeds
Annual Competition Law Conference 25 October 2018,
Washington DC.
5 For example, the US Federal Trade Commission is currently
looking at “the identication and measurement of market
power and entry barriers, and the evaluation of collusive,
exclusionary, or predatory conduct or conduct that violates
the consumer protection statutes enforced by the FTC, in
markets featuring “platform” businesses.” See <https://
www.ftc.gov/news-events/press-releases/2018/06/ftc-
announces-hearings-competition-consumer-protection-
21st>. See also the inquiry by the Australian Competition
and Consumer Commission into the market power of digital
platforms e.g. <https://www.accc.gov.au/focus-areas/
inquiries/digital-platforms-inquiry>. See also Khan, Lina,
Amazon’s Antitrust Paradox (January 31, 2017). Yale Law
Journal, Vol. 126, 2017.
6 See US Senator Mark Werner’s observation regard: “certain
technologies serve as critical, enabling inputs to wider
technology ecosystems, such that control over them can be
leveraged by a dominant provider to extract unfair terms

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