Interoperability and open standards: the key to a real openness

Author:Simone Aliprandi
Position:Lead of the Copyleft-Italia.it Project, member of Array (Arraylaw.eu) and Ph.D. Candidate at Bicocca University of Milan
Pages:5-24
Interoperability And Open Standards: The Key To True Openness And Innovation 5
Interoperability And Open Standards:
The Key To True Openness And Innovation
Simone Aliprandi,
a
(a) Lead of the Copyleft-Italia.it Project,
member of Array (Arraylaw.eu) and
Ph.D. Candidate at Bicocca University of Milan
DOI: 10.5033/ifosslr.v3i1.53
Abstract
Most people agree that providing a shared set of standards produces a
broad advantage for all actors involved in the ICT market. First of all,
its an advantage for active operators in that market (companies,
developers, designers), but also for users of computer technologies,
simple observers and scholars as well.
However, if on one hand the same concept of standard appears to be
quite intuitive and broadly known, on the other hand not so many
people are aware of the complex dynamics behind the standard
definition process, particularly in relation to todays globalized and
technology-savvy world. Even fewer people seem aware that, when a
standard definition process is not being carried with true transparency
and care, this procedure could even become counterproductive for the
innovation itself. Therefore, in recent years, a new approach for the
standard definition process has been emerging, with the aim of
producing standards based on the broadest level of openness and
interoperability: the so-called open standards.
This essay will start by addressing the broad concept of standards, with
specific reference to the world of technology; later, it will focus on the
drafting process of standards, highlighting major problems regarding its
legal, economic and technology aspects. The final section will
concentrate on the very concept of an open standard.
Keywords
Free Libre and Open Source Software; Innovation; Open standard;
Open format; Standardization; Standard-setting process; Standard-
setting organizations; Interoperability; Copyright; Royalty-free; Patent.
1. The crucial role of interoperability
Many sources consider interoperability one of the key features pertaining to freedom of information
in a broader sense. Indeed, the lack of this interoperable by default feature threatens to crumble the
whole FLOSS (Free Libre and Open Source Software) system.
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6 Interoperability And Open Standards: The Key To True Openness And Innovation
According to its general definition, interoperability is the intentional design of a technology product
or system, which allows it to cooperate with other products or systems without restriction or
difficulty, thus producing a reliable outcome and resource optimization. The main goal of an
interoperable system is to facilitate interaction between different software applications and to enable
sharing and re-use of information among non-homogenous systems.
Based on this definition and given the current evolution and state of the mass computer market, it is
clear that interoperability plays a pivotal role in ensuring competition between all of the actors
involved. Major computer companies with large market shares can easily control and limit the
competitive power of their rivals with intentional product design, a conduct defined by the
competition law as abuse of dominant position.
Lets consider a typical scenario of a global corporation that produces the most common operating
system, while, taking advantage of the basic tools provided by the industrial trade law (industrial
secret, copyright, patent), effectively prevents other companies from accessing the data needed to
develop applications fully compatible with their operating system. In this fashion, the corporation
would also effectively appropriate the application market, given the competitive edge provided by the
internal availability of their data. Similar practices should be (and, fortunately, actually are)
monitored and properly sanctioned by the Antitrust Authorities.
The complexity and importance of those aspects within the current economy put the spotlight on the
central role of interoperability. Indeed, during the last few years this issue has gained particular
relevance in public opinion and in International policy bodies as well. As a result, today, we have a
more articulate and adequate definition of interoperability, promoted by a research study launched
and concluded in 2004 by the IDABC (Interoperable Delivery of European eGovernment Services to
public Administrations, Businesses and Citizens) on behalf of the European Commission. The study
focused on the implication of e-government and the relationship between citizens and public
Administrations. In the final report, this research includes a detailed definition of the interoperability
concept and a list of major objectives pertaining to the EU States. The document title is European
Interoperability Framework for pan-European eGovernment Services, also known by its acronym
EIF. Paragraph 1.1.2. provides the following introduction to the actual definition of interoperability:
Interoperability means the ability of information and communication technology (ICT)
systems and of the business processes they support to exchange data and to enable the
sharing of information and knowledge.
Later on, the EIF document delves into the practical issues of this concept by detailing its three
different levels, that is: organizational, semantic and technical interoperability:
Organizational interoperability. This aspect of interoperability is concerned with
defining business goals, modelling business processes and bringing about the
collaboration of administrations that wish to exchange information and may have
different internal structures and processes. Moreover, organisational interoperability
aims at addressing the requirements of the user community by making services
available, easily identifiable, accessible and user-oriented.
Semantic interoperability. This aspect of interoperability is concerned with ensuring
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Interoperability And Open Standards: The Key To True Openness And Innovation 7
that the precise meaning of exchanged information is understandable by any other
application that was not initially developed for this purpose. Semantic interoperability
enables systems to combine received information with other information resources and
to process it in a meaningful manner. Semantic interoperability is therefore a
prerequisite for the front-end multilingual delivery of services to the user.
Technical interoperability. This aspect of interoperability covers the technical issues
of linking computer systems and services. It includes key aspects, such as open
interfaces, interconnection services, data integration and middleware, data presentation
and exchange, and accessibility and security services.
1
Here, it is useful to quote a tip by computer adviser Bob Sutor, who recommends avoiding any
confusion with the intraoperability concept some kind of fake interoperability where a single
product or standard or platform remains still predominant in regards to other comparable items.
I think the word 'interoperability' is being similarly abused. When a single vendor or
software provider makes it easier to connect primarily to his or her software, this is more
properly called intraoperability. In the intraoperability situation, one product is somehow
central and dominant, either by marketshare, attitude, or acquiescence. The connectivity is
supported by protocols and data formats that favor the central software, and those are
often prescribed by the provider. […] Compare this with real interoperability. In this
situation, we use truly open standards that do not favor any one software provider. They
work to allow two pieces of software to work together as they do any two others.
Certainly one of the providers might have a superior market position, but it is not given or
maintained by the asymmetrical intraoperable situation.
2
2. The standard concept
Within the context of interoperability, the concept of standard emerges as a common but often
overlooked feature. Any generic dictionary could provide the following definitions for the term
standard:
Something, such as a practice or a product, that is widely recognized or employed,
especially because of its excellence.
3
A pattern or model that is generally accepted.
4
Both definitions make clear that this concept does not refer exclusively to the technology field, but
more in general to the manufacturing and industrial markets.
However, by limiting our analysis to the technology field, it becomes easy to understand how the
standard concept pairs perfectly with the interoperability concept. Indeed, a broadly recognized
1http://ec.europa.eu/idabc/en/document/3473.html
2 Sutor, Bob (2006) 'Interoperability vs. intraoperability: your open choice', http://www .sutor.com/newsite/blog-open/?
p=1260
3http://www .thefreedictionary.com/standard
4http://dictionary.cambridge.org/dictionary/british/standard_2
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8 Interoperability And Open Standards: The Key To True Openness And Innovation
standard, whose features are publicly available, fosters the development of adequate technology
solutions along two directions: by accessing such information, designers and developers can avoid
wasting resources and have more opportunities to see their product succeed in the market; since the
products designed are based on shared standards, the final users will have assurance that such
products will actually perform seamlessly together.
This approach is also confirmed by an interesting definition to be found in the online encyclopedia
Webopedia:
[A standard is] a definition or format that has been approved by a recognized standards
organization or is accepted as a de facto standard by the industry. Standards exist for
programming languages, operating systems, data formats, communications protocols, and
electrical interface. From a user's standpoint, standards are extremely important in the
computer industry because they allow the combination of products from different
manufacturers to create a customized system. Without standards, only hardware and
software from the same company could be used together. In addition, standard user
interfaces can make it much easier to learn how to use new applications.
5
3. Differences between de jure and de facto standards
A traditional distinction pertaining to the standard field lists two major categories here below
sketched in a simple way just to provide a general introduction, while a deeper analysis will follow in
further sections of this essay. These two categories are: de jure standard and de facto standard.
De jure refers to a standard ensuing after a fair technical analysis and definition process, carried out
by the appropriate organizations, and based on a formal definition and description drafted in a
specific document. As a result, the organizations in charge of these tasks are known as standard-
setting organizations (or more generically, standardization bodies).
These norms are being drafted through a complex mechanism that includes consultation and analysis
stages carried by the regulatory body, along with experts in the specific industrial sector and the so-
called stakeholders, that is, all actors potentially interested in the emerging standard.
Obviously, a specific norm becomes more authoritative when relying, in particular, on the quantity of
stakeholders involved in the definition process and on the transparency and precision of the final
standard description. The following sections will further investigate the dynamics of the regulatory
process.
It should be noted here, however, that not always does any given model raise to the de jure standard
status. In fact, while some reference models are commonly considered standard simply because of
their widespread dissemination, they have never actually been recognized as such by the appropriate
organizations through a regular standardization process. In these instances, we have a de facto
standard.
6
5http://www .webopedia.com/TERM/S/standard.html
6 Here is the de facto standard entry on the Webopedia Computer Dictionary: A format, language, or protocol that has
become a standard not because it has been approved by a standards organization but because it is widely used and
recognized by the industry as being standard (available at: http://www .webopedia.com/TERM/D/de_facto_standard.html )
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Interoperability And Open Standards: The Key To True Openness And Innovation 9
Therefore, we should focus our attention on the generic definition just mentioned above, where a
major role is played by an unspoken agreement. Indeed, any definition implies a unifying element
upon which a technical model could easily be considered a standard by virtue of a general agreement,
that is, based on a more or less explicit acceptance.
In this context, it is worth taking into account another definition for the term standard, included in
the Frequently asked questions section of the International Organization for Standardization (ISO)
website:
[A standard is] a documented agreement containing technical specifications or other
precise criteria to be used consistently as rules, guidelines, or definitions of characteristics
to ensure that materials, products, processes and services are fit for their purpose.
7
For comparison purposes, here is the definition included in the document drafted by ISO/IEC and
called 'Rules for the structure and drafting of International Standards':
[A standard is] a document, established by consensus and approved by a recognized
body, that provides, for common and repeated use, rules, guidelines or characteristics for
activities or their results, aimed at the achievement of the optimum degree of order in a
given context (note: Standards should be based on the consolidated results of science,
technology and experience, and aimed at the promotion of optimum community
benefits).
8
4. The standardization process
As mentioned earlier, the path leading to an actual standard definition is called a standardization (or
regulatory) process: it involves several stages, relies on the conventional features defining the standard
itself and is carried out by specialized bodies whose authority and credibility are widely recognized.
Defining a standard differs from the creation of a typical legal norm. The standard refers essentially
to the idea of a norm intended as a kind or model to which operators of a specified market
should adhere to in order to be part of the game, to avoid risking the exclusion from the game itself
(or at least a tougher participation). In other words, in the common meaning (legal norm) the
founding idea is based on a social group whose individuals are all bound to abide by certain rules and
where any violation leads to a judicial sanction. Instead, the other instance (standard definition)
implies a reference model defined by conventional dynamics, and any interested party (market
operators) can choose whether to accept them keeping in mind, though, that the choice of non-
acceptance will lead to serious difficulties in its market operations.
The regulatory process, further detailed below, is one of the key points of todays innovation in a
world more and more permeated by technology. Accordingly, this is a very sensitive and complex
step, involving several issues of legal, economic, political and ethical nature well beyond
technology itself and requires a multi-faceted approach.
7http://www .iso.org/iso/support/faqs/faqs_standards.htm
8http://www .iec.ch/tiss/iec/Directives-Part2-Ed5.pdf
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4.1. Major principles of the standard-setting activity
The standard-setting activity is based on a few general principles whose compliance is essential to
provide reliability and authority to the final standard. Those principles are:
A consensual agreement, that is, reaching the maximum consensus possible between
all parties involved in the regulatory process. This is a pillar feature for the credibility
of the entire process and the overall standard stability;
A democratic procedure, given that a process based on democratic mechanisms
ensures that all parties are being represented in each stage […] and that they can
concur in a leveled way to a project consensual approval;
Transparency, given the importance of ensuring that along the standard-setting
process all involved parties have the right, and the duty as well, to understand the
rules of the game, that is, the regulations governing the activities of the various
committees and working groups and their areas of expertise, along with full access to
any documentation detailing the very regulatory process in progress.
9
Of course, these are mostly ideal principles that should give shape to the standard-setting process.
In fact, we shall see that not all standard setting organizations follow these principles in a consistent
and regular way.
4.2. The stages of a standard-setting process
Each standardization body issues its own norms, adopts its own procedures and follows its own
practices for the standardization process. However, in almost any standardization process there is
bound to be a shared paradigm upon which our analysis can rely. According to the model proposed
by ISO
10
, each process develops along three general stages:
The need for a standard is usually expressed by an industry sector, which
communicates this need to a national member body. The latter proposes the new work
item to ISO as a whole. Once the need for an International Standard has been
recognized and formally agreed, the first phase involves definition of the technical
scope of the future standard. This phase is usually carried out in working groups,
which comprise technical experts from countries interested in the subject matter.
Once agreement has been reached on which technical aspects are to be covered in the
standard, a second phase is entered, during which countries negotiate the detailed
specifications within the standard. This is the consensus-building phase.
The final phase comprises the formal approval of the resulting draft International
Standard (the acceptance criteria stipulate approval by two-thirds of the ISO members
that have participated actively in the standards development process, and approval by
75% of all members that vote), following which the agreed text is published as an ISO
International Standard.
9 These three principles are listed in UNI (eds.) (2006) 'Le regole del gioco', UNI (p. 22), available online at:
http://www .uni.com/uni/controller/it/chi_siamo/regole_gioco.htm
10 http://www .iso.org/iso/standards_development/processes_and_procedures/how_are_standards_developed.htm
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According to another source,
11
the definition of an International Standard could also
pursue the following steps:
Proposal and necessity evaluation about the standard itself;
Putting together a first draft;
Consensus seeking based on that draft;
A broader inquiry stage, with the project being disseminated outside the circle of
interested parties to gather comments, suggestions, criticism or support;
Approval of the final draft by the standard-setting organization;
Publication of the official standard;
A possible revision stage, in case of specific requests or needs emerging after its
publication.
It is clear that this second scheme is just a more detailed version of the previous procedure.
In most cases, the drafting of the standard technical language is being managed by internal
committees and working groups, including experts representing all interested economic and social
stakeholders (producers, suppliers, customers, final users, distributors, research centers, consumers,
public administration officials, etc.). Therefore, the standardization body exerts mostly a working
coordination role and makes its own organizational structure available.
Finally, it should be noted that there has been an increasing trend where international standardization
bodies decide to adopt a standard already formalized by other regulatory bodies: in these instances,
we have a so-called second degree standardization.
This trend is particularly evident in complex application areas (such as, indeed, the ICT sector),
where the standardization process requires long and articulated technical evaluations and could result
in a better outcome if managed by a specialized body. This way, such body could address the
standard at an advanced stage for a final revision and ratification.
4.3. Standard publication and usage
The standardization process produces a final text or hypertext document, including all necessary
information to follow and reproduce the model described there the so-called standard
specifications. Therefore, companies interested in developing a product according to that standard
must have full access to those specifications.
With few exceptions, as explained below, at this stage the major standardization bodies see the
documentation produced as content covered by industrial trade law (secret, copyright). As a
consequence, usually those standardization bodies do not distribute their documentation free of
charge (except for a few particular instances) and, in order to access it, the interested operators must
pay a royalty and acquire the necessary permission.
11 UNI (eds.) (2006) 'Le regole del gioco', UNI (p.108), available online at:
http://www .uni.com/uni/controller/it/chi_siamo/regole_gioco.htm
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Relying on such rights, the standardization body could even decide to regulate access and use (and,
indirectly, the implementation) of that standard by the customer. It is important to point out, however,
that these considerations essentially pertain to the standard documentation access, rather than to the
subsequent stage of its implementation. In fact, in addition to legal protection to access the standard
documentation, there could also be some industrial property rights (that is, patents) on the technical
solutions included and described in the standard itself. Therefore whoever acquires such
documentation could still be prevented from adopting and implementing the standard, unless by
paying another royalty to the possible patent holders.
12
This is a crucial distinction to fully understand the legal intricacies related to regulatory and
development issues within the technology sector. On the other hand, as we will soon illustrate,
intellectual property management i.e., the licensing of patents is indeed one of the most
sensitive matters in the field of standardization.
Finally, we should keep in mind that most of the revenue for the standard-setting organizations
besides membership fees from associated or affiliated parties comes from distributing the
documentation related to those standards and from licensing the standard itself to be implemented by
entities (companies and other professional operators) not actively involved in the standardization
process itself.
5. The ICT sector: between de facto standards and network externalities
As mentioned earlier, the issues around interoperability and shared standard have particular relevance
in the ICT sector. In this context, Massimiliano Granieri effectively points out that the proliferation
of rights and stakeholders involved in the standard definition of a certain product grew very large in
the information and communication industry, featuring complex assets and system assets where
interoperability becomes the basic condition for existence of the market.
13
Therefore, the direct link between this picture and the strong presence of network externalities makes
the ICT sector more inclined than other fields to the affirmation of de facto standards and not-so-
virtuous market dynamics, where the winner is not the best but rather the strongest and most
determined actor.
14
As illustrated in the previous chapter, in the past there have been some instances of successful de
facto standards, that is, reference models able to force themselves and settle due to smart market
strategies rather than on actual test of their features. It is safe to say that empirically the winner was
not always the most effective and innovative standard.
Indeed, the most emblematic and often mentioned case of such a situation points directly to the
technology world (specifically, about the home video-recording formats): the VHS format, proposed
12 According to some sources, this behaviour is a threat to the entire standardization process. For example, see this detailed
report about the Rambus case provided by Carlo Piana: http://www .piana.eu/rambus_ce .
13 Calderini, M.; Giannaccari, A.; Granieri, M. (2005), 'Standard, proprietà intellettuale e logica antitrust nell'industria
dell'informazione', Il Mulino (p. 34)
14 The de facto standard solution relies on market dynamics, self-regulation effects and operator support. The actual selection
of a de facto standard itself, which is not necessarily the best available, is exclusively or mostly due the power exerted by the
specific actors (as in the case of the Microsoft operating system); (ibidem, p. 45-46)
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in 1976 by JVC, defeated its direct competitor, the Betamax format, developed in 1975 by Sony. A
short summary of this story helps us to better understand the market dynamics behind similar
practices:
When home VCRs started to become popular in the UK, the main issue was one of
availability and price. VHS machines were available through the high street rental chains
such as Radio Rentals and DER (most of whom were owned by Ferguson Electronics, who
were part-owned by JVC, the inventors of VHS), while Beta was seen as the more
upmarket choice for people who wanted quality and were prepared to pay for it. By 1980,
out of an estimated 100,000 homes with VCRs, 70% were rented, and the presence of
three (the third being Video 2000) competing formats meant that renting was an even
more attractive choice, since a small fortune (about 2000 or $3900 in today's prices)
could be spent on a system which may become obsolete. By the time Betamax machines
became easier to rent, VHS had already claimed 70% of the market.
15
These strategic mechanisms supporting a de facto standard affirmation in the market are being
studied by economics theorists, particularly within the context of the so-called network economies
addressed earlier in this article.
6. Major issues facing the standardization process
The following paragraphs will try to focus our readers attention on the major issues highlighted by
the scientific literature (particularly in the legal and economic fields) regarding the standardization
process. More than a complete discussion, we will provide a general framework and food for
thought, referring to other and more specialized sources for a deeper assessment.
6.1. Standard and technology innovation
The framework outlined so far seems to suggest a common virtuosity and desirability of the
standardization itself. As a consequence, we could easily say that the existence of pre-defined
reference standards is always beneficial to technology development. However, most careful observers
underline that a much more complicated issue is at stake here.
When establishing a specific standard, even if under the most transparent and shared procedures, we
try to crystallize a specific reference model dictating the future development of a certain technology.
However, at the same, time we are fully aware that any development of technology relies on fast and
steady evolution knowing all too well that eventually any effort to crystallize will be overwhelmed
by the current of this flooding river. In other words, a specific standard would only illustrate the
current state of the art and the techniques pertinent to the moment of the standard setting, or just a bit
beyond that.
Therefore, the standardization process should take into account these dynamics and maintain a fluid
perspective in order to encourage rather than stifle innovation. The stakeholders involved in the
standardization process should consider a long-medium range viewpoint, so that the standard would
15 http://en.wikipedia.org/wiki/Videotape_format_war
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become a pillar and a foundation providing actual support to future technology solutions. This is the
reason why in most cases a technology model, when it is relatively solid and well-known, gets
recognized as a standard.
Mario Calderini points out a crucial issue when explaining that the standardization process comprises
an implicit co-existence between two opposing forces that should be kept under a tightly controlled
balance if our aim is to truly gain more neutrality and technological innovation:
On one hand, we have a typical problem related to the standardization process: ensuring
that the convergence procedures come to fruition with efficient outcomes (selecting the
best technology available) as soon as possible. On the other hand, we have to ensure a
virtuous coexistence between platform openness and interoperability and the need to
define a competitive context able to foster innovation.
16
As a consequence of this situation, another risk emerges: a badly structured standardization system
could lead to a deadlock and hardening of the market, where the replacement of an obsolete standard
with a more modern one could be stifled for purely strategic reasons. On the one hand, when a
standard has taken roots -- that is, it is being widely adopted by companies and broadly used by
consumers it encourages a natural inertia, which makes it particularly difficult to replace with a
new, innovative and technologically superior standard.
Addressing a key point within this framework, Andrea Giannaccari effectively underlines that
positive network features could become high entry barriers wisely modeled by lock-in
strategies with the not-so-remote risk that such practice could even lead to an oligopolistic tunnel,
thus putting offplay or delaying the entry of superior technologies.
17
6.2. Regulatory activities and intellectual property management
The growing need for a standardization approach in todays ICT field, aimed more and more at
technological convergence and integration, seriously calls into question some of the basic paradigms
of intellectual property. This is because the very standard definition development feeds on an
apparent contradiction: when a company gets involved in a standardization process, it is required to
play in the open, it must share its own know-how with the other stakeholders about the very
technology that is being considered in view of standardization. Obviously, in a broader sense, this
know-how includes not only the business secrets typical of any technology design and development
activity, but also (and foremost) industrial property rights such as patents and copyright.
The technical definition for this showdown is IPR (Intellectual Property Rights) disclosure, and it
represents one of the key points on the roadmap to standard definition. Indeed, the holders of
industrial property rights should truly embrace a collaborative and transparent approach, by openly
declaring their property rights on the technical solutions being considered for the standardization
process and by agreeing not to make strategic use of these tools of legal protection. In fact, we could
picture an instance (actually, not so rare), where one of the companies involved in the standardization
16 Calderini, M.; Giannaccari, A.; Granieri, M. (2005), 'Standard, proprietà intellettuale e logica antitrust nell'industria
dell'informazione', Il Mulino (p. 17).
17 ibidem (p. 91)
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process hides from the other stakeholders its own patent on part of the very technology that is
becoming a standard. That company could even decide to disclose its exclusive rights only after the
standard has been formalized and published, thus requiring a royalty fee or even threatening legal
action against the other parties. This would be an unfair behavior from the ethical and competitive
standpoint in the first place but also quite dangerous for the entire standardization system. This
system could easily be stifled and could miss its essential goal of establishing a virtuous platform
aimed at innovation and interoperability. This is the main reason behind transparent and consistent
policies adopted by major standard-setting organization on intellectual property).
18
In addition, we must consider that, as mentioned earlier, often after a standard has been formalized, it
still might contain technical solutions covered by some sort of property rights. Therefore, it is crucial
to avoid risking that the subsequent adoption of standards by operators foreign to the standardization
process itself could become a trap
19
with heavy consequences from a legal point of view. Indeed,
the discovery of a patent later on in the development stage of a product or application will put the
same developer in an extremely weak contractual position.
According to some authors, the instrumental use of intellectual property rights gains primary
importance for the functionality of standards and, if not properly monitored, it could even transform
into some sort of pathology capable of degrading the entire standardization system.
20
6.3. Standardization and competition issues
It is common knowledge that anti-trust bodies ensure fair market competition by closely monitoring
the organizations where compani