1 Björn Lundqvist, Associate Professor, Stockholm UniversityBig Data and Standard Setting The Issue of Interoperability and Access LCII-TILEC Conference May 2017 I WILL TALK ABOUT INTEROPERABILITY AND STANDARD SETTING FROM A BIG DATA OCH DATA PERSPECTIVE IT BASED ON A PAPER THAT I AM NOT SO HAPPY WITH AND ONLY GETS LONGER AND LONGER – SO PERHAPS I AM WRONG. Standardization for the Digital Economy - the Issue of Interoperability and Access Under Competition Law Faculty of Law, Stockholm University Research Paper No. 10, on SSRN

2 Agenda Firstly, Interoperability and standardisation, and the EU Commission’s promotion of joint standard-setting for IoT, and whether that is “good” Secondly, the Intellectual Property Landscape of the soon to come IoT is drawn up, discussed and scrutinized, and the current issue whether non-personal digital data should become a property right, in-itself, is analysed. What effects does this have on standard-setting?

3 Benefits with Interoperability and Internet of ThingsInteroperability has become a buzzword in European policy debates on the future of the digital economy. In its Digital Agenda, the EU Commission has identified a lack of interoperability as one out of seven “most significant obstacles” to the “virtuous cycle” of digitalization. Indeed, in an interconnected economy, interoperability of a broad variety of networks, devices and services will be key. The expected benefits of the Internet of Things and Industry 4.0 hinge on the interoperability between networks, software and data. In 2014 alone cross-border data flows generated 2.8 trillion USD, more than global trade in goods Big Data employment and market value in the EU and other major economies EU 6 million employees and market value of EUR 54 billion US 11 million employees and market value of EUR 115 billion THIS HAS TRIGGERED THE INTEREST OF THE REGULATOR, WHAT WAS HIS NAME – AND IS ONE OF THE REASON FOR THE DEVELOPING SOFT LAW FOR 5 G.

4 Interoperability There is a great need for IoT standards in general and workable IP guidelines for SEP under these standards Different layers of standards, e.g. Infrastructure and lower layer interoperability, while upper layer data interoperability is not technically necessary There is also a difference between horizontal and vertical interoperability. Devices and device producers need for standards and guidelines regarding infrastructure and data interoperability otherwise the system may not materialize. However, should data interoperability standards be created under a market-driven approach or more by a ”top-down” approach? infrastructural interoperability and data interoperability. While infrastructural interoperability enables devices to exchange data under common network protocols, data interoperability concerns more directly users and developers of IoT applications, allowing them to meaningfully connect mainly their software interfaces of those applications. Indeed, upper layer interoperability is attained by reading and reproducing specific parts of computer programs, called interfaces, which contain the information necessary to “run” programs in a compatible format. Zingales, Nicolo, Of Coffee Pods, Videogames, and Missed Interoperability: Reflections for EU Governance of the Internet of Things (December 1, 2015). TILEC Discussion Paper No Available at SSRN: https://ssrn.com/abstract= Ibid. Indeed, as Kerber and Schweitzer explain, ”[p]articularly important is the distinction between horizontal and vertical [sematic] interoperability. Horizontal interoperability denotes the interoperability of competing products, services or platforms. One example is the interconnection between communication networks. Vertical interoperability refers to the interoperability of a product, service or platform with complementary products and services. The degree to which complementary products (e.g., digital goods as music files or e-books) can be shared across different platforms, and complementary products of one platform can be accessed from rival platforms is said to characterize the horizontal openness of a platform. The ability of independent firms to offer complementary products on a platform stands for its vertical openness.” Kerber, Wolfgang and Schweitzer, Heike, Interoperability in the Digital Economy (January 31, 2017). Forthcoming in: Journal of Intellectual Property, Information Technology and Electronic Commerce Law (Jipitec); MAGKS, Joint Discussion Paper Series in Economics, No , 4. Available at SSRN: https://ssrn.com/abstract=  or http://dx.doi.org/ /ssrn Interste of the regulator, the commission

5 Actions from the EU CommissionEU’s policy with regard to collective standard-setting is not limited to privileging and supporting market-driven cooperative standard-setting endeavours, as a “bottom-up” approach. Indeed, Commission supports open European standards for 5G communications, for the IoT, for cybersecurity, big data and cloud computing, an “open platform approach that supports multiple application domains and cuts across silos”. Open standards shall support the entire value chain and integrate multiple technologies. In particular, the Commission is interested in such open platforms and standards in the area of eHealth, transport systems, including automated vehicles, smart energy and advanced manufacturing The EU Commission finds that it cannot be left to industry stakeholders to decide in which areas to develop standards, and at what speed. The EU Commission finds that it cannot be left to industry stakeholders to decide in which areas to develop standards, and at what speed. The Commission is determined to “define missing technological standards that are essential for supporting the digitisation of our industrial and services sectors” and To actively mandate European standardisation bodies for a speedy delivery of standards in order to “ensure that ICT-related standards are set in a way that is more responsive to policy needs” and sufficiently fast, being concerned that, at least in the ICT sector, standardization is increasingly taking place outside of Europe, potentially undermining European competitiveness, it EU Commission, A Digital Single Market Strategy for Europe, Brussels, , COM(2015) 192 fin., p. 15. According to the recently published ICT standardisation priorities (EU Commission, ICT standardisation priorities for the Digital Single Market, Brussels, , COM(2016) 176 fin., EU Commission, Communication “5G for Europe: An Action Plan”, Brussels, , COM(2016) 588 fin.: ”A lack of coordination between national approaches would “create a significant risk of fragmentation and implementation of standards and would delay the creation of a critical mass for 5G-based innovation in the Digital Single Market” (p. 3). The EU Commission finds that “standards are of paramount importance to ensure the competitiveness and interoperability of global communication networks” (p. 7) and plans to “foster the emergence of global industry standards under EU leadership for key 5G technologies (radio access network, core network) and network architectures” (p. 7)), open European standards for 5G communications, for the IoT, for cybersecurity, big data and cloud computing will be core. In various areas, the new digital economy requires an “open platform approach that supports multiple application domains and cuts across silos”. Open standards shall support the entire value chain and integrate multiple technologies (p. 7). In particular, the Commission is interested in such open platforms and standards in the area of eHealth, transport systems, including automated vehicles, smart energy and advanced manufacturing (p. 10 et. seq.). At the same time, the new standardisation processes shall take into account the blurring of the boundaries between traditional sectors and industries, products and services. They shall consider safety needs, data exchange and privacy concerns simultaneously (p.3) – aspects that, today, are typically dealt with separately. In this perspective, the Commission’s pro-collective standard-setting approach is not limited to addressing market failures. Rather, what resonates in these communications and statements is European standard-setting is a pro-active trade and industrial policy.”

6 Market Failures Firstly, market failure that requires an industry-wide standard is when the technology being standardized is of infrastructure character an the economic advantages are so great that the industry can only have one standard, i.e. when the ”try and error” approach do not suffice. Second, markets plauged with network effects and “tipping” or when one firm have become a monopolist. Presumably, a third market failure situation would be markets where IP thicket has become so wide that the industry or relevant market is not functioning or even emerging; and that access to SEPs need to be obtained through a industry wide de jure standard with the complementary SSO IP Guidelines. In this perspective, the Commission’s pro-collective standard-setting approach is not limited to addressing market failures. Wheer competition as schumpeter or Hayek does not work, it is nota trial and error market, you have to decide on one infrastructre. According to the recently published ICT standardisation priorities,3 open European standards for 5G communications,4 for the IoT, for cybersecurity, big data and cloud computing will be core. In various areas, the new digital economy requires an “open platform approach that supports multiple application domains and cuts across silos”. Open standards shall support the entire value chain and integrate multiple technologies (p. 7). In particular, the Commission is interested in such open platforms and standards in the area of eHealth, transport systems, including automated vehicles, smart energy and advanced manufacturing (p. 10 et. seq.). At the same time, the new standardisation processes shall take into account the blurring of the boundaries between traditional sectors and industries, products and services. They shall consider safety needs, data exchange and privacy concerns simultaneously (p.3) – aspects that, today, are typically dealt with separately. Rather, what resonates in these communications and statements is European standard-setting is a pro-active trade and industrial policy.

7 Standardisation InitiativesThere is currently a global SSO race for IoT. Several different and new SSOs are fighting to become part of the collaborations that enact the standards for the new IoT era. Also, CEN and CENELEC seem to be interested on the behalf of the brick and mortar industry, ” consider that there is no objection to the development of a standard that includes patented inventions provided that patent holders commit to make their technology available and grant a licence under FRAND conditions” Moreover, several pre-standard collaborations (consortia) are being formed including several different combination of important players for the technologies that might included in the IoT standards. That might be a competition law concern depending on the level of acceptance of these upper layer collaborations under Art. 101 TFEU. The Commission should take the standard in consideration when analysing a joint standard-setting effort. Of course, the incumbent SSOs are adapting to the new paradigm, e.g. ETSI even CEN and CENELEC claim relevance in the IoT paradigm. But there are special IoT SSOs. For example, in 2015, the Commission and various IoT players launched a large scale alliance called AIOTI (Alliance for Internet Of Things Innovation) with the aim to assist the European Commission in the innovation and standardisation policies. Whether these SSOs will be relevant in a world where Google (Brillo and Weave), Apple (HomeKit), Samsung (SmartThings), Amazon (Alexa) and Microsoft (Windows 10 IoT editions) are all bringing out their own IoT solutions is still to be seen. Perhaps, there will be no market for the SSOs and one of these firms will instead become the de-facto IoT standard just as Google’s Android became the de-facto open mobile OS? Cf. CEN and CENELEC (2016), 3 et seq. See conference paper by Ciani, (2016). Hughes ( 2016), 1 et seq.

8 IoT and its Infrastructure, i. eIoT and its Infrastructure, i.e. BIG DATA’s ecosystem what Intellectual Property Rights may become applicable? Second part of my article – where I intellectual property rights protection and/or by neighbouring legal protection. Indeed, the Digital economy, the technical aspects of IoT are, generally, protected by patents and copyright protected software, the investment in the collection of data may be protected by the sui generis data-base right and the data in aggregate may be a trade secret, while the data subject still holds some rights to it according to the General Data Protection Regulation (e.g. right to be forgotten and, possibly, data portability). ‘ Indeed, in light of the above, data, originating from users, from devices, sent through the 4G or 5G networks to the client servers and The Cloud are heavily boxed in by intellectual property rights. The intellectual property rights cater to the technologies, the infrastructure, while the data as such is, probably, not covered by the infrastructure intellectual property rights. However, firms holding large IP portfolios in the specific device industry might try to exclude or obtain licensing fees from a new user trying to access Data flowing in the system or stored in The Cloud connected to the specific device they produce. However, the network providers and the algorithm providers and, possible also the providers of the specific Cloud (if they are separate entities) may also try to either access the data collected by the specific device or even technically try to exclude the device producer or others from gaining access to the Data. In fact, the end will probably require these firms to collaborate. There are several news articles regarding for example the collaboration/license agreements between Microsoft and Facebook regarding the Microsoft Cloud. Also, users of the Microsoft Cloud needs to obtain a license from Microsoft, https://www.microsoft.com/en-us/Licensing/product-licensing/innovations-for-the-cloud.aspx., Accessed 18 September 2016. The development of IoT has recently prompted the CEN and CENELEC to publish a position paper regarding their IP Policies for the brick and mortar industry so to inform members and the public when access, according to CEN and CENELEC to SEPs in the IoT environment may be obtained, see CEN and CENELEC position on: STANDARD ESSENTIAL PATENTS AND FAIR, REASONABLE AND NON-DISCRIMINATORY (FRAND) COMMITMENTS . But there is also consortia development regarding I guess both infrastructral interoperability and vertcial interoperability…. See for example the AUDI AG, BMW Group, Daimler AG, Ericsson, Huawei, Intel, Nokia and Qualcomm Incorporated, announce 27 September 2016 the formation of the “5G Automotive Association”. https://www.ericsson.com/news/ telecommunications-and-automotive-players_ _c Source: Electronic Rocks

9 Volentary provided Data, e.g. Consumers or businessesThe data, the information (as such), irrespectively how private and how valuable, is not currently covered by property right, while GDPR, Arts give some rights. However, the infrastructure or ecosystem is covered ”Big Data” Government Data Volentary provided Data, e.g. Consumers or businesses User generated data, e.g. Platforms, ISPs, eCall, patient data, web crawlers From the general, brief, analysis above, even though possibly being a great source or wealth for the future, it is rather clear that Data, be it Big or Open, personal or not, is not directly covered by any intellectual property legal system, while still heavily embedded in intellectual property rights protection and/or by neighbouring legal protection. Indeed, the Digital economy, the technical aspects of IoT are, generally, protected by patents and copyright protected software, the investment in the collection of data may be protected by the sui generis data-base right and the data in aggregate may be a trade secret, while the data subject still holds some rights to it according to the General Data Protection Regulation (e.g. right to be forgotten and, possibly, data portability). Indeed, the high amount of intellectual property rights in the digital economy begs two general conclusions. Firstly, before creating new forms of property rights in data, as such, the market and the industry must be analysed in great detail. Do the industry benefit from property rights in data, or will it contractually be able to sort out any issues of controversy. Secondly, the technical standards seem to be inevitable in a digital economy with a great amount of intellectual property and where, as a major aspect for success, interoperability between devices and systems is of outmost importance. Cf. Art GDPR. The rights to personal data should however be weighted against the other rights acknowledge by the Charter. I am going to talk about bug data from three different sources, to find similarities and differences in the application fo competition law. I think it may be good to divide these three soruce since it seems the use of competition law, principles and policy have. Moreover, I will also show that there is sectro specific regulation in several areas, while still conclude that competition law holds an important place in refernce to bigg data. There is also differences between different industries, eCall v. Health care sector. Given the potential risk for thickets it might be concluded that neither data nor other technical, commercial or intellectual aspects of the developing data industry need more intellectual rights protection to flourish. The protection is already on a high level. However, as hinted to above, if noone owns data there is no clear rule whether the device producer, the network providers or algorithm providers or the Cloud service providers may exclude each other from the data. This might cause competition policy problems. Competition could possibly be enhanced if the device producers could enter the data industry as independent stand-alone competitors. Perhaps, this requires that they control the data created by their devices. Of course, this problem may be accentuated if there is network effects already present in the data industry, giving the incumbent firms a head start. In reference to the algorithms normally used to process data in data bases. Drexl et al, op sit, state: ”The Max Planck Institute for Innovation and Competition does not see any need to create special legal protection of algorithms used in data processing (e.g. in the context of big-data analysis).” And continues ”concrete computer programs for processing data are already protected by copyright law of the Member States implementing Directive 2009/24/EC of 23 April 2009 on the legal protection of computer programs. Nevertheless, this protection covers neither the functionality of a computer program (judgment in SAS Institute Inc., Case C-406/10, ECLI:EU:C:2012:259, paras 39-41) nor the underlying general algorithm (which is understood here as a set of rules to solve a problem step by step, independent of its expression and representation, e.g. the description of the steps to be made for analyzing or filtering data and the criteria to be applied). This is already implied by Recital 11 of the Directive, which clarifies that copyright protection for computer programs should not extend to the “ideas and principles which underlie any element of a program”. Some economist have suggested a property solution, see Wolfgang Kerber, Digital Markets, Data, and Privacy: Competition Law, Consumer Law, and Data Protection, 16 (April 26, 2016). MAGKS, Joint Discussion Paper Series in Economics, No Available at SSRN:http://ssrn.com/abstract=  or http://dx.doi.org/ /ssrn Source: French/German Competition Authorities Report on Big Data 2016; and OECD 2015

10 Sector Specific RegulationsDirective on Payment Service II eCall Regulation with apps From the general, brief, analysis above, even though possibly being a great source or wealth for the future, it is rather clear that Data, be it Big or Open, personal or not, is not directly covered by any intellectual property legal system, while still heavily embedded in intellectual property rights protection and/or by neighbouring legal protection. Indeed, the Digital economy, the technical aspects of IoT are, generally, protected by patents and copyright protected software, the investment in the collection of data may be protected by the sui generis data-base right and the data in aggregate may be a trade secret, while the data subject still holds some rights to it according to the General Data Protection Regulation (e.g. right to be forgotten and, possibly, data portability). Indeed, the high amount of intellectual property rights in the digital economy begs two general conclusions. Firstly, before creating new forms of property rights in data, as such, the market and the industry must be analysed in great detail. Do the industry benefit from property rights in data, or will it contractually be able to sort out any issues of controversy. Secondly, the technical standards seem to be inevitable in a digital economy with a great amount of intellectual property and where, as a major aspect for success, interoperability between devices and systems is of outmost importance. Cf. Art GDPR. The rights to personal data should however be weighted against the other rights acknowledge by the Charter.

11 eCall Regulation (more than rescue…eCall Regulation (more than rescue….) however, is the eCall already oudated… [Recital 16] In order to ensure open choice for customers and fair competition, as well as encourage innovation and boost the competitiveness of the Union's information technology industry on the global market, the eCall in-vehicle systems should be based on an interoperable, standardised, secure and open-access platform for possible future in- vehicle applications or services. As this requires technical and legal back-up, the Commission should assess without delay, on the basis of consultations with all stakeholders involved, including vehicle manufacturers and independent operators, all options for promoting and ensuring such an open-access platform and, if appropriate, put forward a legislative initiative to that effect. Furthermore, the 112-based eCall in-vehicle system should be accessible for a reasonable fee not exceeding a nominal amount and without discrimination to all independent operators for repair and maintenance purposes in accordance with […]. Access to insurance companies and leasing firms? A pricing issue? However, everything is done through apps now? Google patent right on the

12 Thank you! Dr. Björn Lundqvist, LL.M. (Michigan) Associate Professor, Juridicum Stockholm University Björn Lundqvist, Standardization for the Digital Economy - the Issue of Interoperability and Access Under Competition Law Faculty of Law, Stockholm University Research Paper No. 10, on SSRN,