Competition in the digital ecosystem – Europe and beyond – WS 17 2021
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Since its creation the internet has claimed to be a sphere of equality and fairness for all its users. Today, however, we see how platforms and social media are establishing monopolistic positions at the expense of users and smaller companies. What does it take – technically and legally – to make the internet a free, affordable and and fair sphere for people and SMEs alike?
Content wise, this session will look at competition in the internet form 3 different angles:
- 1st what competition is about in theory, why we all profit from competition and how equality and how competition has been at the heart of the internet at its beginnings,
- 2nd technically, how interoperability should allow competition, how gatekeepers and social media platforms sometimes try to avoid competition and monopolize it instead,
- 3rd legally, how to allow, establish and enforce competition in the internet: focus on upcoming EU legislation and comparison with legislative initiatives in the USA, Australia, Japan.
Until 20 May 2021.
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Until 20 May 2021.
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- Christoph Riedmann, EUROCHAMBRES
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- Christoph Riedmann, EUROCHAMBRES
- Roberto Gaetano, EURALO
- Amali De Silva-Mitchell, Dynamic Coalition on Data Driven Health Technologies / Futurist
- Vittorio Bertola, Open-Xchange
- Alève Mine, Zurich AR/VR Meetup
- Alève Mine, Author of “Storytelling Automation Principles”, Founder of the Zurich AR/VR Meetup, Originator of the OneGoal Initiative for Governance.
- Vittorio Bertola, Head of Policy & Innovation, Open-Xchange
- Christoph Riedmann, Advisor for Digital Policy at EUROCHAMBRES, the European Chambers of Commerce and Industry
- Daniel Popovski, Australian Chamber of Commerce and Industry, Senior Advisor Economics and Industry Policy
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- Nigel Hickson, UK Government, Department for Digital, Culture, Media and Sport (DCMS) working on Digital Standards and Internet Governance
The moderator is the facilitator of the session at the event. Moderators are responsible for including the audience and encouraging a lively interaction among all session attendants. Please make sure the moderator takes a neutral role and can balance between all speakers. Please provide short CV of the moderator of your session at the Wiki or link to another source.
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Reporters will be assigned by the EuroDIG secretariat in cooperation with the Geneva Internet Platform. The Reporter takes notes during the session and formulates 3 (max. 5) bullet points at the end of each session that:
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- relate to the particular session and to European Internet governance policy
- are forward looking and propose goals and activities that can be initiated after EuroDIG (recommendations)
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- The European rules on competition in the digital landscape need to be simple and efficient. Simple, clear rules will make it easy for smaller companies to understand and follow them without profound legal expertise. Efficient rules are needed to tackle monopolies ex ante, before it is late to break up the monopolies that are usually formed very fast in the digital environment.
- There is a lack of interoperability between various online services and platforms. From the European perspective, there are ongoing initiatives pushing for more interoperability, but the coverage of such rules needs to include more services and platforms.
- A multilayered and multistakeholder approach is needed to tackle competition issues in the digital. The regulatory frameworks should establish the general principles to be followed, and this is a long-term process. There is also room for ethics frameworks and standards to guide future policy. In addition, multistakeholder involvement can help ensure that the regulation and the established principles are not watered down because of quickly evolving realities in the market.
Find an independent report of the session from the Geneva Internet Platform Digital Watch Observatory at https://dig.watch/resources/competition-digital-ecosystem-europe-and-beyond.
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>> STUDIO: Good afternoon. Welcome to the last part of the EuroDIG. We will probably wait for a minute or two until everyone gathers, and I’ll come back to you with bits of information about our panel and pass the floor to the moderator, Nigel Hickson. But let us wait a minute or two more, and then we’ll get back to you.
>> STUDIO: Okay. Time to start. I hope you managed to get your final cup of coffee today before we move to wine and beer and other celebrations after EuroDIG. The final session today in Belgrade studio is competition in the digital ecosystem, Europe and beyond. It will be moderated by Nigel Hickson UK Government, Department for Digital, Culture, Media, and Sport (DCMS) working on Digital Standards and Internet Governance. Before we start, I want to remind you once again of the session rules. Probably for the last time for this EuroDIG. Please enter your full name and affiliation so we know who is in the room.
If you want to ask a question, raise a hand in Zoom, there is an option near the participants’ list. Once the moderator gives you the floor, we will unmute you, but you should make sure that you switch on the video, if you can, introduce yourself again. Say your name and affiliation so we know who is speaking. At the same time, please use chat to the extent possible. We want to encourage discussions in the chat. And the Belgrade studio, me and my colleague Desiree who will join in a few minutes will help chat moderation and if something pops up to the questions or comments, we will try to feed into the main discussion. Yeah, I guess it doesn’t matter really about the Zoom link anymore.
I won’t go into introducing the panelists. I think Nigel is a better place for that. Without further ado, I will pass the screen to Nigel. Nigel, it is great to see you again. Well, the screen is yours.
>> MODERATOR: Well, thank you. Thank you so much. Ha-ha. Good afternoon. It is really good to see you. It is really good to be able to take part in a EuroDIG session again. I had the privilege and honor to moderate a session last year. So I can’t say this is my first opportunity of virtual environment, but it really is great to be here. And I think you know, this year we’re sort of more hybrid than we were before because of the studio set up. And it is, as I said, great to be here and looking forward next year to a real, physical meeting.
Without further ado, let’s get on and introduce the session. I’d like to thank the organizers of this session for putting this together. I’m determined to have a good, interactive and good controversial, interactive discussion. I say “controversial.” Although it might not be, although competition can be controversial. We’ll see how it goes. It is great to see people entering the room.
I think we will have a competition for the best background. Christoph is trying to show off already by having a background of the Atomium of Brussels on a sunny day. Brussels don’t have sunny days, so we know that is a fake picture.
Vittorio is in his art gallery. That is pretty good with his paintings. Yeah. Other people are here and there. Let me get on. Sorry
So this session, in case you are in the – just to make sure you are in the right session. We’re going to be talking about competition. Competition on platforms, competition in the current ICT in telecoms marketplace, particularly in Europe, but also outside of Europe.
My name is Nigel Hickson, not that that is relevant. I work at UK Government, Department for Digital, Culture, Media, and Sport (DCMS) working on Digital Standards and Internet Governance. I have been around this circuit probably too long. That’s what many people say doing Internet stuff. But anyway, it is great honor to do this. Our participants today, you have details on them in the excellent EuroDIG literature of course. Alève Mine, founder of the Zurich AR/VR Meetup and organizer of the One Goal Initiative for Governance. She’ll tell us more about that later. Vittorio Bertola, no stranger to many of us help Head of Policy & Innovation, Open-Xchange great contributor to many different organizations and discussions.
Christoph Riedmann Advisor for Digital Policy at EUROCHAMBRES, the European Chambers of Commerce and Industry. And Daniel Popovski, Australian Chamber of Commerce and Industry, Senior Advisor Economics and Industry Policy I haven’t seen his name yet, but I do hope he’s with us. Otherwise, we’ll be having to make up things about Australia, which could be difficult.
So that is our panel. I mean we’ll get straight into it in a second. What we’re going to do, we’re going to split this session into sort of three – that is the idea anyway. It might not work out quite like that. First I will ask each panelist to give us a bit of perspective on their view of what’s taking place in reality. Then we’ll have a brief discussion between the panelists and then open it up to questions. So I do encourage you all, please, to put questions in the chat. And we’ll pick them up. And of course, you can also make verbal interventions, should you wish. And there is not that many of us at the moment. 19? It’s growing.
So I really do hope we can have a good interactive session. Just before we conclude, we’ll have the excellent summaries from our friends at the Geneva Internet Platform.
Okay. So I think without further ado, our first panel member, so to speak to say a few words is Alève Mine. Good afternoon Aleve.
>> Alève Mine: Hi, how are you.
>> MODERATOR: I’m absolutely wonderful. And you’re always wonderful. I’m not sure where you are. You might want to tell us.
>> Alève Mine: I’m in the hospital, that is why I have to wear this. I’m sorry.
>> MODERATOR: Right, I remember you mentioning. No, that is great. If you could start off for us this afternoon and give your own perspective on competition, really from an academic perspective? Thank you very much.
>> Alève Mine: Well, there are two problems. The problem itself and how we try to solve it. For a better understanding it helps to know about the so-called margin problem. You see, the better we perform at the wrong goal, the more risks we build, options to get out of the risks we lose, and damage we take from start. Imagine you are dropped to the middle of the sea and try to swim towards the nearest island. You give it all you’ve got and at a point where you are completely exhausted you look at the horizon and realize the island was in the opposite direction. You had mixed up your references. Now you run a greater risk. You certainly don’t have the option to make another detour. The strain that you just went through was excessive, so your body suffered damage. The stress that you are going through was created stroke after stroke and the effort will have to be doubled just to get back where you started.
An important aspect of the risk accruals relating to the margin problem is these risks are not stoppable by erecting barriers. There is a number of mechanisms that make norms applied outside of a circle cycle back into the circle with a more stringent character. So these norms evolve into harsher forms in all circles as activities are performed or time passes. And the same time as risks rise and gradually get realized. Analysis can help discern which damage and which casualties are the product of the margin problem without such an analysis, we can’t identify the causes of damage and casualties accurately. With that, as competition speeds up and intensifies the activity that brings an advantage with regard to the object of competition, we want to choose carefully what we are competing about, not only because we want to avoid the situation where two small a complementary set of players gain the ability to shape the market, but to prevent the permanent loss of potential for all groups, including those of us who exert power and are descendants at all points in time, not just some hypothetical point in the future.
Does this answer sort of your – the perspective?
>> MODERATOR: Yes. Let’s follow that up a bit. Because that example you gave about swimming, I think it was, you know, quite vivid. That you can be, you know, if you are dumped in the sea and swim in the wrong direction, you certainly lose a lot of advantages and lose a lot of energy. But how do we know if – in terms of competition, if we are swimming in the right direction? How do we know whether things are going right or things are going wrong?
>> Alève Mine: Imagine – I will give you an image now. A tree that decides to grow as tall as possible. Because that is what you do. But the tree is growing just inside the small the entrance of a tree in dry soil. As it grows upwards it dies long before it would have otherwise. Because of lack of thinking, the goal will not have matched the landscape of its function and environment. It takes continuous work to identify and do a series of actions that will add up to the right goal for ourself, whichever our environment may be. That is the goal of the One Goal Initiative. The One Goal Initiative is the implementation of the best attainable solution to the margin problem, that means it is an affect line human activity with the best-suited goal. Thereby preventing avoidable risk accruals and ongoing risk realizations. The thing to remember is that competition is good only when it is about who contributes the most towards solving the margin problem. Here’s one type of impact of risk accrual. Where big companies exist, like today, if the data obtained by the front-runner far exceeds the other competitors, and that front-runner is able to develop a certain AI, the company may obtain a highly effective predictive will capability making insurances in the area obsolete which takes substantive work elsewhere to replace the insurance lost. This turn of events is not the result of smooth accrual of risk only, but past a threshold, the dynamics change radically, like water is fluid as it cools down until suddenly, it is solid.
Let me leave you with one question.
>> MODERATOR: Excuse –
>> Alève Mine: Can I? I want to leave you with this question. What if we said that when a monopoly arises we’ll have a process to transfer all of its assets into another company when needed? This is an option we don’t want to lose so probably should think about what could prevent that from happening.
>> MODERATOR: Thank you so much, Aleve, for that contribution. I imagine that that question could be – yeah, could prove quite interesting, the answers to that. Due process and all the rest of it. But thanks so much for that. Without further ado, let me go to Vittorio. You are on the line, sir, are you? Yeah? I’m not good at juggling multiple screens. I think you are all there. Can you tell us a bit about, in your experience how competitive you know the market is today? And where you see you know the particular issues, you know, particularly from a European perspective and then we’ll go to the solutions.
>> Vittorio Bertola: Our company is known as an open-source software provider. Email, ENS. These are fields that are all technology. These are services that started to appear in the 80s and 90s already. And I would say the situation is okay. So there are competitive issues. Maybe we will get into that later. But in the end, there is still quite a good amount of competition. Maybe it depends on the services we talk about. Perhaps the office market, everybody knows there is one big American company dominating the office market.
Email is getting more consolidated. There are still thousands of email providers around the world. It is relatively easy if you want to start a company for email services. Also we now have two very big players from the U.S. like Gmail and HotMail that dominate the market. Gmail we don’t have accurate data. It is 1.5 billion accounts. It is huge. The NS is consolidated as well. You get DNS from your provider, maybe as part of the Internet access service. Some time ago global DNS started to appear as commodity to help people with whatever locker DNS is or. Now the trend is moving so there are active pushes to try to consolidate the DNS market, so most of it starts with the global players as well.
I think that there is an interesting difference if you compare this older service with the newer service. The services that were invented in the last 20 years let’s say. The clearest example is instant messaging, chat, if you think at it, it is not so different with emailing. In fact, in the current form, it is like we know on smartphones. It is extremely consolidated. One dominant player, you have to have an account on WhatsApp, if you want to give names if you want to communicate. And the competitor, there is no way to communicate one with the other. There is a total lack of interoperability between the different messaging apps. You need to install also telegram, and signal and Skype or whatever. And have an account on each of them to communicate with everyone. The situation is really different. But in general, we don’t have enough interoperability. From a European standpoint it is nice to see with the digital sector, it is nice to see the push of interoperability. The draft is insufficient to address this. It is only a small subset of services. It will not bring interoperability to instance messaging or other services. This is something that needs to be addressed.
>> MODERATOR: Vittorio, let’s delve into that a bit. What you are saying is that the approach to – in – you are talking about the Digital Markets Act and other approaches. You are saying it is not broad or comprehensive enough to cover some of the monopolies that are emerging?
>> Vittorio Bertola: This is a discussion that is going on. It is happening in some of the Workshops at EuroDIG, but it is going on in Brussels and everywhere. We need to install the open standards and interoperability, is where it was built on. You take web and email it was conceived in a technology to allow everyone to develop a web browser or – not website but web service software. Open stand ups that everyone use and everyone accepts the products made also by competitors.
This is not the case in the modern sectors like instant messaging or social media. Unless you force the dominant companies, they have no incentive to open up and allow interoperability. There is the other sectors like email, DNS, these sectors should be more the focus of regulation.
>> MODERATOR: This is very interesting. I hope others will be able to come in later on this point. Because, you know, you are effectively outlining a potential you know problem in terms of scope and other issues. Vittorio, thank you so much for this contribution. I’ll certainly come back to you again. But let’s go to – let’s go to Christoph, if we can. And thank you, by the way. I think we found our fourth panelist. He was lost in the – play, you know, the games with the little characters in – I got lost there as well. It is easy to get lost in life.
Christoph. I will stop waffling. Thank you, by the way, Christoph that has done a lot of the work on putting together this panel. Christoph, we all know the competition is beneficial. But often as we just heard, you know, it doesn’t work sufficiently in online markets, perhaps due to gatekeepers. What does the European Commission plan to do to reestablish competition in online markets? And what do you as the chamber think of this?
>> Christoph Riedmann: Thank you. Actually Vittorio mentioned it, as the Digital Markets Act. It is not the first attempt, I will comment later, if you allow me to when others are done already. The Digital Markets Act, the DMA as the abbreviation is, it is a proposal from December last year, it is in the legislative machinery of the EU. It takes its time. It focuses, specifically on gatekeepers. Defines gatekeepers as something that has 45 million end users or 10,000 business clients or a turnover of more than 6.5 billion per year. Or market capitalization of 65 billion euros. So by those sheer numbers, you see it addresses the big guys. At the moment, I think they would only be seven or six companies in the world that fall under that definition. You can use your fingers to count them.
But the core of the proposal is that it would set up a list of do’s and don’ts for the companies, example to make the enforcement much easier.
For example, it would forbid that you treat and drink your own offer more favorable than that of a business client that uses your platform. Or it would forbid to sign in end users automatically to other services that you provide. For example, if you sign into an email account, that you are at the same time signed into an online platform or a navigation system.
At the same time, that is more what Vittorio mentioned, it should allow interoperability. It should allow for example, business customers that they offer their services or their products on other platforms. So you cannot forbid that. And also, for example, for companies to do advertisement through your platform, it should provide you, if you want to know that, with performance measuring tools when they’re in place. So for us, because that was the second part of your question, Nigel. For us as lobbying organization, association, for companies, most of them SMEs, for us, two things were important.
First thing, it should be simple rules. Second, it should be efficient. So the simple rules, we want them to be clear and easily applicable basically that the small company can understand what are their rights, without consulting the lawyer first.
Second one is – I underlined at the beginning that the rules are exempt. Because now, the big problem is the competitional authorities usually came too late to establish competition. By the time they were active, by the time you had the decision by the European code of justice, the monopoly was there already and couldn’t be made reversed. So speed and fast, efficient execution. That is the second big thing for us. Big topic that we want in the regulation.
>> MODERATOR: Christoph, thanks so much. It is good of you to mention ex-ante. I remember as a young civil servant coming to Brussels and people talking about ex-ante and ex-post. I thought it was a foreign language. In terms of competition approaches. The European Commission have, you know, been involved in looking at the competition of telecoms and ICT and Internet markets for a long time. I mean, in your view, I mean, why do we need something like the Digital Markets Act now? I mean, we have had telecom frameworks, competition law. Has there been a gap? Has there been something missing?
>> Christoph Riedmann: I think the main difference what was realized only over time is that first, we have things developing at an unprecedented speed. You can basically create a monopoly digital markets within a few days. If you come out with a new product.
Let’s say in the physical world, for example, if you wanted to create the monopoly in cars, even if you had the best car around, it took you years to build the production lines. Today that goes very fast. Second thing is that the online markets say they have this tendency towards monopolization, Vittorio mentioned WhatsApp. It is a good example of the messenger service. The first one that is good on the market, people use it, inscribe and once you have a critical mass, everybody who wants to do something similar automatically goes to that provider because the others are too small.
Internet markets have the tendency to monopolize. And the third point is that of course on the Internet, it is even more difficult, once there is a monopoly established to break it up again.
Maybe so competition authorities breaking up big companies. Most of the companies originate in one petrol company, in another company that existed from the 1920s, it was split up.
How can you split up WhatsApp? That is much more difficult.
>> MODERATOR: I think that is a really excellent point. Perhaps we will come back to this later. We’re into a slightly different scenario here. Where, as you say, if you are talking about cars or widgets – not that there is anything wrong with cars or widgets – that is a somewhat different environment. I hope everyone is busily sort of trying to think of questions and discussion points. So please, do put something in the chat. And you know, we can get you to talk in a second.
But look, it gives me great pleasure to introduce our fourth participant who was lost in the Internet maze for a while. I think, Daniel, you are now with us, I think. Yes, yes. Daniel, we’re very grateful for you to be with us this afternoon. I don’t think it is your afternoon at all. You can tell us what time it is with you in a second.
But I have introduced you, but I would very much like you to tell us a bit about your experience in Australia, in promoting competition in the Internet space. And you can tell us, you know, what has been successful there. And some of the new proposals you are looking at with regard to platform regulation. So, the floor is yours, as they say.
>> Daniel Popovski: [Muted]
Thank you, Nigel. Apologies for being late in joining the session. I did in fact get lost in the maze of the other link. Glad to be with you all.
I guess I will take that question back a step for a minute. And just kind of contextualizes the thinking behind the Australian perspective. First, obviously there are some fundamental differences between the virtual environment and online marketplace when comparing it with physical or traditional markets that make Internet competition policy different than competition policy in the traditional sense. Competition rules generally do not work in abstract. They apply in markets that have precise boundaries. And you have to be clear about who is competing with whom. For what product or service and within which geographical area.
The Internet itself has made those traditional competition rules difficult to apply for a number of reasons. One of the reasons is that the Internet replicates an existing market, creating dual markets. And what that does is consumers tend to have greater transparency on price, product, service type. Consumers able to compare and drive down market prices. Markets compete on cost. They have the potential of impacting industries. That may be cause for a variety of reasons. One being high production cost, then those distant international markets. And for Australia, one of the major cost differentials related to how goods and services taxes applied.
In Australia, the goods and services are taxed at 10% and paid at the point of sale. Up until a few years ago, operators operating in international markets were exempt from this tax. That had an impact on the smaller industries that were quickly unable to compete with the larger online retailers, particularly with the onset of your larger digital platforms like Amazon, who were then able to, you know, deliver products from far and distant places to local consumers.
So the way that the Australian Government intervened into that particular issue was to broaden the GST or goods and services tax to online retail purchases as well.
And there are other competitive tensions that rest from the digital landscape. One of them is large firms like Google and Facebook have an important advantage over other firms in terms of the digital marketplace, in terms of the ability to collect data and the goods and services they offer.
One of the pieces of legislative instruments that arose from this particular aspect of that monopoly in terms of data was the digital platforms inquiry, led by the Australian consumer and competition Commission. They found anecdotally and through research through ACCC they were able to find practices that kind of discriminated against smaller firms that were trying to move into the market. And this caused some unfavorable conditions for newcomers into the digital platform space. And there were particular anxieties around some of the larger conglomerate online marketplaces that were starting to vertically integrate a lot of services and that were also starting to branch out and reach out into different areas. So the digital platforms inquiry, which was led only a year before the COVID pandemic onset, that has led to a number of interesting outcomes. One of them is the media bargaining code. So the focus here is that any news media outlet that has a news snippet advertised through Google, they need to reach an agreement and a paid partnership to allow that news service to be advertised on Google. This is a first of its type.
There were a lot of political tensions that came out of that. Google and Facebook temporarily froze news services in Australia. And there was also a threat from Google to actually remove its operations entirely from Australia at that point.
It was a very messy process in terms of the ability of legislation to kind of come in and resolve this issue. But as you can see, in Australia, there is a lot of different areas that competition role is currently looked into across the digital landscape.
>> MODERATOR: Thank you so much, Daniel. I mean, that is really interesting. And many of us, I’m sure, watch with great interest the debate that went on in Australia with Facebook and that and the solutions that were reached. I want to sort of just pose a question to the panel. Please, anyone come back on this. One of the aspects many of you mentioned of course that things are so fast-moving, we don’t have factories that take months and months to gear up to make goods or whatever. Things can come on to the marketplace in a remarkably small-time, which is fantastic. It is legislation the way forward, or codes of practice, understandings a better way forward? Or is something like the Digital Markets Act with the ex-ante provisions flexible enough to cope with this changing dynamic?
I suppose the second part of that is ... is, you know, do we have to you know – essentially, do we have to hug the platforms? Or do we have to push the platforms away? I mean, is it better to, you know, work with the grain or against the grain, so to speak. That might be a bit simplistic. Aleve, you go first on this. Just very short answer is great. Thanks. Ha-ha-ha.
>> Alève Mine: Yeah, sorry about that. I’m just very thorough sometimes. I think as long as we don’t agree on the overall goal, we will only waste each other’s time with rhetoric trying to – because we all have underlying needs, drives, affiliations. And we belong to some groups and we belong to some trains of thought. And we want to lay these open, so what we need in order to get to the right legislation and right action, at first, what we need is disclosure of all that. Yeah. Without that, we will not get anywhere. Anywhere good, let’s say.
>> MODERATOR: Right. Yeah. I take that entirely. Vittorio.
>> Vittorio Bertola: Yes, I will try to be short. It is a good question in many aspects. First of all, I think we need a multilayer approach. So there is a role for everything. There is a role for regulation, which is to establish the principles. I think it is – I like the GDPR and the DMA, you can establish the higher levels of the market and need to be turned into practice depending on the specific market and sometimes depending on the specific technology. This is the principles and governance of the lower layers. Maybe more multistakeholder approach is a more technical approach can work out the details. There is an open issue, which is, merging, for example, at the ITF. I mean, we have seen because if you Delegate the establishment or standards to the standardization organizations of the Internet, which are open more than the previous Governmental ones. Still today, in a good part, dominated by data and platforms, which is normal because they have been the ones leading the technical development. Then you have to have a way to ensure that the principles that you establish in regulation don’t get watered down or made effective at the technical level. That is the risk we see, sometimes the standardization organizations going into direction to promote the more centralization. Or promote the platforms.
For example, another interesting thing that I would like to mention, and then I stop, but 20 years ago, there was a lot of talking and also enshrining of the network target principle. It is still in use today. That a situation where you had huge Telco carries that were confronted by a small Internet team that was recently born and fledging. It was too small to have the power.
At this point in time, the situation is the opposite. The big Telcos are small if you compare them to over the top platforms. So the power struggle is opposite. The power is in the hands over the top and not in the hands of the network operators. So we need to establish regulation platform entirely. Which is what the DMA is trying to do.
We need principles and regulations, this could evolve in 10 or 20 years and you need something faster in terms of evolution at the lower level. But you have the two coins between them.
>> MODERATOR: Thank you, Vittorio. I think that is really key. If anyone has views on that, put them in the chat. We can get you speaking. Many of us lived through the debates on net neutrality. And now, as you say, it is rather turned around to a large extent.
>> Christoph Riedmann: You are talking to a lawyer now. The lawyer will tell you that the rules are not there for if you get along way. But the rules are only good rules if they prove that in the case that one does not comply with them you can take them out, it helps you get to the right, you can make the other do what is written in the law. That is the idea of the law, regulation. That is the commitment of standards usually based on laws. Of course you need the rules. They’re nothing else but rules. And I mean, I don’t know if you have the saying in English as well.
In German, we say you should hug your friends and your enemies even more. Basically like a bear hug until they don’t have air anymore. I wouldn’t go towards that picture. I mean, it is really also with platforms it is you need to create rules and then things are fine. Platforms are not per se a bad thing. I mean, you can’t say they’re bad things and therefore they were successful. No, on the contrary, for example, when you look at hotel booking platforms or flight platforms. I mean, it was them who made for us simple customer, who gave us the possibility at the beginning to compare different offers. I mean, if you think back how you book the flight 20 years ago, you have to go to travel agency and they book your flight to Copenhagen, cost 630 euros. How is it one day later? And what if I go to a small airfield 100 kilometers from the big airport and fly from there. Impossible. Today, via the platforms, it is possible to compare one hundred different offers in very short time. Sort them by time or by price. So platforms have enabled competition in many areas. But if they use this market power to then restrict competition, it is natural that legislator has to intervene.
>> MODERATOR: Yeah, no, thank you, Christoph. I think what you say is very sensible. We shouldn’t forget the innovative space we’re now in, which is not very good English at all. We shouldn’t forget where we have come. I would like your – you know, the expression that you use about friends and enemies. I’m sure it doesn’t apply to futbol at all, you know, we won’t talk about futbol matches or anything like that today. Because, you know, anyway.
Going on, Daniel. You needn’t worry about the futbol jokes so to speak. You’re well out of it, as they say.
You have a real-time relationship between the Government – I know you are not in the Government, but Government, Facebook, Google. And you know, you did reach ways forward. So it is possible to hug these companies, so to speak. You’re on mute, Daniel.
>> Daniel Popovski: Sorry. Thank you. Well, absolutely. I think there is – I agree with the other panelists. I think there is a role for both standards, codes, so forth in terms of how economies can move forward. I think that is definitely a role – there is a role to play there. But in the experience with Governments managing media bargaining code, these are possible. There was significant push back from Google at that time.
However, the ultimate goal of allowing competition in the market and allowing Google to negotiate terms of paying news outlets for the stake on the online environment, I think you’re able to get there. The thing is, I think it needs to have a very targeted requirement for it to reach into a legislative instrument. So there needs to be a general – genuine case of a competitive impediment. There needs to be a genuine case of foul play by the digital app. Or the marketplace.
In that case, that was contested with the mandatory bargaining code. There were genuine, strong cases for it not to proceed. That demonstrates that it is a David and Goliath perspective to get the outcomes you are looking for. This wasn’t an easy outcome for the Australian Government. It was definitely an uphill battle to get to where it was.
But in saying that there is a role for legislation. I think that regulation itself can be a little bit slow and a bit after the fact, whereas you have standards that could, ethics frameworks that could alleviate the concerns from the outset of the code as law and so forth. I think that is potentially the way forward.
>> MODERATOR: Right. I mean, thanks very much for that. No, I think you really did so, you know, a way forward in these areas. I mean, one issue I would like to come back to – please, participants, feel free to put something in the chat or put your hand up that you want to speak, we have about 10 minutes left before we have a summary. I want to go back, though, briefly while we’re waiting for anything. One of Vittorio’s points, in the beginning, you were looking at the European Commission approach. You were thinking it might work for these type of platforms or for this type of service, but does it work for instant messaging? Does it work for some of the domain system situations that we have got?
You know, in the registry space or registrar space. You know, there is some quite dominant bodies now. I mean, how do we – how do you evolve this? Because new services will come along all the time, so to speak. So it is probably quite difficult to define some of the markets. Your thoughts and others would be useful.
>> Vittorio Bertola: If I may start since I’m the one that raised the point. If you have a look at the current draft of the markets of the Digital Services Act. They have room for the specification and bringing things into scope.
Of course, there is discussion around the point, proposals to change this, make it easier to have that sometimes. There is also valid point by the platforms to have the business certainty. If it is easy to change the rules and bring new stuff into scope, it is hard to plan. Because all of a sudden they might discover they have obligations they cannot meet. This is understandable.
At the same time, I think this is crucial to be able to regulate when it is necessary and do it quickly. Because I understand and I am all in favor of the business freedom of people – the freedom of entrepreneurship. At the same time, there are significant societal impacts of the platforms which are now pervading everything from society, to economy, to information, to politics. So there is a strong public interest.
I would say that the biggest issue is still how to have a discussion around these things and involve all the stakeholders. I mean, the discussion in Brussels is do we change it. It is still relatively hard to interact with markets, yeah. Yeah.
Anyone else on this point?
If not, we’ve got a question from Ruth in the chat. Ruth, do you want to speak? Or shall I read out your question?
Ha-ha. She said please read. Ruth, it is good to have you hear. Ruth said she was interested in the talk of interoperability between the tools earlier. She’s curious about how and whether to encourage interoperability between platforms and providers, big and small, new and old? Would that be effective? In other words, how can we encourage interoperability between platforms? Christoph, you are unmuted.
>> Christoph Riedmann: Yeah, I mean, when you look at the DMA, it basically has two articles, 5 and 6. And article 5 they put in all those that don’t need further explanation. And in article 6, they put those where they say they will be specified by the Commission more. So that means technical stuff will get in approximate, standards, so on.
In that one they have one on portability. So it seems that also from the point of view of legislator, the Commission was hesitant to tell company that they have to be interoperable with the competitors.
Now, in certain ways, you can understand that. I mean, for example, nobody would expect that you say to BMW they have to produce their cars so you can put a motor of Alpha Romeo in or part of Japanese car. In that aspect, it is totally logical to us. Same time in telecoms, the opposite is normal.
You cannot say as a telephone provider that you can’t reach other telephones than those from our company with our telephone. So their interoperability is something completely logical and been there from the beginning. In any case, what I wanted to say, I see a certain hesitation there from the perspective of the legislator, contrary to portability. So if you change your Cloud service, for example, that should be facilitated.
Also one point to put for discussion. Altogether there are about 20 do’s and don’ts. So interoperability is not one of those 20, but I see it would make a good lobbyist in finding additional amendment and things to include.
>> MODERATOR: Thank you very much Christoph. Aleve?
>> Alève Mine: I think interoperability facilitates some existing processes. Now, if those processes are aligned with the optimal goal for us, then it is positive. But as often in infrastructure or processes or tools, tools can be used for different things. You know? So we want to choose exactly, you know, what, where we’re walking towards. That’s the main thing. At that point, then interoperability is a useful thing. It is like standards, you know, they’re a useful thing when we go in the right direction.
>> MODERATOR: Yeah. Thank you. Thank you for that. I mean, this interoperability argument is something that many of us have been through. And you know, let me just not say anything particularly controversial, but you know, I remember the earlier European discussions on the framework Directors, 1996, that sort of thing. We were told them by the companies that introducing interoperability or local loop on bundling would be impossible. Just wouldn’t work in that. And of course, the European Commission and the Council and the Parliament did introduce it. It led to a fairly competitive landscape. Perhaps people would argue with me on that.
So sometimes, I think policymakers have to be bold. You know, we had the roaming regulation in Europe. The time, you know, there were voices saying, you know, this wouldn’t work. And you know, again, it did work. And so, yeah. So you know, sometimes I suppose you have to push the boat out. It will be interesting to see what takes place as we go along this legislative road.
But anyone else want to say anything before we end? We have a couple of minutes. I’ll allow everyone to sort of say 30 or 45 seconds. So Daniel, you go first. I think you should go first. Ha-ha-ha.
>> Daniel Popovski: Look on the interoperability issue, to touch on that quickly. I think there are benefits of switching costs, from reducing switching costs and allowing competitive will ecosystem. And have competitive outcomes. I think there are major barriers, but with the code, I think there is a way forward. It does require resilience from policymakers and politicians to see it through.
In saying that, I think there is a mutual and dual role for standards and ethics frameworks to guide the direction of new technologies.
>> MODERATOR: Thank you so much. Thank you.
>> Vittorio Bertola: I think I agree in general we need to introduce interoperability for a way to open up the markets, especially those platform services with strong network effect. To have a big user base and lock it in. That is such a way to address some of the questions. You don’t need to focus on the small companies or anything because they have an interest. You need to introduce it to the gatekeepers to make sure there is no objective not to interoperate. In terms of security, privacy, you can address that. You need to be bold. It is time to do that.
>> MODERATOR: Yeah. We come back to that word “gatekeepers.” Aleve?
>> Alève Mine: The way I presented things kind of conceptual, abstract, et cetera. But that is really just one way of presenting the concrete reality. And when I talk about the right goal and wrong goal, it has actual concrete impact every day on everybody. So yes, there are two problems, again, that if you get back to that. The problem itself, which we don’t – we are not able to completely understand because we don’t have all knowledge. If you don’t have all knowledge, you see a little part of the problem. So you identify the wrong problem or the wrong goal for yourself.
So that is how you – how you swim in the wrong direction. So the idea is to compensate for that. I’m sorry.
>> MODERATOR: Thank you. No, no, thank you. We always want to swim in the right direction.
>> Alève Mine: Yeah.
>> MODERATOR: Final word, Christoph. If you can finish us, and then we have to go back to the Rapporteur.
>> Christoph Riedmann: Thank you, Nigel. I want to highlight three things. First is when we look how legislation evolved, the first big piece of fairness for business users, regulation where the proposal is from 2018. At that time, the idea was still to put every kind of online service online, mediate the service, make rules for all of them. And then we said that doesn’t work. They are very small platforms. They’re very big platforms, you need different rules. It took a while until that was implemented there. Now with the gatekeeper, we see the Commission has understood that concept completely and makes now rules for the big ones. But again, the match is not about good or bad or small versus big or old versus new. It is really about fairness and we are at the beginning of the process to make Internet fair.
>> MODERATOR: And we all want to be fair.
Look, thank you so much. I have to thank you so much for all the contributions. We’ll go back to Studio Belgrade who will give us a summary. Sorry for being a couple minutes late, Boris.
>> Boris: My name is Boris O. I’m with Geneva Internet Platform, and we will provide summaries from all the Workshops. I will pass these messages and it will be passed on to Geneva Internet Platform shortly. The messages will be available for additional comments and EuroDIG will provide more detail on that.
So the first message is, there is lack of interoperability between various online services and platforms, from the European perspective, there are ongoing initiatives pushing for more interoperability, but the scope of coverage of such rules might need to extend to include more services and platforms. There is room for ethics rules and standards to guide the future policy. Unless there are strong objections to this message and the other three following, we’ll consider that there is rough consensus on the messages.
>> MODERATOR: Carry on then.
>> Boris: The second message – the next slide, please. The new European rules on competition in the digital landscape should aim to be simple, and efficient. Simple, clear rules will help even smaller companies to understand these and follow the rules without profound legal expertise. Efficient rules are needed to tackle monopolies ex-ante before it is late to break up the monopolies which usually so establish themselves very fast in the digital environment.
Third message, next slide, please. A multilayered and multistakeholder approach is needed to tackle competition issues in the digital. Regulation is expected to establish the general principles, whereas the governance of the lower layers should aim to ensure that regulation is not then watered down on the more technical implementing levels.
The fourth message – next slide, please. Competition is good only when it is about who contributes to the solution of the margin problem. More analyses are needed to identify the scope of the damage caused by the competition.
>> MODERATOR: Well, thank you. I mean these are very broad messages. Thank you to all the contributors. And I guess we have to go back now to the final keynotes. Thank you very much indeed. Thank you.
>> STUDIO: And this is a final good-bye from Belgrade, from our hub. We would like to thank everyone and remind everyone to stay tuned in for the last closing session. I hope you also enjoyed the last session on the competition as much as I did. And everyone else in our hub here in Serbia. So see you in a little while. Please, you can stay on and we’ll start with the closing ceremony very soon.