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The Internet of Things is advancing as a new technological paradigm with enormous economic and societal implications. Network connectivity provides the basis. With this in mind, past and current conflicts surrounding the licensing and enforcement of standard essential patents (SEPs) in the information and communications technology (ICT) sector cast a shadow over IoT development. Focusing on the European approach based on competition law, this article explores the extent to which the existing legal framework, which has been mainly developed against the backdrop of problems in the mobile industry, will be capable of responding adequately to the challenges raised by the IoT.

On the European level, promoting the free flow of data and access to data has moved to the forefront of the policy goals concerning the digital economy. A particular aspect of this economy is the advent of connected devices that are increasingly deployed and used in the context of the Internet of Things (IoT). As regards these devices, the Commission has identified the particular problem that the manufacturers may try to remain in control of the data and refuse data access to third parties, thereby impeding the development of innovative business models in secondary data-related markets. To address this issue, this paper discusses potential legislation on data access rights of the users of connected devices. The paper conceives refusals of the device manufacturers to grant access to data vis-a-vis users as a form of unfair trading practice and therefore recommends embedding data access rights of users in the context of the European law against unfair competition. Such access rights would be complementary to other access regimes, including sector-specific data access rights of competitors in secondary markets as well as access rights available under contract and competition law. Against the backdrop of ongoing debates to reform contract and competition law for the purpose of enhancing data access, the paper seeks to draw attention to a so far not explored unfair competition law approach.

The present Q&A paper aims at providing an overview of artificial intelligence with a special focus on machine learning as a currently predominant subfield thereof. Machine learning-based applications have been discussed intensely in legal scholarship, including in the field of intellectual property law, while many technical aspects remain ambiguous and often cause confusion. This text was drafted by the Research Group on the Regulation of the Digital Economy of the Max Planck Institute for Innovation and Competition in the pursuit of understanding the fundamental characteristics of artificial intelligence, and machine learning in particular, that could potentially have an impact on intellectual property law. As a background paper, it provides the technological basis for the Group’s ongoing research relating thereto. The current version summarises insights gained from background literature research, interviews with practitioners and a workshop conducted in June 2019 in which experts in the field of artificial intelligence participated.

The Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled is an important and meaningful WIPO treaty. It intends to mitigate the book famine for blind and visually impaired persons worldwide. This position paper of the Max Planck Institute for Innovation and Competition recommends that the EU Commission present in the foreseeable future a specific proposal for a Directive therewith mapping more concretely the specifications of Article 5(3)(b) of Directive 2001/29/EC. The aim of this position paper is to outline the basic points of such a Directive, taking into account the requirements of the WIPO Marrakesh Treaty.

The Max Planck Institute welcomes the initiative of the European Commission for a binding legal instrument on collective management of copyright and related rights in the EU. Numerous provisions are to be appreciated. Yet the Commission seems to fail to take account of the full legal framework and factual circumstances that have structured the current system of collective rights management. Disposing of natural monopolies in a two-sided market, collecting societies should not refuse to grant access to their services to rightholders and users. Hence, it is strongly recommended that the European legislature follows the experience of numerous Members States and proposes an obligation to contract with rightholders as well as with users. The critique on the Commission’s approach to cross-border licences for online rights on musical works as set forth in the Recommendation of 2005 has unfortunately not been duly considered and the Commission’s assessment of the practical effects of the Recommendation is mistaken. Differences of substantive copyright law among Member States still constitute an obstacle to the establishment of an internal market for works. This is why the Institute deems the Commission’s sectorial approach to the regulation of cross-border licensing to be problematic. Also such regulation would require further harmonisation of substantive copyright law. Moreover, the Proposal fails to take account of statutory remuneration rights and cases of mandatory collective management. Both pursue specific protection of original rightholders. In this regard the Proposal’s refusal to distinguish between different categories of rightholders raises concerns. Since collecting societies manage copyrights and related rights arising from national law, and considering the benefits of an authorisation system, which can be found in several Member States, the Institute advises the European legislature to clearly state that the intellectual property exception of Art. 17(11) of the Service Directive applies to collecting societies. The Proposal endangers the balance both between different categories of rightholders and between rightholders and users that the established system of collective management of copyright in Europe traditionally seeks to achieve. It thereby compromises the laudable goal to foster the establishment of an internal market for online uses of works across Europe.

Beyond regulating markets, competition law also has a political dimension. This is especially the case in media markets, where competition policy may produce particular trade-offs for the development of democracy. Yet it is a different question whether competition law enforcement should take democracy into account as a goal and, even more so, whether this goal should influence the analytical framework for applying competition law. By putting a focus on emerging and developing economies, this article answers this question in the affirmative. It thereby builds on a recent study conducted for the World Intellectual Property Organization (WIPO) on the application of competition laws around the world to copyright-related markets. Whereas, in the past, the interface of competition law and democracy was mostly discussed with regard to media mergers, an analysis of some unilateral conduct cases shows that the ‘democratic goal’ can argue either for or against intervention. Yet promoting the goal of democracy will not conflict with an economics-based analysis of competition law if, following an evolutionary concept of competition, enforcers promote diversity of content and ideas in copyright-related media markets. In addition, the article highlights the need of independent agencies to guarantee credibility of competition law enforcement in media markets.

The Max Planck Institute welcomes the initiative of the European Commission for a binding legal instrument on collective management of copyright and related rights in the EU. Numerous provisions are to be appreciated (paras 15 and 31). Yet the Commission seems to fail to take account of the full legal framework and factual circumstances that have structured the current system of collective rights management. Disposing of natural monopolies in a two-sided market (paras 5-9), collecting societies (about this terminology, see footnote 2) should not refuse to grant access to their services to rightholders and users. Hence, it is strongly recommended that the European legislature follows the experience of numerous Members States and proposes an obligation to contract with rightholders (para 10) as well as with users (para 11). The critique on the Commission’s approach to cross-border licences for online rights on musical works as set forth in the Recommendation of 2005 (footnote 6) has unfortunately not been duly considered and the Commission’s assessment of the practical effects of the Recommendation is mistaken (paras 9-10, 12, 17, 46 et seq.). Differences of substantive copyright law among Member States still constitute an obstacle to the establishment of an internal market for works. This is why the Institute deems the Commission's sectorial approach to the regulation of cross-border licensing to be problematic. Also such regulation would require further harmonisation of substantive copyright law (paras 13, 20 and 25). Moreover, the Proposal fails to take account of statutory remuneration rights and cases of mandatory collective management (see paras 14, 18 and 36). Both pursue specific protection of original rightholders. In this regard the Proposal’s refusal to distinguish between different categories of rightholders raises concerns (paras 15-18, 28, 55). Since collecting societies manage copyrights and related rights arising from national law, and considering the benefits of an authorisation system (paras 57 and 69 et seq.), which can be found in several Member States, the Institute advises the European legislature to clearly state that the intellectual property exception of article 17(11) of the Service Directive applies to collecting societies (paras 19-24). The Proposal endangers the balance both between different categories of rightholders and between rightholders and users that the established system of collective management of copyright in Europe traditionally seeks to achieve (see paras 32-45, 64). It thereby compromises the laudable goal to foster the establishment of an internal market for online uses of works across Europe (paras 12, 26, 46-65).

For several years, research at the Max Planck Institute for Intellectual Property and Competition Law (MPI) − in collaboration with experts from all over the world − has examined the trend of bilateral and regional agreements that include provisions on the protection and enforcement of intellectual property (IP) rights. By building on this research, the following principles – express core concerns regarding the use of IP provisions as a bargaining chip in international trade negotiations, the increasing comprehensiveness of international IP rules and the lack of transparency and inclusiveness in the negotiating process; and – recommend international rules and procedures that can achieve a better, mutually advantageous and balanced regulation of international IP. These principles emanate from several consultations within the MPI and especially from a workshop that was held with external experts in October 2012 in Munich, Germany. They represent the views of those first signatories and are open to signature by scholars who share the objectives of the Principles.

Firms do not only compete by price. Another parameter of competition is innovation. This raises the question of how competition law should assess potential restraints of competition in innovation. Modern competition policy advocates an effects-based approach that analyzes cases in light of the economic effects on relevant markets. Firms also compete in existing markets when they try to improve their products sold in these markets or optimize processes for manufacturing those products. However, as it was first discussed in merger control law, an analysis limited to the effects on existing markets may fail to assess cases appropriately when firms are not yet competitors but dispose of innovation capacity for future markets. Whereas a merger among such firms will not harm existing price competition, it may well have a negative effect on the new firm's incentives to innovate. For addressing this phenomenon, the U.S. agencies in particular started to analyze cases also in the light of so-called “innovation markets” in the 1990s. Yet this new approach was also criticized. Indeed, the idea of an innovation market remained at best a metaphor, since there are no transactions between suppliers and customers of innovation before tradable technologies and products emerge from R&D efforts. Therefore, both the most recent U.S. Horizontal Merger Guidelines and the EU Guidelines on Horizontal Cooperation Agreements have now given up the idea of an “innovation market” concept in favor of a U.S. “innovation competition” and EU “competition in innovation” concept. This change confirms that competition in innovation takes place outside and before the emergence of markets. If this is so, modern competition law, which strongly focuses on market analysis, may face a major problem in addressing restraints of competition in innovation appropriately. The following article analyzes this problem against the background of EU competition law for the different fields of enforcement—mergers, agreements, and unilateral conduct—by also taking into account most recent cases. The article highlights that an analysis based on the effects on existing markets can only work as a rough proxy in such cases. Most importantly, in the field of unilateral conduct, the requirement of market dominance at the time of the abuse under Article 102 of the TFEU considerably limits the capability of enforcers to act against restraints of competition in innovation.

The major institutions of government in the European Community are the Council of Ministers, the Parliament, the Court of Justice, and the Commission. The initial treaties prescribed a legislative process in which the Commission proposed, the Council enacted, and the Court interpreted. The Council enjoyed the exclusive power of legislation, and most of its enactments required unanimity. In contrast, the Parliament had, at most, a right to be consulted about legislation. In effect, the institutions of European government originally provided a framework for cooperation among ministers of the sovereign states. From this beginning, the European Community has evolved gradudly towards a democratic government. Specifically, majority rule is replacing unanimity in the Council, and the role of Parliament is increasing towards full partnership in the legislative process. Legislation now must follow majoritarian, bicameral procedures on some issues, and the scope of these issues will presumably widen. The obvious consequence of these changes is a decrease in the power of the Council and an increase in the power of Parliament. We use game theory to prove the not-so-obvious fact that majoritarianism in the Council increases the power of the Commission and, in the long run, decreases the power of the Court, whereas bicameralism has the opposite effect. Our analysis suggests a revaluation of the implementation of democracy in Europe. To be more precise, there are four procedures for European legislation that differ according to the extent that the Council must involve Parliament in making law. The procedures, arranged in order of increasing involvement of Parliament, are called unilateral, consultation, cooperation, and co-decision. A change from consultation to cooperation on an issue, and a change from cooperation to co-decision, obviously

Between March and June 2010, the European Commission has conducted a consultation on the review of Council Regulation 1383/2003, concerning customs action against goods suspected of infringing IP rights (the so-called Border Measures Regulation; BMR). The Max Planck Institute for Intellectual Property, Competition and Tax Law, Munich, participatet in that consultation with a statement.In that statement, the Institute proposes several amendments to the definitions, scope and procedural provisions of the BMR. The proposals go into much detail, yet their main line can be generalized int wo ways: In terms of the scope of the BMR, firstly, the Intitute sees a need to distinguish between genuine acts of transit and other forms of passage. Genuine acts of transit should be excluded from the scope of the BMR. However, the transit definition or genuinity-requirement is not demed to be fulfilled wehere, in particular, there is a substantiated threat of either trade diversion onto any of the markets of the EU member states or of a misuse of the transit procedure for conduct of an illicit activity. In view of the special nature of such transits, a specific exclusion from the scope is also proposed for specific public health-related transits. In terms of procedural rights under the BMR, secondly, the Institute proposes several amendments with a view to achieving a better balancing of rights and enhanced TRIPS-conformity.

This paper focuses on an important subset of the knowledge economy: the area of scientific research. Wide dissemination and accessibility of scientific information in the online environment are at the core of today's knowledge economy. To a large degree, scientific information is embedded within scholarly works, such as journal articles, which are subject to copyright protection. Limitations most relevant to scientific research provided for in Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society (InfoSoc Directive) are important tools to ease access to relevant information for purposes of scientific research on the end-user level. They need to be preserved and, where possible, adequately extended. However, even if widely introduced in all Member States and made immune against technological protection measures, these limitations alone may not guarantee wide dissemination and accessibility. The more publications become available in electronic form only, the greater the risk that libraries and scientific end users will face a single-source situation, forcing them to pay unreasonable prices or accept unreasonable conditions for accessing (for the most part publicly financed) scholarly contents, or to desist from using the relevant contents at all. Contractual arrangements between rightholders and users - as addressed in the Green Paper - are likely to benefit rightholders more than users. Limitations allowed for in the InfoSoc Directive cannot cope with these problems since they only take effect at the user level, i.e. when the content has already been procured. Wide dissemination and accessibility may need to be addressed also on the level of the intermediaries, e.g. by securing the existence of multiple sources and fair competition among publishers and other intermediaries with respect to the individual piece of scholarly work, such as an individual journal article. In this paper, we suggest certain elements that should be considered in the course of a legislative reform on the EU level, following a two-tier approach: (1) At the end-user level, limitations most relevant to scientific research should be mandatory, immune towards contractual agreements and technological protection measures, and should be construed as providing a bottom line, which national legislation should not fall below. In return, original rightholders should receive adequate compensation. (2) At the level of intermediaries, it is strongly recommended to follow up closely the developments in the scientific publication market, in particular concerning the situation of (publicly funded) research institutions vis a vis publishing companies and database producers. If certain negative effects cannot be mitigated otherwise, additional legal measures may have to be considered, which may be based on copyright or competition law, or even combine elements of the two, as will be addressed in part 2 of this paper.

To the extent that the creation and exploitation of information technology, in particular of the Internet, represents not only a cause and a hallmark of economic globalisation, but also is dependent upon globalized ways and rules of trade, it is particularly revealing to study the impact of electronic commerce on the globalization of economic law. Focussing the examination more specifically on problems of consumer protection will also bring into consideration national public policy thus raising additional issues of policy conflicts, even though, in the context of the Internet, the concept of consumer may not be limited to the ultimate consumer. Assuming that the establishment of specific rules of consumer law is legitimate in itself, the paper seeks to identify the problems which consumer protection raises for globalized electronic commerce by comparing the approaches which the major players in the field, i.e. the USA and the EU, prefer. Therefore, the policy of the EU of relying on the traditional legal instruments of market regulation is contrasted with self-regulation of e-commerce by industry, which is the approach the US favor with respect to both the domestic market and international trade (see the Global Business Dialogue). These preferences are then explained by reference to the prevailing political and economic thought, and they are put in the perspective of the institutional framework existing on both the international level (UNCITRAL) and the national and regional levels respectively. In particular, it is demonstrated that the distribution of federal powers in the USA and the rules on the establishment of an Internal Market by free trade and harmonization of laws in the EU do have a deep impact on the approaches chosen and the results reached. A major conclusion is that none of the systems fully corresponds to the needs of both e-commerce and consumer protection on the Internet. This is so because, first, considerable diversity of rules continues to exist on domestic markets, and, second and more important, because the systems, in particular the system of the EU, are inward~oriented. The EU favors the establishment of the Internal Market, and thus neglects or even discriminates against e-commerce with third countries, an attitude which is patently at odds with the requirements of global e-commerce. This divide is further explained by a closer examination of the specific rules governing transnational e-commerce transac~tions, and of a number of specific problems of e-commerce such as consumer contract law, protection of personal data, treatment of unsolicited information, and conflicts of jurisdiction. The main conclusion is that States may considerably impair global e~commerce simply by failing to establish consistent and uniform systems of e-commerce regulation and consumer protection on the domestic level. Another, no less pessimistic conclusion is that the very reasons that impede satisfactory domestic laws in this field will also block the establishment of a satisfactory international regime of e-commerce and consumer protection. The only hope is that compatible legal standards will gradually develop in the course of globalisation. H.U.

The second decision of the European Court of Justice in the Factortame case,' that finally allowed registration for Spanish-held fishing vessels in the United Kingdom, was hailed in Westminsteraccording to a journalist-"like a declaration that Sir Francis Drake was a Dutchman."2 Euro-opponents in British Parliament called it a violation of Parliament's sovereignty (or supremacy), which apparently collided with the fundamental principle of supremacy of Community law. The Factortame case has repeatedly been the object of legal writing.3 However, authors either were not able to consider the decision of the House of Lords responding to the ruling of the European Court of Justice4 or mainly concentrated on aspects of

There is ongoing debate as to what competition law and policy is most suitable for developing jurisdictions. This book argues that the unique characteristics of developing jurisdictions matter when crafting and enforcing competition law and these should be placed at the heart of analysis when considering which competition laws are judicious. Through examining different factors that influence the adoption and implementation of competition laws in developing countries, this book illustrates the goals of such laws, the content of the legal rules, and the necessary institutional, political, ideological and legal conditions that must complement such rules. The book integrates development economics with competition law to provide an alternative vision of competition law, concluding that ‘one competition law and policy size’ does not fit ‘all socio-economic contexts'.

This outstanding collection of original essays brings together some of the leading experts in competition economics, policy and law. They examine what lies at the core of the ‘economic approach to competition law’ and deal with its normative and institutional limitations. In recent years the ‘more economic approach’ has led to a modernisation of competition law throughout the world. This book comprehensively examines for the first time, the foundations and limitations of the approach and will be of great interest to scholars of competition policy no matter what discipline.