(by Sean Ennis and Ben Evans) For the EU legislator, the proposal for a Data Act represents an important step towards the enactment of long-term rules aimed at establishing good governance of the data economy and appropriate incentives to innovate. While the proposed regulation contains many valuable provisions that are worthy of implementation, we find that insufficient thought appears to have been given to the potential implications of the cloud portability and interoperability provisions for competition and innovation. The broad idea with these provisions is to ensure that cloud customers are not locked-in to their current provider. Preventing lock-in is not easy, though, and entails the development of specific rules. One of the key proposals entails the establishment of ‘equivalence’ between cloud computing services. This assumes the existence of sets of ‘equivalent services’ and extends, under certain conditions, to the achievement of ‘functional equivalence’ across those services. Such an equivalence could facilitate the overarching objective of enabling cloud customers to switch relatively easily from one provider to another and to interoperate between different cloud providers. Although laudable in principle, an expansive definition of ‘equivalence’ could have unintended consequences that risks a chilling effect on innovation and competition by smaller cloud providers, and more generally upon those cloud computing services that are competing most assiduously to meet customer needs. In our recent paper, we examine the Data Act through a joint economic and legal lens, and explain why equivalence can have such a surprising unintended consequence.
Cloud Portability and Interoperability under the EU Data Act: Dynamism versus EquivalenceApril 6, 2023
Public service broadcasting – a renewed need in the time of recommender systems?December 6, 2022
(by Peter Ormosi[i]) Digitisation has entirely rewritten the way we consume audio and audio-visual content. Some of the market failures that characterised the analogue broadcasting era, have seemingly disappeared in a world where evaporating fixed costs mean that the most niche content is now available online. In this world, there are increasingly vocal arguments that there is no longer need for Public Service Broadcasting (PSB) if the market can also provide for even the most diverse audiences. But the large platforms which host vast amounts of digitalised content, may not quite be the land of milk and honey some had thought for consumers, and certainly not for the producers of content. The reason is to do with how the content is provided on the platform, through algorithmic recommendations, which are likely to suffer from biases. These biases have the tendency to create a world, that suffers from the same market failures (including the disproportionate underrepresentation of diverse, and niche content) that justified PSB in the analogue era. Because of these market failures, a new generation of PSB could have a critical role in ensuring the provision of online content that adheres to objectives, such as the provision of creative, high quality and distinctive output and services in a way that reflects, represents, and serves diverse communities.
An energy price cap could kill competition – here’s a better ideaMay 3, 2017
(by Catherine Waddams) The Conservatives have announced that their manifesto will include a pledge to cap the price of energy bills. This comes just two years after Labour campaigned to freeze household energy prices. The Tories are yet to flesh out the details of their plan, but it has already drawn strong reactions both for and against. The price of energy stirs deep emotions in part because it is a necessity, one which absorbs a much higher proportion of the income of those in poverty and “just about managing” than of richer households.
But there are two other important features: Read the rest of this entry »
Leniency in the Civil Aviation Authority’s Price Fixing Case: Will a Ringleader Ever Be Refused Immunity?December 22, 2016
(by Andreas Stephan) On 20 December 2016, the UK’s Civil Aviation Authority (CCA) found that East Midlands International Airport Ltd (EMIA) and Prestige Parking had breached competition law, by agreeing that Prestige would not sell its car parking services at below a minimum price that was linked to the price of EMIA’s own parking services. No fine was imposed in the case because Prestige Parking is no longer trading and EMIA received immunity in return for revealing the arrangement to the Competition and Markets Authority (CMA), under its leniency programme. We do not yet have the full decision, but the Press Release states, in relation to the minimum pricing that, “EMIA imposed this requirement as a condition of allowing Prestige to access facilities at the airport…”. This appears to suggest EMIA was awarded immunity despite instigating the arrangement. Read the rest of this entry »
Pfizer and Flynn: How are ‘excessive’ prices for generic drugs possible and should competition authorities do more about exploitative pricing?December 16, 2016
(by Farasat Bokhari & Bruce Lyons) Last week the UK Competition and Markets Authority (CMA) imposed a fine of approximately £90 million on Pfizer and a generic manufacturer Flynn Pharma, on the grounds that each abused a dominant position by charging excessive and unfair prices for phenytoin sodium capsules, an anti-epilepsy drug (brand name Epanutin). The price of a pack of 84 capsules of 100MG increased from £2.83 to £67.50 in October 2012. This came about as part of a deal where Pfizer sold the distribution rights in the UK to Flynn Pharma, who in turn ‘de-branded’ the drug, and sold the generic at an inflated price. The drug in question is not protected by any patents, so other generics are available and further generic entry is possible, yet the branded original drug was replaced by a higher priced generic. The CMA’s case is a rare example of an abuse of dominance finding (under Art. 102 and/or Ch.2 of CA98) in relation to exploitative pricing. While we await the full published decision, it is worth looking at industry price and quantity data to contextualise the CMA’s case. We also try to understand how this price hike was possible and ask whether the CMA should pursue more exploitative pricing cases. Read the rest of this entry »