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December 2018

Evaluating the EC Private Data Sharing Principles: Setting a Mantra for Artificial Intelligence Nirvana?

Begoña Gonzalez OteroIP Researcher and Consultant

This paper was initially drafted during a research stage at the Institute for Information Law (IViR), in

Amsterdam. I am grateful to Bernt Hugenholtz, Niko van Ejik, Kristina Irion, Joost Poort, Ste� van Gompel, Raquel Xalabarder and Claudia Tapia for

all their comments and feedback.

4iP Council is a European research council dedicated to developing high quality academic

insight and empirical evidence on topics related to intellectual property and innovation. Our research

is multi-industry, cross sector and technology focused. We work with academia, policy makers

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EvaluatingtheECPrivateDataSharingPrinciples:SettingaMantraforArtificialIntelligenceNirvana?

BegoñaGonzalezOtero

[email protected]

B.G.Otero,EvaluatingtheECPrivateDataSharingPrinciples:SettingaMantraforArtificialIntelligenceNirvana?

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1. IntroductionOnApril25,2018,theEuropeanCommission(EC)publishedaseriesofcommunicationsrelatedtodatatradingandartificialintelligence.Oneofthemcalled“TowardsaCommonEuropeanDataSpace”1,camewithaworkingdocument:“GuidanceonSharingPrivateSectorDataintheEuropeanDataEconomy”2.BoththeCommunicationandtheguidanceintroducetwodifferentsetsofgeneralprinciplesaddressingdatasharingcontractualbestpracticesforbusiness-to-business(B2B)andforbusiness-to-government(B2G)environments.Onthesameday,theECalsopublishedalegislativeproposaltoreviewthePublicSector(PSI)Directive3.ThesetwosimultaneousactionsarepartofamajorpackageofmeasuresaimingtofacilitatethecreationofacommondataspaceinEUandfosterEuropeanartificialintelligencetechnologies’development.Thisarticlefocusesonthefirstaction,the“GuidanceonSharingPrivateSectorDataintheEuropeanEconomy”.First,becauseitisoneofitskind.Sofar,thediscussionondatasharinginEuropehasbeenlessintensethanfordatatransfer.Maybebecausethelegalbasisforatransfercanbeasale,lease,rental,whiledatasharinglegalbasisismoreintricate,aswearelookingatnetworkstructuresandco-operation.Second,because,althoughtheseprinciplesdonotqualifyassoftlaw(lackingbindingforcebuthavinglegaleffects)theCommission’scommunicationssetactionplansforfuturelegislation.Third,becausetheultimategoaloftheseprinciplesistoboostEuropeanartificialintelligence(AI)development.However,dotheseprinciplessetaviablelegalframeworkfordatasharingorthispublicpolicytoolismerelyanaïveexpectation?Moreover,wouldtheseprinciplessetasuccessfulpathtowardathrivingEuropeanAIadvancement?Inthiscontribution,Itrytosketchsomeanswerstotheseandrelatedquestions.ItiscrucialtomentionthatECprivatedatasharingprinciplesevaluationhasclearconnectionstothedataownershipdebate4.Thispaperwillneitherre-examinethisaspectnortheintroductionofotherpossibledoctrines5norreviewanyother

1CommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegions"TowardsaCommonEuropeanDataSpace",COM(2018)232final.2CommissionStaffWorkingDocument“GuidanceonSharingPrivateSectorDataintheEuropeanDataEconomy”,SWD(2018)125final.3Seehttps://ec.europa.eu/digital-single-market/en/proposal-revision-public-sector-information-psi-directive(accessedonOctober15,2018).4Foranoverviewonthedata“ownership”debatesee:T.Hoeren,“ANewApproachtoDataProperty?”,AMI2018/2,p.58-60,availableat:https://www.ami-online.nl/art/3618/a-new-approach-to-data-property(accessedonOctober15,2018);B.Hugenholtz,“Dataproperty:UnwelcomeguestintheHouesofIP”,availableat:https://www.ivir.nl/publicaties/download/Data_property_Muenster.pdf(accessedonOctober15,2018);J.Drexl,“DesigningCompetitiveMarketsforIndustrialData-BetweenPropertisationandAccess”8(2017)JIPITECp.257;H.Zech,“ALegalFrameworkforaDataEconomyintheEuropeanDigitalSingleMarket:RightstoUseData”,11JournalofIntellectualPropertyLaw&Practice(2016),p.460-470.5Foranoverviewsee:M.Dorner,“BigDataund“Dateneingentum””,(2014),ComputerundRecht,p.617-628;OsborneClarkeLLP,LegalStudyonOwnershipandAccesstoData,StudypreparedfortheEuropeanCommissionDGCommunicationsNetworks,Content&Technology(2016),availableat:


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ramifications,suchastherighttoinformationprivacyandpersonaldataprotection6.Finally,theassessmentoftheseprincipleswillalsostayawayfromspecificconsumerlawissuesrelatedtotheuseofpersonaldata,including“counterperformance”asproposedintheDigitalContentDirective7.Thiscontributionisstructuredasfollows:Thefirstpartwillpresenttheproblemsatstake:whatisthecurrentstateofAIdevelopmentinEurope,theavailabilityofdataforAIandtheInternetofThings(IoT)researchanddevelopment,andthecurrentlegalframeworkofdatatrading.Thesecondpartwillevaluatetheprinciplesfromanoverallperspectivefocusingontheirunderlyinggoals.Theevaluationwillbeaddressedseparately:first,theprinciplesforbusiness-to-business(B2B)andnext,theprinciplesforbusiness-to-government(B2G)datatradingwillbeconsidered.Last,thepaperwillconcludebyansweringthequestionofwhetherthispublicpolicytoolismerelyanunrealisticexpectationorwhetheritsetsafavorableregulatoryapproachforasuccessfuldevelopmentofAIenabledtechnologiesinthesinglemarket.2. TheProblemsatStake:

2.1. TheStatusQuoofAIDevelopmentinEurope.Investmentinartificialintelligence(AI)hasrapidlyincreasedinthelastfiveyearsatinternationallevel.Accordingtoastudypresentedearly2018whichusedbasicresearchandmarketcapitalizationtotrackwhereAIisdone,Chinaleadstheformerstatistic,withtheU.S.behindandlongfollowedbytheUKandmodestlybyGermany,FranceandItaly8.Whenlookingatmarketcapitalization,thefirstfourlargestpubliccompanieswithAIexposureareApple,closedfollowedbyAlphabet,MicrosoftandAmazon9,allofthemheadquarteredoutsideEuropebutallofthemrunningbusinessinthesinglemarket.Then,whyisitEuropebehindtheUSandChinaincapturingtheopportunitiesofartificialintelligence10?First,forAIinnovationtohappen,R&Disamust.InthesectorofAIthistranslatesinto“forAItechnologiestoevolve,machinelearning(ML)needstohappen”.Machine

https://publications.europa.eu/en/publication-detail/-/publication/d0bec895-b603-11e6-9e3c-01aa75ed71a1/language-en(accessedonOctober15,2018).6SeeN.Purtova,“DopropertyrightsinpersonaldatamakesenseaftertheBigDataturn?Individualcontrolandtransparency”,10(2)JournalofLawandEconomicRegulationNovember(2017);TilburgLawSchoolResearchPaperNo.2017/21.AvailableatSSRN:https://ssrn.com/abstract=3070228(accessedonOctober15,2018).7ProposalforaDirectiveoftheEuropeanParliamentandoftheCouncilonCertainAspectsConcerningContractsfortheSupplyofDigitalContent,COM(2015)634final;seeA.Metzger,“DataasCounter-Performance–WhatRightsandDutiesdoPartiesHave?”8(2017)JIPITEC2p.2;A.Metzger,Z.Efroni,L.Mischau,J.Metzger,“Data-RelatedAspectsoftheDigitalContentDirective”9(2018)JIPITEC90p.18A.Goldfarb,D.Trefler,“AIandInternationalTrade”(2018)NationalBureauofEconomicResearch,WorkingPaper24254,availableat:http://www.nber.or/papers/w24254(accessedonOctober15,2018),p.2.9Ibid.p.3.10SeeJ.Manyika,“10imperativesforEuropeintheageofAIandautomation”,ReportMcKinseyGlobarlInstitute,October2017,availableat:https://www.mckinsey.com/featured-insights/europe/ten-imperatives-for-europe-in-the-age-of-ai-and-automation(accessedonOctober15,2018).


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learningisasubsetofAIthatallowscomputersystemstolearnbyanalyzinghugeamountsofdataanddrawinginsightsfromitratherthanfollowingpre-programmedrules11.Itrequireslotsofdatatocreate,test,and“train”thealgorithmsunderlyingtheAI.Examplescanbefoundinseveralfields,forinstanceindrugdiscovery,SanofihassignedadealtouseUKstart-upExscientia’sartificial-intelligence(AI)platformtohuntformetabolic-diseasetherapies,andRochesubsidiaryGenentechisusinganAIsystemfromGNSHealthcareinCambridge,Massachusetts,tohelpdrivethemultinationalcompany’ssearchforcancertreatments12.AnotherexamplefromacompletedifferentsectorisAlexa,Amazon’spoweredEchocylinder.Thehouseholdartificialintelligencedevicehelperthatcanturnoffthelights,telljokes,orletusreadthenewshands-free.Italsocollectsreamsofdataaboutitsusers,whichisusedtoimproveAlexaandaddtoitsuses.Howdoesthishappen?99%oftheprocessingofAlexa’stakesplaceinAmazon’sCloud.Asthetechnologyisbasedonvoicerecognition,thedeviceneedstobealways“alert”listening,butnotrecording.ThemomentthemachinerecognizestothewordAlexaorothersimilarwakeword,itactivates,startsrecordingandthesnippetissenttoAmazon’scloud,anduseforfurthertrainingoftheartificialintelligencedevice13.However,itisimportanttonotethatnotallAIsystemshavethesametypeofdatarequirements,somearemore“data-hungry”thanothers.Thus,asAI-enabledtechnologiesarebecomingmoreimportanttotheeconomy,sotooarelargequalitydatasets.Largedatasets,meaningstructured(notraw)data,arecriticalinputforcompaniesthatwanttocreateanddevelopAIsystems.EventhebestAIalgorithmswouldbeuselesswithoutanunderlyinglarge-scaledataset,becausedatasetsareneededfortheinitialtrainingandfine-tuningofthesealgorithms.Therefore,wearetalkingaboutcollectionsofseparatesetsofinformationthatthecomputer,thealgorithm,willtreatasasingleunit.Itincludesrawandprocesseddata,information,andsoon.Toproducelargedatasetsaconsiderableinvestmentisnecessary,andnotallfirmsinvolvedorwhowanttoentertheAItechnologymarketcanaffordthesecosts.ButabusinessthatlacksaccesstogooddatasetsfacesasubstantialbarriertoenteringamarketinvolvingAItechnologies.Second,mostdatausedforresearchanddevelopmentofAItechnologiescomefromtheInternetofThings(IoT).AlthoughthedefinitiononwhatIoTisfuzzy14,expressionssuchas“smartcars”,“smartphones”,“smarthomes”arecommonnowadays.Wenormallyrelatesuchexpressiontosensorsembeddedintodevicesofallkind,connectedtotheInternet,transferringdataoveranetwork.Butinfact,allIoT-related

11TheRoyalSociety,MachineLearning:ThePowerandPromiseofComputersthatLearnbyExample,(2017),p.49availableat:https://royalsociety.org/~/media/policy/projects/machine-learning/publications/machine-learning-report.pdf(accessedonOctober15,2018).12SeeN.Fleming,“Howartificialintelligenceischangingdrugdiscovery”,Nature,30May2018,availableat:https://www.nature.com/articles/d41586-018-05267-x(accessedonOctober15,2018).13Forfurtherdetailssee:Amazon’swebsitesectiononmachinelearningat:https://aws.amazon.com/machine-learning/?nc1=h_ls(accessedonOctober15,2018);S.Levy,“InsideAmazon'sArtificialIntelligenceFlywheel”,Wired,(2018),availableat:https://www.wired.com/story/amazon-artificial-intelligence-flywheel/(accessedonOctober15,2018).14SeeR.Minerva,A.Biru,D.Rotondi,“TowardsaDefinitionoftheInternetofThings(IoT)”IEEE(2015),availableat:https://iot.ieee.org/images/files/pdf/IEEE_IoT_Towards_Definition_Internet_of_Things_Revision1_27MAY15.pdf(accessedonOctober15,2018).


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devices,nomatterhowdifferenttheymaybe,domuchmorethanthat.IoTrelateddevicesalwaysfollowfivebasicsteps:theysense(theenvironment);theytransmit(data);theystore(data);theyanalyze(datasets)andthen,acton(datasets).ForanyIoTapplicationtobeworthbuying(ormaking),itmustdemonstratevalueinthelaststepofthatchain,the“acton.”15ArtificialIntelligenceandtheInternetofThingsareintrinsicallyconnectedandinneedofeachothertounleashtheirpotential.ThetruevalueofanyIoTproductandbyproductisdeterminedbyAI,ormoreprecisely,bythemachinelearningprocess.ReasonisthatmachinelearningallowsthecreationofsmartactionsthatmakeIoTproductsandbyproductsvaluabletoconsumers.Thekey:findinginsightsindatasets.Third,althoughthevolumeofdataincreasesfastitisnotreallyavailablebetweeneconomicoperators.Recentpredictionsarethatby2020,thenumberofIoTconnectionsinEuropewillreach6billion16.Accordingtoa2017researchreportbytheCentreforthePromotionofImportfromdevelopingcountries(CBI),Europehasanalmost40%shareoftheglobalInternetofThingsmarket,projectedtoreachavalueofaround€1.2trillionin202017.However,theexistenceofmajorissuesregardingaccessandtransmissionofthedatageneratedbyIoTdeviceshasbeenwellrecognizedbytheJanuary2017EuropeanCommission’sCommunication“BuildingaEuropeanDataEconomy”.Muchofthosedataaregenerated,retainedandlateronanalyzedin“silos”bythe“owners”ofthetechnology18.Thismakesitverydifficultfor(European)businessesandorganizationstoaccessandusedatasets.Ifcompaniesfacehighbarrierstoaccessingsuchdatasets,thentheymayoptnottoenteramarketthatrequireslargedatasetsasinputs,leadingtolesscompetition.Companiesmayforgoentrybecauseofthisdifficulty,andsocompetitionwoulddeclineinbothnewandestablishedmarkets.Consequently,alackofshareddataaccesswouldharmconsumers,sometimesviahigherprices,sometimesviaareductioninthenumberofimprovedfeaturesorotherinnovations.Altogether,Europeisrunningbehindintheartificialintelligenceglobalraceandinneedofastrategythatpromotesthedemocratizationofdatatoovercomethesechallenges.Ifthiscurrentsituationwouldbeduetoamarketfailure,aregulatoryinterventionwouldbejustified.Yet,wouldtheEC’sproposedcontractualprinciplessuit?

15“Toacton”canmeananinfinitenumberofthings,rangingfromaprofoundphysicalaction(e.g.deployinganambulancetothesiteofanautoaccident)tomerelyprovidingbasicinformationtoarelevantconsumer(e.g.sendingatextmessagetoalertadriverthattheircarneedsanoilchange).Butnomatterwhattheultimatestepof“acton”actuallyis,it’svalueisentirelydependentonthepenultimateanalysis.16ECFinalreport-Study“DefinitionofaResearchandInnovationPolicyLeveragingCloudComputingandIoTCombination”,March31,2016,p.10;SMARTnumber2013/0037;availableat:https://publications.europa.eu/en/publication-detail/-/publication/35f3eccd-f7ce-11e5-b1f9-01aa75ed71a1/language-en(accessedonOctober15,2018).17See:“TheInternetofThingsinEurope”(2017)CBI-MinistryofForeignAffairs;availableat:https://www.cbi.eu/market-information/outsourcing-itobpo/internet-things/(accessedonOctober15,2018).18CommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegions"BuildingaEuropeandataeconomy",COM(2017)09final.


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2.2. AvailabilityofDataforAIandIoTResearchandDevelopmentApre-conditionofdatasharinganddatatransferisdataaccess.Asmentioned,accesstoprivatelyheldandcontrolleddataisconsideredbytheECaskeytothedevelopmentofAIandIoTtechnologiesinEurope,andonlyaccesseddatacanbere-used.Datasetsaccessandusearedirectedbybothcontractualandtechnicalfactors.Atthecontractuallevel,thereisarangeofpermissions,policies,legalconsiderations,personalandorganizationalpreferences,andotherfactorsthatimpactthedataaccessrights.Rights,inthiscontext,maycoverpermissionstoview,use,reuse,repurpose,ordistributedata.Metadataattributes,suchas“rightsmanagement,”canbeassignedtodatamanuallyorautomatically.Whenapplied,rightsmanagementindicatesdataaccessstatusanduseconditions.Theseconventionsareprimarilycontractualandinformtechnicalaspectsofsystemdesign.Tounderstandthecomplexitiesofdataaccess,bothcontractualandtechnical,itishelpfultofirstreviewthestatusofdataaccess,specifically,whatismeantbyopenandcloseddata.Thetermopendataisveryspecificandcoverstwodifferentaspectsofopenness.First,thedataislegallyopen,whichinpracticegenerallymeansthatthedataispublishedunderanopenlicenseandthattheconditionsforre-usearelimitedtoattribution.Second,thedataistechnicallyopen,whichmeansthatthefileismachinereadableandnon-proprietarywherepossible.Inpractice,thismeansthatthedataisfreetoaccessforeverybody,andthefileformatanditscontentarenotrestrictedtoaparticularnon-opensourcesoftwaretool19.Theabsenceofrestrictionsurroundingopendataextendstoanyendeavor,includingcommercialization.Therearearangeoflicensesthatdataproducersordatahostsappendtodata,indicatingopenaccess20.FollowingOpenDataInstitute’sdefinition,closeddatareferstodatathatcanonlybeaccessedbyitssubject,ownerorholder21.Closeddataoftencontainprivateorsensitiveinformation.Closeddataextendacrossawiderangeofentities,topics,andenvironment.Examplesofcloseddataincludepersonal,institutional,orindustrydataidentifyingfinancialresources(e.g.,sums,transactions,accountnumbers),personalinformationrelatingtohealthandwell-being,orstatus(e.g.,married,single,divorced).Datamayalsobedesignatedasclosed,orregulatedbycontrolledaccess,duetolegalrestrictionsororganizationalpoliciesprotectingcurrentorpredictedvalue22.Morespecifically,dataaccessisoftenrestrictedbecauseofaknownorperceivedcompetitiveadvantage,andtheassociatedriskswithmakingitpublic,including19SeeEuropeanDataPortal,GeneralDefinitionofOpenData,availableat:https://www.europeandataportal.eu/en/providing-data/goldbook/open-data-nutshell(accessedonOctober15,2018).20SeeCreativeCommonsLicensesathttps://creativecommons.org/(accessedonOctober15,2018)21DefinitionbytheOpenDataInstitute,availableat:https://www.theodi.org(accessedonOctober15,2018).22SeeT.Aplin,“TradingDataintheDigitalEconomy:TradeSecretsPerspective”inS.Lohsse,R.Schulze,D.Staudenmayer(eds.),TradingDataintheDigitalEconomy:LegalConceptsandTools,(2017)BadenBaden,Nomos,p.59.


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misuse,ifthedatafallintothewronghands.Closeddataareaccessibletoindividualsororganizationswhohavetheappropriatepermissions.Currently,mostAI-centeredinnovationisbasedonabusinessmodelwheremosttrainingdatasetsareconsideredcloseddata.Suchdatasetsasnotedbefore,areinprivatesilos,notnecessaryinmachinereadableandnon-proprietaryformats.DatastoringisalreadywellestablishedasadefensivestrategyamongAI-centriccompanies.Google,Microsoftandothershaveopen-sourcedlotsofsoftware,andevenhardwaredesigns,butarelessfreewiththekinddatathatmakessuchtoolsuseful23.ManystartupsandSMEshavenobargainpowerwhennegotiatingalicensetogetaccessanduseoftrainingdatasets,neithercanaffordthecosts.Asecondchallengewhenlookingatdatasetslicensingisthatdatacanbeprotectedbyanoverlappingpatchworkofdifferentintellectualpropertyrights24andcontractualrestrictionsonthepurposesforwhichthedatacanbeused.Forexample,onecommonmisconceptionisthatanyfreelyavailableonlinedatacanbere-usedforanypurpose.Thisoftenisn’tthecase;websitetermsandconditionsalongwithcopyrightandotherIPrights,suchasthedatabaseright,canpreventthedatafrombeingusedtotrainamachinelearningsystem.Fromthepracticalpointofview,manySME’sarefacedwiththeproblem(andassociatedcosts)ofdraftingB2Blicensingcontractswithanecessarydegreeoflegalcertaintyinrespectoftheconditionsforandscopeoftheusesallowedbythirdparties,andEuropelacksanysortofstandardcontractsorbestpracticesonthisregard.Aspreviouslymentioned,accesstocloseddataisconsideredbytheEuropeanCommissionaskeytothedataeconomyandtothedevelopmentofAItechnologiessinceonlyaccesseddatacanbere-used.AstheCommissionacknowledgedintheirCommunication“BuildingaEuropeandataeconomy”25whenevaluatingthequestionof“ownership”ofdataintheindustrialcontext,“voluntarydatasharingmightemerge,butnegotiatingsuchcontractscouldentailsubstantialtransactioncostsfortheweakerparties,whenthereisanunequalnegotiationpositionorbecauseofthesignificantcostsofhiringlegalexpertise”.Finally,ifaccesstodataisdenied,thequestionofcompulsorylicensingbecomesrelevant26,aswellascompetitionlawintervention.Butinthecaseofaccesstodatasets,asitwillbeexplainedinasubsequentsection,relyingoncompetitionlawastheonlyregulatorytoolmightnotbetothesmartestmove.

23T.Simonite,“AIandEnormousDataCouldMakeTechGiantsHardertoTopple”,Wired,July,2017,availableat:https://www.wired.com/story/ai-and-enormous-data-could-make-tech-giants-harder-to-topple/(accessedonOctober15,2018).24ForadetailedexplanationofthecurrentintellectualpropertyrightsframeworkofdataintheEU,seeB.Hugenholtz,supran4.25Seesupran18.26Foradetailedstudyoncompulsorylicenseindatatradingsee:R.H.Weber,“ImprovementofDataEconomyThroughCompulsoryLicenses?”inS.Lohsse,supran22,p.137.


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AvailabilityoftrainingdatasetsforAIandIoTR&Disstillahurdle,that,ifnotreduced,couldstifleSMEsinnovation,reducetheoverallsizeoftheAImarketandthebenefitsthatAIcouldbringtothesociety.3. LegalFrameworkofDataSharinginEuropeIfwelookatthedatatrading(andsharing)relationshipswithintheEuropeansinglemarket,threearetheexistingdatasetsstreams:Publicsectorinformationtocompanies(i.e.governmenttobusinessorG2B);companiestopublicbodies(i.e.businesstogovernmentorB2G);andcompanytocompany(i.e.businesstobusinessorB2B).Untilnow,onlyonetheseflowshasbeenpartlyregulated.AndthisistheG2B.Thepublicsectorisoneofthemostdata-intensesectorswithintheEuropeanUnion.PublicSectorInformation(PSI)isthewiderangeofinformationthatpublic-sectorbodiescollect,produce,reproduce,anddisseminateinmanyareasofactivitywhileaccomplishingtheirinstitutionaltasks.Inotherwords,publicsectorinformationmeansinformationpublicbodiesproduceaspartoftheirpublictask.Thatis,aspartoftheircorerolesandfunctions,asdefinedinlegislationorestablishedthroughcustomandpractice.Accessandre-useofthesedatahavebeenregulatedviathePublic-SectorInformationDirective(PSIDirective)27.ThePSIDirective,providesacommonlegalframeworkforaEuropeanmarketforgovernment-helddata.TheDirectivewassubjecttoareviewin2013andiscurrentlyagainunderreview.TheaimofthecurrentrevisionistostrengthenthepositionofSMEsbydismantlingmarketbarrierstoreusingpublicsectorinformationforcommercialpurposes.Thisisbecausere-useofopendatabyprivatecompaniescouldcontributetothedevelopmentofartificialintelligenceandIoTmarkets.Accordingtotheimpactassessments28,threearethemainbarriers:- datageneratedbyutilities,transportandpubliclyfundedresearchhave

tremendousreusepotential,butarenotcoveredbythecurrentrules,eventhoughmuchofthisresearchisfullyorpartlyfundedbypublicmoney;

- real-timeaccesstopublicsectorinformationisrare.Thispreventsthedevelopmentofproductsandservicesusingreal-timeinformation,suchasmeteorologicalandtransportapps,and;

- there-useofPSIdatacanbeveryexpensive,dependingonthepublicinstitutionofferingthem.

WeneedtowaitandseetheoutcomesofthediscussionsbetweentheEuropeanParliamentandtheCouncil,beforeanyfurtherevaluations.

27Directive2013/37/EUoftheEuropeanParliamentandoftheCouncilof26June2013amendingDirective2003/98/EConthere-useofpublicsectorinformation,OJL175,27.06.2013,p.1-8(PSIDirective).28Availableat:https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-4540429_en(accessedonOctober15,2018).


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SharingofdatasetsbothinB2BorB2Grelationshipsfallsundercontractlawandtheprincipleoffreedomofcontract.AscontractlawispartofMemberStates'nationallaw,therulesaroundprivateandpublicorganizationsenteringintoacontractfordatasharing,access,useandre-useareessentiallythesubjectmatterofnationallaw.Sameappliestoregulationsoncontractterms,leftfortheMemberStatestodecideundernationallaw.Besides,B2Bcontracttermshavelongbeensupportedbyfreedomofcontractanddistinguishedfrombusiness-to-consumer(B2C)whichareheavilyregulated.Forinstance,B2BunfairnesscontrolofstandardtermsandconditionsisanunfamiliarconceptforthemajorityofMemberStateswheresuchregimedoesnotexistandinothers,andwhereitdoesexist,likeinGermany,ithasbeencriticized29However,inthelastyearsandincertainsectors,studiesandconsultationscommissionedandlaunchedbytheEChaveshowedimportantconcernsregardingspecifictypesofB2Btradingpractices.TheyhavealsostemfromtheviewthatB2Brelationshipsarenottobecompletelyleftforthepartiestodeterminebutthattheweakerparty,oftenasmallandmediumsizedcompany(SME),shouldbegivencertainlegalprotectioninawaythatcannotbedisplacedoragreedotherwisebetweentheparties.ExampleofthisistheDirective(EU)2015/2366onpaymentservices(PSD2Directive)30,whichwasimplementedatnationallevelinJanuary2018,andgivesMemberStatesdiscretiontotreatsmallandmediumsizedenterprisesasconsumersinapplyingtheconductofbusinessruleswhenapaymentserviceisprovidedtothem31.TheFoodSupplyChainProposalDirectiveisanotherexampleintothesamedirection32.AndathirdexampleistheProposalforaRegulationonOnlinePlatforms33,publishedinApril2018,whichprovidessameprotectionsforbothSMEsandnon-SMEsbusinessesusingtheonlineintermediationservices.

Inthecurrentnormativeframework,onlycompetitionlawprovidesaverywideonetopreventabusesinbothB2BorB2G.Inthecaseofdatasharingthiswouldbebetweenadataholderandaparty(anotherfirmorapublicbody)whowantstohaveaccessand/orusetotheparticulardata.

29See:M.Lehman,J.Ungerer,“SavetheMittelstand:HowGermanCourtsProtectSmallandMedium-SizedEnterprisesfromUnfairTerms”(2017)EuropeanReviewofPrivateLaw,25(2),pp.313,recommendingnottoemulatetheGermanB2BcontrolofstandardtermsmodelontheEuropeanlevel.30Directive(EU)2015/2366oftheEuropeanParliamentandoftheCouncilof25November2015onPaymentServicesintheInternalMarket,amendingDirectives2002/65/EC,2009/110/ECand2013/36/EUandRegulation(EU)No1093/2010,andrepealingDirective2007/64/EC,OJL337,23.12.2015,p.35-127(PSD2Directive).31Article38PSD2Directive.32ProposalforaDirectiveoftheEuropeanParliamentandoftheCouncilonUnfairTradingPracticesinBusiness-To-BusinessRelationshipsintheFoodSupplyChainCom/2018/0173Final-2018/082(Cod).33ProposalforaRegulationoftheEuropeanParliamentandoftheCouncilonPromotingFairnessandTransparencyforBusinessUsersofOnlineIntermediationServicesCOM2018/0112Final-2018/328.


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Somescholarshaveproposedtheneedofregulatoryinterventionbycraftingdefaultcontractrules34.Thiswouldprovideagenerallegalstandardonwhatabalanceddistributionofrightsandobligationsisinacontractualrelationshipbetweenthedataholderandtheotherpartyrequestingdataaccessand/oruse.Somestakeholdershaveshowedtheirdisconformitywiththisregulatoryapproach35andconsidernolegalinterventionisnecessary.Additionally,asexplainedintheprevioussection,contractualrelationshipsbetweenpartiestradingindataimplytheuseoflicenses.Modellicensesornon-mandatoryrulesontheuseandcontentoflicensesmightnotbeenoughtodemocratizeaccessanduseofcloseddataandboostartificialintelligenceinEurope.ParticularlyinthecaseofB2Gsupplyofprivatedataunderconditionsforre-use,oneshouldwonderwhetherandtowhatextentmandatorylicenseswouldbenecessaryorwhetherpublicorganizationsandprivatecompaniesshouldbeleftontheirownundertheprincipleoffreedomofcontract36.Whenlookingatthiscomplexscenario,the(non-mandatory)contractualprinciplespublishedbytheEuropeanCommissionmightseematoddlerstep,butweshouldnotforgetthattheirCommunicationsareapublicpolicytoolwhichsetactionplansforfuturelegislation.Havingsaidtheabove,anotherfactthatisworthbringinginthiscontext:OnApril23,2018,twodaysbeforetheEC’sCommunicationanditsguidanceoncontractualprincipleswerepublished,acoalitionofassociationsfromtheEUagri-foodchainpresentedajoint“EUCodeofConductonAgriculturalDataSharing37”.Thisself-regulationinstrumentpromotesthebenefitsofsharingdataandenablesagri-businessmodelstoswiftlymoveintoadigitaldataenhancedfarming.TheelevenpagesoftheCodeshedgreaterlightoncontractualrelationsandprovideguidanceonaccessanduseofdatatopics.Itisimportanttorecallthatbothagricultureandautomotivesectorshavebeenattheheartofthedebatearound“dataownership”and“dataaccess”,thustherelevanceofasectorialcodeofconductwhichfocusesondataaccessandre-use,ratherthaninownershipregimes.Thiscanbealsoasymptomthatself-regulationcouldbefollowedbyothersectors,suchasmobility,health,automotive,energyoraerospace,whereindustriesarerather34F.GrafvonWestphalen,“ContractswithBigData-TheEndoftheTraditionalContractConcept?”inS.Lohsse,supran22,p.249;Twigg-Flesner,“DisruptiveTechnology-DisruptedLaw?HowtheDigitalRevolutionAffects(Contract)Law”inDeFranceschi(ed.)EuropeanContractLawandtheDigitalSingleMarket,Intersentia,2016,p.21.35SeeindividualresponsestoECConsultationBuildinganEuropeanDataEconomybyBayerAG;IndustryCoalitiononDataProtection(ICDP);CommunityofEuropeanRailwayandInfrastructureCompanies(CER);Ibec;availableat:https://ec.europa.eu/digital-single-market/en/news/public-consultation-building-european-data-economy(accessedonOctober15,2018).36Ontheneedofcompulsorylicensesindatasharingandtransfersee:R.Weber,“ImprovementofDataEconomythroughCompulsoryLicenses?”inS.Lohsse,supran22,p.137;M.Grützmacher,“DataInterfacesandDataFormatsasObstaclestotheExchangeandPortabilityofData:IsthereaNeedfor(Statutory)CompulsoryLicensing”inS.Lohsse,supran22,p.189.37Availableat:http://www.cema-agri.org/publication/new-brochure-eu-code-conduct-agricultural-data-sharing(accessedonOctober15,2018).


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reluctantabouttheestablishmentofdataaccessclaims38;maybebecausetheyareawarethatthereisnoone-waysystemandthattoday’splaintiffcouldbeontheothersidetomorrow,beingforcedtoprovideaccesstocompetitors.Allinall,forboth,boostingEurope’sartificialintelligencetechnologyandharvestingthefullbenefitsofIoT,companiesalsoneedtounderstandthepracticabilityandimpactoftheprinciplesproposedbytheCommission.Thus,lookingcloserattheprinciplesthemselvesmightshedsomelightonwhatkindoflegalintervention,ifany,thefuturewouldbring.4. EvaluatingthePrinciplesonPrivateDataSharingTheECCommunicationanditsaccompanyingworkingdocument39presenttwoseparatesetsofprinciples,whicharemeanttoguideoncontractualrelationswheredataaresharedbetweenbusinessorganizationsorwheredataaresuppliedbyabusinessorganizationtopublicsectorbodies.Toevaluatethemandanswerthequestionoftheirpracticalusetheanalysiswillgoasfollows:First,alookintothepolicyreasonsmotivatingthem,asdescribedintheintroductionoftheCommunicationandtheGuidance.Second,astheseprinciplesandtheirunderlyinggoalscorrespondtodifferentcontractualrelationships,B2BandB2G,aseparateanalysisofeachsetofprinciples.Withinthispart,theB2Banalysiswillconcentrateontheirunderlyingobjective,namely(to)“ensurefairmarketsforIoTobjectsandforproductsandservicesrelyingondatacreatedbysuchobjects”.ThisconnectswiththedebateoncontractstandardtermsandthechallengesofleavingthepreventionofabusesinB2Balonetocompetitionlaw.TheB2Ganalysiswillfocusontheprinciples’primaryreason,whichisto“supportthesupplyunderpreferentialconditionsforre-use.”Thiswouldleadtothenotionofpublicinterestintheuseandre-useofprivatesector(closed)data.4.1. PolicyBehindthePrinciplesWhenreadingtheintroductiontotheseprinciples,onecannotmissthesameandtruthfulcommonmessageinmanyoftheCommissioncommunicationsrelatedtoEuropeanCommission’sbig-datastrategyandEuropeandataeconomy:“data-drivenisakeyenableofgrowthandjobsinEurope.TheimportanceofdatacollectedonlineandgeneratedbytheInternetofThings(IoT)objects,andtheavailabilityofbigdataanalyticstoolsandartificialintelligenceapplicationsarekeytechnicaldrivers.”Assomeeconomicstudieshaveshown40,weshouldtakethisstatementwithagrainofsaltduetoseveralreasons.38SeeM.McCarthy,etal.,ECFinalReport“AccesstoIn-VehicleDataandResources”May2017,p.55,194(AccesstoIn-VehicleReport)andM.Barberoetal,ECFinalReport“Studyonemergingissuesofdataownership,interoperability,(re-)usabilityandaccesstodata,andliability”(2016),SMARTnumber2016/0030,p.31andff.(EmergingIssuesReport).39Seesupran1andn2.40N.Duch-Brown,B.Martens,F.Mueller-Langer,“TheEconomicsofOwnership,AccessandTradeinDigitalData”(2017),JRCDigitalEconomyWorkingPaper2017-01,availableat:https://ec.europa.eu/jrc/sites/jrcsh/files/jrc104756.pdf(accessedonOctober15,2018);W.Kerber,J.S.


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Inthefirstplace,itisindeedtruethatdatacanbeusedmultipletimeswithoutinherentlydiminishingitsvalue;thus,fosteringthesharingandre-useofdataamongcompaniesislogical.Butforthosewhoharvestdata,sharingandmakingdatasetsavailableforre-useincertainformatscomewithhighcosts.Therefore,althoughdataassuchisanonrivalresource,itmightnotalwaysbeefficientforcompanieswhohaveinvestedindatacollectiontosharesuchdatasetsasamatterofprinciplewithothercompaniesonlyforthesakeofmaximumdataexploitation.Onthisregard,thenonrivalnatureofdatashouldnotbeperseturnedintoamaximumefficiencyargumentprodatasharingalone.Second,datahavenovalueinthemselves,onlyattheirpointofuse.Thisiswhyweshouldbetalkingabout“datasets”insteadof“data”.Todelivervalue,datasetsneedtobemixedandmergedwithotherdatasets41.Thedataholderisnotalwaysbestplacedtoextractvaluefromthosedatasets:thisplayercouldlacktheskills,thecultureortheincentivestodeliverinnovation.Inotherwords,asWalshandPollocksaid:“thecoolestthingwithyourdata(sets)willbethoughtofbysomeoneelse.”42Butevenifinsomecasesthemostinnovativeapplicationscomefromunpredictableusageofexistingdatasets,thisshouldnotbeconsideredasthegeneralrule.Last,thesamedegreeofcautionshouldapplywhenmakingstatementsabouthowbusinessesalreadybenefitfromaccesstopublicsectorinformationavailableasOpenData.Forinstance,onestudyconcludesthatalthoughthefocusofthePSIDirectiveistoencouragecommercialactivityinthehopethatthisleadstonewbusinessmodelsandeconomicgrowth,aharmonizedDigitalSingleMarketofPSIisstillfarfrombeingreality43.Thus,theEUinstitutions’ambitionofthecreatingofaharmonizedpublicinformationmarketacrosstheEUbothintermsofthetypeofunderlyingworksandintermsofcompatibilityofprocesses,licensingandformats,isstillintheworks(andunderreview).4.2. TheBusiness-to-Business(B2B)Principles

Frank,“DataGovernanceRegimesintheDigitalEconomy:TheExampleofConnectedCars”(November3,2017);availableathttps://ssrn.com/abstract=3064794(accessedonOctober15,2018);W.Kerber“RightsonData:TheEUCommunication“BuildingaEuropeanDataEconomy”fromanEconomicPerspective”(September1,2017).Forthcoming,S.Lohsse,R.Schulze,D.Staudenmayer(eds.),TradingDataintheDigitalEconomy:LegalConceptsandTools,(2017)BadenBaden,Nomos;availableatSSRN:https://ssrn.com/abstract=3033002(accessedonOctober15,2018).41Onthequestionofwhetherthesedatasetscouldbeprotectedunderthesuigenerisdatabaseright,theanswerisprobablynot.AsHugenholtz’sexplains,itseemsthatfortheEuropeanCourtofJustice“investmentin‘creating’datadoesnotcounttowardsinvestment(criterionforprotection),evenifsuchepistemologicaldistinctionbetween‘creating’and‘obtaining’dataisnotself-evident”.Foradetailedexplanation,seeB.Hugenholtz,“Dataproperty:UnwelcomeguestintheHouseofIP”(supran4)p.7-8.42J.Walsh,R.Pollock,“Thecoolestthingtodowithyourdatawillbethoughtofbysomeoneelse”,(2007)OpenDataandComponentization,XTech2007availableat:http://assets.okfn.org/files/talks/xtech_2007/(accessedonOctober15,2018).43A.Wiebe,N.Dietrich(eds.)“OpenDataProtection:Studyonlegalbarrierstoopendatasharing–DataProtectionandPSI”(2017)Universitätverl.Göttingen,p.248.


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Therearefivekeyprinciplesthat,ifrespected,wouldensurefairandcompetitivemarkets:Transparency;sharedvaluecreation;respectforeachother’scommercialinterests;(to)ensureundistortedcompetition;and,(to)minimizeddatalock-in.TheCommunicationdefineseachasfollows:

a) Transparency:Therelevantcontractualagreementsshouldidentifyinatransparentandunderstandablemanner(i)thepersonsorentitiesthatwillhaveaccesstothedatathattheproductorservicegenerates,thetypeofsuchdata,andwhichlevelofdetail;and(ii)thepurposesforusingsuchdata

b) Sharedvaluecreation:Therelevantcontractualagreementsshouldrecognizethat,wheredataisgeneratedasaby-productofusingaproductorservice,severalpartieshavecontributedtocreatingthedata.

c) Respectforeachother'scommercialinterests:Therelevantcontractualagreementsshouldaddresstheneedtoprotectboththecommercialinterestsandsecretsofdataholdersanddatausers.

d) Ensureundistortedcompetition:Therelevantcontractualagreementsshouldaddresstheneedtoensureundistortedcompetitionwhenexchangingcommerciallysensitivedata.

e) Minimizeddatalock-in:Companiesofferingaproductorservicethatgeneratesdataasaby-productshouldallowandenabledataportabilityasmuchaspossible44.Theyshouldalsoconsider,wherepossibleandinlinewiththecharacteristicsofthemarkettheyoperateon,offeringthesameproductorservicewithoutorwithonlylimiteddatatransfersalongsideproductsorservicesthatincludesuchdatatransfers.

A. Principles’Goal:FosteringDataSharingEnvironmentstoEnsureFairand

CompetitiveIoTMarkets

OntheB2Bdatasharing,theunderlyinggoalisto“ensurefairmarketsforIoTobjectsandforproductsandservicesrelyingondatacreatedbysuchobjects.”WhenlookingattheresultsoftheSynopsisReportConsultationon“BuildingaEuropeanDataEconomy”45,itisinterestingnotingthataconsiderablemajorityofthestakeholderswereagainstanykindregulatoryinterventionbecauseintheirview,someofthedataaccessissuessetoutintheCommunicationmayresultfromthenormaldynamicofanemergingmarket,ratherthanfromamarketfailure46.ThequestioniswhytheCommissionproposesthissetofprinciplesundertheabove-mentionedgoal.Eventhoughthereisnoclearevidenceofamarketfailure,

44E.g.dataproducedbyrobotsinthecontextofindustrialprocesses,relevantforprovisionofafter-salesservices(e.g.repairandmaintenance),ordataontheratingofserviceproviders.45SeeAnnextotheSynopsisReport:Detailedanalysisofthepubliconlineconsultationresultson“BuildingaEuropeanDataEconomy”,availableat:https://ec.europa.eu/digital-single-market/en/news/synopsis-report-public-consultation--building-european-data-economy,p.12-13(accessedonOctober15,2018).46SeeindividualresponsesbyBayerAG;IndustryCoalitiononDataProtection(ICDP);CommunityofEuropeanRailwayandInfrastructureCompanies(CER);Ibec;availableat:https://ec.europa.eu/digital-single-market/en/news/public-consultation-building-european-data-economy(accessedonOctober15,2018).


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asrecenteconomicstudieshavepointed,itisnotlesstruethatweareinanecosystemwithpredominantpresenceof(traditional)data“silos”47.ForIoTandAImarketstoemergeandconsolidateintheEuropeanUnion,weneedadatasharingecosystem.ItistothesettingofsuchecosystemsthattheCommissionisproposingthesefiveguidingprinciples.AnditneedstobeclearlystatedthatwhenconsideringIoT(andartificialintelligenceapplicationsasanextensionofIoT),wearetalkingaboutseveralmarkets,thus“marketsforIoTobjectsandmarketforproductsandservicesrelyingondatacreatedbysuchobjects.”48TohelpatunderstandingthispreviousstatementitcrucialtounderstandwhattheInternetofThingsecosystemconsistsof:First,IoTobjectsdonot“create”databutrather“collect”or“collectandacton”data.TheseobjectsareadifferentsetofelementswhichconstitutethefirstbuildingblockofanIoTplatform.Thosedevicesarepartoftheso-calledphysicallayer,thehardware,the“thing”.Thesesensors,actuatorsanddevicescollectdatafromtheenvironmentorperformactionsintheenvironment.Theyneedcertaincomputingpower,electricpower,cooling,memory,sometimesspecialfootprint,multimediasupportandconnectivity.Buttheydonotworkalone;theyarepartofanecosystem,theplatform.Accordingly,theelectronicutilitythatmeasuresphysicalproperties,thesensor,sendscollecteddatatoanaggregatorinacloudthattransformsgroupsof“rawdata”into“intermediatedata.”Togettothecloud,thesensorcanbeconnectedthroughavarietyofmethodsincluding:cellular,satellite,WIFI,Bluetooth,low-powerwide-areanetworks(LPWAN)orconnectingdirectlytotheinternetviaethernet.Oncethedatagetstothecloud,softwareperformssomekindofprocessingandthenmightdecidetoperformandactionthatgoesbacktotheuser.

Second,datamanagementofIoTdataisdifferentfromtraditionaldatamanagementsystems.Intraditionalsystems,datamanagementhandlethestorage,retrieval,andupdateofelementarydataitems,recordsandfiles.InthecontextofIoT,datamanagementsystemsmustsummarizedataonlinewhileprovidingstorage,logging,andauditingfacilitiesforofflineanalysis49.PatternrecognitionanddataminingtechniquescanbeusedforthemultitudeofIoTapplicationsandproducedatasets,that,simplyputcouldbeusefulforself-improvementoftheIoTsensoritself,aswellasforthedevelopmentofnew

47N.Duch-Brown,supran40;W.Kerber,J.S.Frank,“DataGovernanceRegimesintheDigitalEconomy:TheExampleofConnectedCars”(November3,2017);availableathttps://ssrn.com/abstract=3064794(accessedonOctober15,2018);W.Kerber“RightsonData:TheEUCommunication“BuildingaEuropeanDataEconomy”fromanEconomicPerspective”(September1,2017).Forthcoming,S.Lohsse,R.Schulze,D.Staudenmayer(eds.),TradingDataintheDigitalEconomy:LegalConceptsandTools,(2017)BadenBaden,Nomos;availableatSSRN:https://ssrn.com/abstract=3033002(accessedonOctober15,2018).48Seesupran2,p.3.49MAbu-Elkheiretal.,“DataManagementfortheInternetofThings:DesignPrimitivesandSolution,Sensors”(2013)Nov(11)p.15582-15612;doi:10.3390/s131115582.


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products,byproductsorservicesthatmighthavenocorrelationwiththeinitialaimforwhichdatawascollectedinthefirstplace,asillustratedinthefigurebelow.Forinstance,datageneratedbylocationsensorscouldbepotentiallyusedbypublisherstounderstandandreachapreciselocalaudienceorgivelocalcontexttoend-users.


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Fig.1:IoTdatamanagementframework50

50Ibid


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Next,weneedtounderstandofwhatIoTplatformsconsist:AnIoTplatformiswhatmakesIoThappenforthedevices,thatis,anIoTplatformisanintegratedservicethatoffersthenecessarytoolstobringphysicalobjectsonline.Tryingtomakeitassimpleaspossible,anddependingonthetoolsitprovidesanIoTplatformcanbeclassifiedas:- End-to-endorGeneralIoTplatform,providingthehardware,software,

connectivity,securityanddevicemanagementtoolstohandlemillionsofconcurrentdeviceconnections.Awell-knownexampleisParticle;

- Connectivitymanagementplatforms,providinglowpowerandlow-costconnectivitythroughWIFIandcellulartechnologies,asinthecaseofSigfox;

- Cloudplatforms,mainlyenterprisesoftwarevendorsthatareofferedbycloudserviceproviderswhoextendtypicalenterpriseservicestoincludeIoTcapabilities,suchasGoogleCloudorAmazonWebServices;and,

- Dataplatforms,providingdatatoolsthatallowroutingdevicedataandmanagementandvisualizationofdataanalytics,suchasMicrosoftAzure51;

Nonetheless,eachoftheIoTplatformslistedabovecanprovideverydifferentbyproducts,solutionsanduses,completelydifferentfromaverticalperspective;fromsmartsystemssuchasSalesforcethatisconnectedtoMicrosoftOutlook,anOracleDatabaseandvarioussalesphonesystems.Inthiscase,insteadofhavingmultipleplacestosortthroughdata,acustomdesigneddashboardcanbringinallofthisdataintoasinglepaneview.ThisIoTplatformallowscorrelationsdiscoveringandprocesseliminationofinefficiencies.AnothertypeofIoTverticalplatformisanindustrialIoT,normallyusedbymanufacturers,energyorhealthcare,becauseitintegratesBigData,Machine-to-Machine(M2M)communication,machinelearning,smartequipmentorrobots,andanarrayofsensorsintooptimizingprocesseswithinasystem.Lastbutnotleast,ifweconsiderEchoAmazon(popularlyknownasAlexa),thistechnologyincludesparticularcapabilitiesthathasevenmadeApple’sfounderdescribingAlexaasthenextbigIoTplatform52.Andwecouldendlesslycontinue:ThereareIoTplatformsofeveryshapeandsize.Thereareplatformsforspecificindustrieslikecommercialrealestateandfamilyhealth.Somefocusononetypeofdevice:forexample,thereareplatformsfocusedonaugmented-realityheadsets.Somearefocusedonaparticularfunction,likemanufacturing53.ThereareevenIoTplatformsforpets54.Also,fromasingledatasetsperspective,adatamarketplaceisaplatformonwhichdatasetscanbeofferedandaccessed55.OftencitedexamplesaretheMicrosoft

51ForasimilarbreakdownexplanationseeJLee,“HowtoChoosetheRightIoTPlatform:TheUltimateChecklist”Medium,availableat:https://hackernoon.com/how-to-choose-the-right-iot-platform-the-ultimate-checklist-47b5575d4e20(accessedonOctober15,2018).52Seehttp://www.businessinsider.com/steve-wozniak-thinks-amazon-echo-is-the-next-big-platform-2016-3?international=true&r=US&IR=T(accessedonOctober15,2018).53SeeMckinseyGlobalInstitute,“TheInternetofThings:MappingtheValuebeyondtheHype”,June(2015)availableat:www.mckinsey.com(accessedonOctober15,2018).54See“SmartPetTechandTheInternetofThings”at:https://www.gomindsight.com/blog/smart-pet-tech-and-the-internet-of-things/(accessedonOctober15,2018).55F.Schomm,F.Stahl,G.Vossen“Marketplacesfordata:aninitialsurvey”(2013)ACMSIGMODRecord42(1),p.15-26.


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AzureMarketplace,Xignite,Gnip,AggDataorCvedia.Datathatarebeingofferedmaybestaticarchivesoronlinestreamsofnewdata.Differentmodesofaccessmaybeoffered,forinstance,wholerepositories,APIsorsubscriptions.Thesearecalled“dataproducts”aswell,wheretheestimationofthevalueofsuchdatasetsisacontinuouschallenge56.Finally,thelatestreportsonIoTplatformsvendors’aloneintheglobalmarketrevealthattheirnumberreachedanewrecordin2017,reaching450,a25%increasecomparedtothe360ofthepreviousyear57.MostoftheincreaseoccurredintheindustrialandmanufacturingsectorswithmorethanhalfofthevendorsheadquarteredintheUS;TheIoTanalytics’reportalsoshowsthatmorethan30vendorsincludedin2016haveceasedtoexistin2017,theyhaveeithergoneoutofbusinessorbeenacquiredbyothers.Furthermore,ifwesearchCrunchbase58forventure-fundedIoTplatforms,wewillfindwellover100hits.Thislistdoesn’tincludebiggertechnologyplayersenteringthemarketwithIoTplatformslikeMicrosoft,IBM,andSAPorseveralindustrialcompanieswithsimilaraspirationslikeGE,Bosch,andSiemens.Inviewofthiswide-rangingarrayofhorizontalandverticalpotentialmarketsforIoT,rangingfromhardware,software,connectivityandstoragetohumansusingtheinformationcreatedfromdataanalysisinordertomakebetterdecisions.InanecosystemwhereIoTplatformsaretheessentialelement,collaborationbymeansofdatasharingismoreimportantthaneverbefore.Whenbusinesssharedata,itisusuallyformutualbenefit,determinedbycommercialnegotiationandagreedcontractterms.Butasthestudy“Cross-CuttingBusinessModelsforIoT”shows,intheIoTscenario,onestepfurtherthantraditionalcooperationliketheapplicationofanopenbusinessmodel,wheredatasharingisfundamental,willbekey59.TheseprinciplesmightconstituteagoodfirststeptowardsenablingadequatemarketconditionsforbothIoTandAImarketsandforthecreationofB2Bplatforms.B. IntroducingNon-MandatoryContractTermsinB2BOveralltheseprinciplesmaybeseenastoosimplistic,butonecannotlosesightthattheyareframedinaCommunicationandthatitsaccompanyingdocumentmakesclearthat“modelcontracttermsfordifferenttypesofdatasharingagreementsandforsomesectorsortypesofdatasharingarealreadybeing

56A.Muschalle,etal.“Pricingapproachesfordatamarkets”.In:IEEE15thInternationalWorkshoponBusinessIntelligencefortheReal-TimeEnterprise(2012).57Seehttps://iot-analytics.com/iot-platforms-company-list-2017-update/(accessedonOctober15,2018).58Seewww.crunchbase.com(accessedonOctober15,2018).59PricewaterhouseCoopers,ECFinalreport–Study“Cross-CuttingBusinessModelsforIoT”(2017)StudypreparedfortheEuropeanCommissionDGCommunicationsNetworks,Content&Technology,SMARTnumber2016/0027.


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developed.”60ThemeasurecomesoriginallyfromtheTelecommunicationsSector.Inparticular,onpage42oftheAnnextotheCommissionImplementingDecisionontheadoptionoftheworkprogramfor2018andonthefinancingofConnectingEuropeFacility(CEF)61.Weshouldnotforgetthatthetelecommunicationssectorhasalreadyfacedverysimilarproblemsastothegivingaccessandre-usingofcloseddataanditmaybeworthlookingatthemforusefulorinspiringsolutions.

TheConnectingEuropeFacility(CEF)inTelecom62isakeyEUinstrumenttofacilitatecross-borderinteractionbetweenpublicadministrations,businessesandcitizens,bydeployingdigitalserviceinfrastructures(DSIs)andbroadbandnetworks.IfrecallingwhatIoTplatformsconsistof,asexplainingabove,itmakessensetheestablishmentofaCoreServicePlatform(centralhubswhichenabletrans-Europeanconnectivity)withaSupportCentrefordatasharing,tosupporttheknowledgeexchangebetweenallactorsinthedataeconomy.TheaimofthisSupportCentreisalsotoprovidepracticaladvice,bestpracticesandmethodologiesforbothdatasharinganddataanalytics,anditwillbecomeoperativeinearly2019.

Iflookingattheprinciplesindetail,thetransparencyonemightsomewhatresemblesArticle5oftheUnfairTermsinConsumerContractsDirective(UTD)63.Yet,itisimportanttorecallthatB2BrelationshipshavelongbeenunderpinnedbyfreedomofcontractanddistinguishedfromB2Crelationshipswhichareheavilyregulated.Forinstance,theEuropeanCommission’sGreenPaperwhichlookedintoB2Brelationshipsinthesectoroffoodsupplychain64,describedfreedomofcontractasa“cornerstoneofanyB2Brelationshipinthemarketeconomy”65;consequently,partiesshouldbeabletodesigncontractthatbestsuittheirneeds.Nonetheless,thiswell-establishedlegalprincipleisincreasinglyquestionedinrecenttimesduetolackofbargainingpositionofoneofthepartiestonegotiatethetermsonwhichtheytradedatasets.Transparencyisapreconditionforfairnessandgoodfaith.Inthatsense,itmightbeworthlookingatwhattheEuropeanCourtofJustice(ECJ)hasruledonArticle3(1)oftheUTDanditsunfairnesstest.BecausealthoughtheDirectiveappliesexclusivelytoB2Crelationships,theECJhasappliedthisunfairnesstesttosomeB2Btransactions.TheUTDdefinesunfairnessbyresortingtobroadlyformulated

60Seep.6ofECSWD(2018)125final,supran2.(Certainincreaselevelofclarityorbetterplacementofthisnon-regulatorymeasurewouldhavebeenwelcome,asoneneedsliterallytofishintofindit).61AnnextotheCommissionImplementingDecisionontheadoptionoftheworkprogramfor2018onthefinancingofConnectingEuropeFacility(CEF)–TelecommunicationsSector,C(2018)568final–Annex,February5,2018.62See:https://ec.europa.eu/inea/en/connecting-europe-facility(accessedonOctober15,2018).63CouncilDirective93/13/EECof5April1993onunfairtermsinconsumercontracts,OJL95,21.04.1993,p.29-34,Article5:“Inthecaseofcontractswhereallorcertaintermsofferedtotheconsumerareinwriting,thesetermsmustalwaysbedraftedinplain,intelligiblelanguage.Wherethereisdoubtaboutthemeaningofaterm,theinterpretationmostfavorabletotheconsumershallprevail.ThisruleoninterpretationshallnotapplyinthecontextoftheprocedureslaiddowninArticle7(2).”64GreenPaperonUnfairTradingPracticesintheBusiness-to-BusinessFoodandNon-FoodSupplyChaininEurope,COM(2013)37final.65Ibidp6.


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standardsofgoodfaithandsignificantimbalance.TheECJhasstatedinbothInvitelandVBPénzügyithatitisuptothenationalcourtstoadjudicatewhethersuch“significantimbalance”existsinviewoftherespectivecontracttermandallotherterms,basedontheapplicablecontractrulesofthenationallawoftheMemberState66.Therefore,nationalrulesmustconstruethebenchmarkforfindingwhetheracontractualtermcausesa“significantimbalance”andis“contrarytogoodfaith”67.

AttheEuropeanlevel68recentlegislativeproposalshaveagreeduponthatB2Brelationshipsarenottobecompletelyleftforthepartiestodeterminebutthattheweakerparty,oftenasmallandmediumsizedcompany,shouldbegivencertainlegalprotectioninawaythatcannotbedisplacedoragreedotherwisebetweentheparties.DeclarationsmadebyElżbietaBieńkowska,CommissionerforInternalMarket,Industry,EntrepreneurshipandSMEs,onApril24,2018followthislineofthinking:"WewanttopreventthefragmentationoftheSingleMarketthroughapatchworkofnationalrules.Today,theCommissioniscomingforwardwithanapproachthatwillgiveEUbusinesses–particularlysmallerones–thetransparencyandredressmechanismsthatwillhelpthemembracethedigitaleconomy.Italsogivesplatformslegalcertainty."Moreover,asexplainedinprevioussections,inthePSD2Directive,thereisanexamplewhereasmallormediumsizedcompanyistreatedasaconsumerinaB2Brelationshipwithregardstotransparencyofconditionsandinformationrequirementsforpaymentservices69.Alltheabovebuildsuponthestudiesandconsultationsrelatedtodataownershipanddatasharing70.

IntheGuide,theprincipleoftransparencyislinkedtoclearlyexpresswhohasaccesstothedatasets,whattypeofdatasetsaregivenaccesstoandtowhatlevelofdetail,andalsoforwhatpurpose(s)isaccessand/oruselicense,allkeytogaintrustamongparties.Whetherthiscouldalsobeamatterofunfairness,thetruthisthattobeabletoidentifywhohasbeengivenaccesstodatasetsisessentialtoeitherdetermineanykindofliabilityforaccuracyorcompletenessproblems,damagesarisingfromfurtherconnectionsoruseofthedatasetbymachines,devices,datauserorthirdparties.Butalso,fordeterminingliabilityincaseof

66CaseC-472/10NemzetiFogyasztóvédelmiHatóságvInvitelTávközlésiZrt(“Invitel”),EU:C:2012:242,para30;CaseC-137/08VBPénzügyiLízingZrt.vFerencSchneider(“VBPézügyi”),EU:C:2010:659para44.67ForfurtherdetailsseeR.Manko,“UnfaircontracttermsinEUlaw”LibraryoftheEuropeanParliament,ref.130624REV1,2013,availableat:http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130624/LDM_BRI(2013)130624_REV1_EN.pdf(accessedonOctober15,2018).68SeePSD2(supran30);ProposalforaDirectiveoftheEuropeanParliamentandoftheCouncilonunfairtradingpracticesinbusiness-to-businessrelationshipsinthefoodsupplychain,COM(2018)173;ECPressRelease“OnlinePlatforms:Commissionsetsnewstandardsontransparencyandfairness”,April26,2018(IP/18/3372).69SeePSD2recital53andarticle38(supran30)70SeeAccesstoIn-VehicleReportandEmergingIssuesReport(supran38);AnnextotheSynopsisReport(supran45);N.Duch-Brownetal.,“TheEconomicsofOwnership,AccessandTradeinDigitalData”(2017),JRCDigitalEconomyWorkingPaper2017-01,availableat:https://ec.europa.eu/jrc/sites/jrcsh/files/jrc104756.pdf(accessedonOctober15,2018).


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unlawfuldisclosureoftradesecrets.Tentatively,atransparencyprinciplecouldpotentiallyhelpatassessingarefusaltolicensesituationasthemoreinformationprovidedinthecontractonthedatasets,theeasieritcouldbetoevaluatedatasetssubstitutivity.Similarreasonsfallunderthesharedvaluecreationprincipleandrespectforeachother’sinterests.Theassuranceofundistortedcompetitionislimitedtotheexchangeofcommerciallysensitivedata.Thiscouldsuggestareassuranceoftheprotectionoftradesecrets,andprotectingagainsttamperinginparticular.BothwereflaggedintheSynopsisReportastwocorefearsforB2Brelationshipsnottoshareinformationaswellaswhybusinesspartnersinjointprojectsaresometimesnotallowedtoreceivedata71.Also,ifwelookattherelationshipbetweensuppliersandanendproducer,acontractualprincipleadvocatingundistortedcompetitioncouldfit.Let’sconsidertheBlockExemptionRegulationintheMotorVehicleSectorfortherepairandmaintenanceofmotorvehiclesandforthesupplyofspareparts.72.Thetreatmentofdataonthefunctioningofthevehiclebetweenthesupplierofpartandthemanufacturerofthevehicleisnotregulatedwithintheblockexemption.Accordingly,thereistheriskthatthevehicle’smanufacturercouldimplementcontractualtermsondatatreatmentconcerningthepartsthatwouldplacethesupplieratadisadvantagedposition.

Morecomplicatedatfirstglanceisthelastprinciple,namely,(to)minimizeddatalock-inbyenablingdataportability.Argumentssupportingitaretobeframedundertwoparadigms:ontheonehand,theneedtotrainartificialintelligenceapplicationstoboostinnovation73;ontheotherhand,theneedtodevelopopen,technicalstandardstofosterinteroperability(enablingdataportability)74BothcombinedwouldultimatelyimproveEurope’scompetitivenessintheinternationaldimension.Anexampleofadata-sharingplatformthatillustratestheaboveisthejointventureofthethreeGermancarmanufacturers,Daimler,BMWandAudi.TheyacquiredNokia’sdigitalmapHERE75in2015asanimportantelementoftheirsystemsforautonomousdriving;in2017,Intelbought15%ofHERE,joiningforcesandlastApril2018,Boschdid,acquiringa5%.ThereareotherstrategicpartnerssuchasPioneer,Esri,DJI,NVIDIAorOracle.Anditisfeasibletobecomeapartner.ThedataproducedbyHEREaresharedandsimultaneouslyusedbythepartnersnotonlyforsystemsofautonomousdriving,butforothermobilitysectorssuchas

71SeeAnnextotheSynopsisReport(supran45)p.15-16.72CommissionRegulation(EU)No.461/2010of27May2010ontheapplicationofArticle101(3)oftheTreatyontheFunctioningoftheEuropeanUniontocategoriesofverticalagreementsandconcertedPartiesinthemotorvehiclesectorOJL129,28.05.2010,p.52-57.73ForargumentssupportingthatdataportabilitywouldfavorAIsee“DataEconomyWorkshopReport”(2017)p.4,availableat:https://ec.europa.eu/information_society/newsroom/image/document/2017-28/data_economy_ws_report_1A1E8516-DE2A-B8C4-54C4F7CA98621166_45938.pdf(accessedonOctober15,2018).74SeeSection6.2.,JRCReport(supran40)p.42-46.75Seewww.here.com(accessedonOctober15,2018).


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transportation;logistics,publishersandadvertising;improvementofcitiesinfrastructures,securepaymentservices,justtonameafew76.OtherexamplesintoasimilardirectionareAutomotiveGradeLinux(AGL)andMobilityxlab77.Theformerisacollaborativeopensourceprojectaimingatbringingtogethercarmanufacturers,suppliersandtechnologycompaniestobuildaLinux-based,opensoftwareplatformforautomotiveapplicationsthatcanserveasthedefactoindustrystandard.Itsunderlyingideaisthatbyadoptingasharedplatformacrosstheindustrywillreducefragmentationandallowcarmanufacturersandsupplierstoreusethesamecodebase,samedata-format,leadingtoinnovationandfastertime-to-marketfornewproducts.Thelatter,Mobilityxlab,isacoalitionofleadingSwedishfirmsthatcooperatewithstartupstodevelopjointprojectsforsolutionstothetransportofthefuture,primarilytomultiplytheuseofAIintheareasofelectrification,connectivityandself-drivingvehicles78.Yet,discussingaboutinteroperabilityinthecontextofdataportabilityorArt.20GDPR79stillraisesanumberofcontroversialissues.Ontheonehand,thelackofobligationsforinteroperabilityinArt.20couldhavedetrimentaleffectsonusers.Forinstance,thelackofinteroperabilityandcompatibilityrequirementscouldleadtoaracetothe“lowestcommondenominator”ofstandarddatasetsprovidedbydatacontrollers.Adoptionofuniversalrequirementstointeroperatewithallotherserviceswouldbeexpensiveforcompanieswithuncertainbenefitsformostusersandsuchaburdenwouldfalldisproportionatelyonstart-upsandSMEs,whowouldhavetoenterthemarketwithsystemsinplacetointeroperatewithallothersystemsalreadyinthemarket80.Eventually,wherecompetingserviceswouldneedtohavecommonfeaturesandfunctions,itwouldresultinlessvarietyandfeaturecompetition,alsoreducingconsumerchoiceandfinallyreducinginnovation81.Additionally,asaJointResearchCenter’sreportindicates,manyoftheeconomicresultssupportingthatawelfare-maximizingpolicymakerwouldpreferinteroperableservicesinbothtraditionalandplatformmarkets,havebeenextractedfromanalysesthatdonottakedataconsiderationsexplicitly.Therefore,moreeconomicresearchisnecessarytolaunchdefinitiveconclusions82.Allinall,therearequitemanyincentivesfortheprivatesectortofolloworatleasttonotdisregardthesesetofguidingprinciples.Undertheseconditions,andasbothscholarsandindustryoperatorshavetabledoverthelastyearsintheir

76Ibid.77Seehttps://www.automotivelinux.org/andhttps://www.mobilityxlab.com/en/news/artificial-intelligence-focus(accessedonOctober15,2018).78Ibid.79Regulation(EU)2016/679oftheEuropeanParliamentandoftheCouncilof27April2016ontheprotectionofnaturalpersonswithregardtotheprocessingofpersonaldataandonthefreemovementofsuchdata,andrepealingDirective95/46/EC(GeneralDataProtectionRegulation),OJL119,4.5.2016,p.1-88.80SeeRobinWilton’sopinion,fromInternetSocietyduringtheOECDExpertWorkshoponEnhancedAccesstoData:ReconcilingRisksandBenefitsofDataRe-Use,May(2018),para9581Ibid.82SeeJRCReport(supran38),p.46.


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dialoguesandconsultationswiththeCommission,itseemstheapproachtakengoesfinallytowards“(regulating)self-regulation”borrowingProf.Dr.Hilty’spun83.C. ChallengesforCompetitionLaw:TheExampleofaRefusaltoGrantAccessto

DatasetsItisnottheintentionofthisanalysistocompareapublicpolicytoolsuchastheprinciplescontainedintheCommission’scommunication“TowardsaCommonEuropeanDataSpace”witharegulatorytoolsuchascompetitionlaw.Yet,somereflectionsarenecessaryherefortworeasons:First,theresultsofthepublicconsultationon“BuildingaEuropeanDataEconomy”showedthatamajorityofstakeholderswheresatisfiedwiththeeffectivenessofcompetitionlawanditsenforcementinaddressingpotentiallyanticompetitivebehaviorofcompaniesholdingorusingdata84.Yet,severalrespondentspointedtothedifficultiesthattheconceptof“datasharing”couldposetocompetitionlaw,aswellasthatstakeholdersbelievedthatcompetitionlawshouldevolveinordertoadapttothedigitaleconomyanddulyaccountfortherealityofdata-drivenmarkets.Also,somescholarshavepointedoutthataccesstodataisadisputedtopicundergeneralcompetitionlaw85.Asthiscontributionlooksatdatasharing,thepapercircumscribestotheexampleofrefusaltolicenseaccesstodatasets.Itisarticle102TFEU,whichbansthemisuseofadominantpositionbyoneormoreundertakings.TheCJEUhasruledthatthisprovisionmaybeusedforthegrantingofcompulsorylicenses(even)toinformationprotectedbyintellectualpropertyrights86.CompulsorylicensingfordataaccessisatopicthathasalsobeendiscussedinreferencetosectorspecificregulationssuchasthePSIDirective87,theeCallRegulation88andinthefieldoffinancialservices89,orinreferencetoe-platforms90.

83SeeR.Hilty,“BigData:OwnershipandUseintheDigitalAge”inGlobalPerspectivesandChallengesfortheIntellectualPropertySystem,No5,June2018,p.87-94.Inthesameline,seealsoM.Leistner,“BigDataandtheEUDatabasesDirective96/9/EC”inS.Lohsse,supran22,p38.84SeeAnnextotheSynopsisReport(supran45),p.13.85BLundqvist“BigData,OpenData,PrivacyRegulations,IntellectualPropertyandCompetitionLawinanInternetofThingsWorld–TheIssueofAccess”(2016)StockholmFacultyofLawResearchPapers,p.3,availableatSSRN:https://ssrn.com/abstract=2891484;JDrexl“DesigningCompetitiveMarketsforIndustrialData-BetweenPropertisationandAccess”8(2017)JIPITEC257para1.86RTEandITVvCommission(“Magill”),C-241/91PandC-242/91P,ECLI:EU:C:1995:98,[1995]ECRI-743;IMSHealthGmbH&Co.OHGvNDCHealthGmbH&Co.KG.,C-218/01,ECLI:EU:C:2004:257[2004]ECRI-5039.87SeePSIDirective(supran27)88Regulation(EU)2015/758oftheEuropeanParliamentandoftheCouncilof29April2015concerningtype-approvalrequirementsforthedeploymentoftheeCallin-vehiclesystembasedonthe112serviceandamendingDirective2007/46/EC(E-call)OJL123,19.5.2015,p.77-89.89SeePSD2Directive(supran30).


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Whatalltheseexantesectorialregulationsandproposalshaveincommon,isthattheyimplyanobligationeithertosharethedataortograntopenaccesstothedatacollectingdevice.

Foraunilateralrefusaltolicenseaccesstodatasettobefoundinviolationarticle102,thefollowingconsiderationsaretobeconsidered:Forstarters,thedefinitionoftherelevantmarketplaysacentralroleinallthreeareascompetitionlawregulates.Todetermineabuseofadominantposition,ithasfirsttobedeterminedwhetheracompanyhasadominantpositioninthefirstplace.Andtothatend,itneedstoestablishonwhichmarketitoccupiesthatdominantposition.In1997,theEuropeanCommissionpublishedanoticeonthedefinitionofrelevantmarketsforthepurposesofEUcompetitionlaw91.Accordingly,themarketdefinitioniscomposedoftherelevantproductmarketandtherelevantgeographicmarket.Eversince,theCommissionhascontinuously“commissioned”reportsorlaunchedconsultationsonmarketdefinitionindifferentsectorssuchasthemedia(1997),pharmaceutical(2009),telecoms(2002),etc.92However,theapplicationofcompetitionlawingeneral,andthedefinitionoftherelevantmarketinparticular,areinherentlycase-specific.Forexample,whileassessingmergercontrolinvolvesaprospectiveanalysis,applicationofArt.102(and101)TFEUlookintopastbehavior.

Second,whenlookingatthecurrentpracticeonrefusalstodealandtolicenseasaguide93,thereisonedifficultobstacletoovercomewhenconsideringdatasets.Dataisanon-rivalrousresource;ifdatasetscouldbesubstitutable,meaningthesameindividualdatacouldbefoundinvariousdatasets,thiswouldcountagainsttherequirementofdominance.Thus,arefusaltodealortolicensewouldnotprosper.Finally,ifweconsiderdatasetsnegotiationsforanalyticsinvolvingtechniquesofdataminingbysearchingdatasetsforcorrelations,necessarytoimprovealgorithmsofartificialintelligenceapplications,contractualagreementsonaccesstodatasetsmaysimplyfailbecauseofasymmetriesregardingthevalueofthe

90SeeWMaxwellandTPénard“RegulatingdigitalplatformsinEurope–aWhitePaper”(2015).availableat:www.digitaleurope.orgagainsttheFrenchNationalDigitalCouncil’s(CNN)reportrecommendinglegislationtargetingdigitalplatforms,(accessedonOctober15,2018).91CommissionNoticeonthedefinitionofrelevantmarketforthepurposesofCommunitycompetitionlaw(97/C372/03)(1997)OJC372/5.92Themediasectoristhemoreprolific,allthestudiescanbefoundathttp://ec.europa.eu/competition/sectors/media/documents/index.html;inthecaseofpharmaceuticalindustries:http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html;fortelecommunicationsindustries:http://ec.europa.eu/competition/sectors/telecommunications/overview_en.html.Forstudiesondifferentsectorscanbefoundathttp://ec.europa.eu/competition/sectors/(accessedonOctober15,2018).93ForadetailedexplanationseeDrexl(supran4)p.281-282.


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datasets,notbecauseofanticompetitiveconduct94.AndthiscouldbethecasewithIoTplatforms.

Therefore,Article102maynotbereadilyapplicabletoprovideaccesstodatasetsperse,exceptwhenthosedatasetsareindispensabletoaccessanindustry,orarelevantmarketandpartiesarenotabletoagreeonprice95.

Allinall,insuchanemergingmarketsectorastheIoTplatforms,withsomanyplayersanddifferentniches,abuseofdominantpositionandrefusalstograntaccesstodatamightbeveryproblematictoarticulate.

Thus,relyingoncompetitionlawastheonlyregulatorytool,mightnotbethesmartestmove.Ontheotherhand,followingtheresultsoftheconsultationlaunchedin2017,theideaofsettingthegroundviarecommendingstandardcontracttermswasgenerallypreferredtotheproposaloflegislatinglayingdownnon-mandatoryrulesforB2Bcontracts96.So,theideaproposedbytheCommissiontotestex-antemeasuresinthefieldofcontractualrelationsmaybebeneficialtowardssupportingfairmarketsforIoTproducts,byproductsandservices.

4.3. Business-to-Government(B2G)PrinciplesTheprimaryreasontoputforwardasetofcontractualprinciplesregardingthesupplyofprivatedatatopublicsectorbodiesforpublicinterestpurposesisto“supportthesupply(…)underpreferentialconditionsforre-use.”Thisgoalcouldberephrasedasthewishtoturncloseddataintoopendataforapublicinterestreason(AIinnovation).TheCommissionproposesthesixfollowingprinciplesasguidance:Proportionalityintheuseofprivatesectordata;purposelimitation;“donoharm;”conditionsfordatare-use;mitigatelimitationsofprivatesectordata;and,transparencyandsocietalparticipation.Theyreadasfollows97:

a) Proportionalityintheuseofprivatesectordata:Requestsforsupplyofprivatesectordataunderpreferentialconditionsforre-useshouldbejustifiedbyclearanddemonstrablepublicinterest.Therequestforprivatesectordatashouldbeadequateandrelevanttotheintendedpublicinterestpurposeandbeproportionateintermsofdetails,relevanceanddataprotection.Thecostandeffortrequiredforthesupplyand

94Thisisknownasthe“informationparadox”framedbyArrowinthecontextofpatentlaw.SeeKennethJArrow,“EconomicwelfareandtheAllocationofResourcesforInvention”in:NationalBureauofEconomicResearch(ed.),TheRateandDirectionofInventiveActivity(1962)p.609.95HuaweiTechnologiesCo.LtdvZTECorp.andZTEDeutschlandGmbH,C-170/13,ECLI:EU:C:2015:477[2015].ForacommentaryonthecaseseeC.Tapia,S.Makris,“NegotiatingLicensesForFRAND-accessibleStandardEssentialPatentsInEuropeAfterHuaweivZTE:GuidancefromNationalCourts”ManagingIntellectualProperty,May2018,availableat:http://www.managingip.com/Article/3804014/Negotiating-SEP-licences-in-Europe-after-Huawei-v-ZTE-guidance-from-national-courts.html(accessedonOctober15,2018).96SeeAnnextotheSynopsisReport(supran45)p.20-21.97SeeECCOM(2018)232final,p.13.


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re-useofprivatesectordatashouldbereasonablecomparedwiththeexpectedpublicbenefits.

b) Purposelimitation:Theuseofprivatesectordatashouldbeclearlylimitedforoneorseveralpurposestobespecifiedasclearlyaspossibleinthecontractualprovisionsthatestablishthebusiness-to-governmentcollaboration.Thesemayincludealimitationofdurationfortheuseofthesedata.Theprivatesectorcompanyshouldreceivespecificassurancesthatthedataobtainedwillnotbeusedforunrelatedadministrativeorjudicialprocedures;thestrictlegalandethicalprovisionsgoverningstatisticalconfidentialityintheEuropeanStatisticalSystemcouldserveasamodelinthisregard.

c) ʻDonoharmʼ:Business-to-governmentdatacollaborationmustensurethatlegitimateinterests,notablytheprotectionoftradesecretsandothercommerciallysensitiveinformation,arerespected.Business-to-governmentdatacollaborationshouldallowcompaniestocontinuebeingabletomonetizetheinsightsderivedfromthedatainquestionwithrespecttootherinterestedparties.

d) Conditionsfordatare-use:business-to-governmentdatacollaborationagreementsshouldseektobemutuallybeneficialwhileacknowledgingthepublicinterestgoalbygivingthepublicsectorbodypreferentialtreatmentoverothercustomers.Thisshouldbereflectedinparticularinthelevelofcompensationagreed,thelevelofwhichcouldbelinkedtothepublicinterestpurposepursued.Business-to-governmentdatacollaborationagreementsthatinvolvethesamepublicauthoritiesperformingthesamefunctionsshouldbetreatedinanon-discriminatoryway.Business-to-governmentdatacollaborationagreementsshouldreducetheneedforothertypesofdatacollectionsuchassurveys.Thisshouldreducetheoverallburdenoncitizensandcompanies.

e) Mitigatelimitationsofprivatesectordata:Toaddressthepotentiallimitationsofprivatesectordata,includingpotentialinherentbias,companiessupplyingthedatashouldofferreasonableandproportionatesupporttohelpassessthequalityofthedataforthestatedpurposes,includingthroughthepossibilitytoauditorotherwiseverifythedatawhereverappropriate.Companiesshouldnotberequiredtoimprovethequalityofthedatainquestion.Publicbodies,inturn,shouldensurethatdatacomingfromdifferentsourcesisprocessedinsuchawaytoavoidpossibleʻselectionbiasʼ.

f) Transparencyandsocietalparticipation:business-to-governmentcollaborationshouldbetransparentaboutthepartiestotheagreementandtheirobjectives.Publicbodies’insightsandbestpracticesofbusiness-to-governmentcollaborationshouldbemadepubliclyavailableaslongastheydonotcompromisetheconfidentialityofthedata.

A. Principles’Goal:IncentivizingB2GDataSharingtoFosterAIInnovationFromabusiness-to-governmentperspective,thequestionwouldbehowtofindawaythatprivatecompanieswouldshareandopentheirprivatedatasetstopublicbodiestosupportAIdevelopmentnotonlyformattersofpublicinterestbutforinnovation98.Addontopofthatsuchopennesswouldneedtobeinawaythatprivacyofindividualsisrespectedandguaranteed.Andifthiswouldbepossible,howtosettheconditionsforcollaboratingwithoutharmingbusinesslegitimateinterests,whilealsomitigatingpotentiallimitationsofprivatesectordata.

98TheCommissionalsoaddsintheircommunicationthegoalof“theeconomizationofpublicresources”.Yet,theonlyexampleexplainingitis:“thiscanalsolowertheburdenoncompaniesandcitizensbyavoidingsurveyquestionnaires.”Itwouldbeveryhelpfulifthisconceptisexplainedinfurthercommunications.


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ThreeoftheprinciplesproposedbytheCommission,namely“donoharm”,conditionsfordatare-useandmitigationoflimitationofprivatesectordata,showthatthereisaclearunderstandingthatpursuingapublicgoodisnotasufficientdrivertoincentivedatasharingforinnovation.Businessesareprofitdriven.Theysharedatatypicallybysellingintegratedanalyticsservices,andtheycanprovidedifferentlevelsofaccessunderdifferentbusinessmodels.Fromthisperspective,theseprinciplesaimatcreatingincentivesfortheprivatesectorbyeithersecuringmonetization,compensationorbyloweringcosts:• “Business-to-governmentdatacollaborationshouldallowcompaniesto

continuebeingabletomonetizetheinsightsderivedfromthedatainquestionwithrespecttootherinterestedparties.”

• “Business-to-governmentdatacollaborationagreementsshouldseektobemutuallybeneficialwhileacknowledgingthepublicinterestgoal(…)reflectedinparticularinthelevelofcompensationagreed”.

• “Business-to-governmentdatacollaborationagreementsshouldreducetheneedforothertypesofdatacollectionsuchassurveys.Thisshouldreducetheoverallburdenoncitizensandcompanies.”

• “Companiessupplyingthedatashouldofferreasonableandproportionatesupporttohelpassessthequalityofthedataforthestatedpurposes,(but),shouldnotberequiredtoimprovethequalityofthedata”

Iftheseprincipleswouldturnintoalegislativeproposal,itwouldbecriticalnottolosesightonhowtodevelopincentivesmechanisms.Thiswouldcompriseanassessmentonthelegal,economicandtechnicalobstaclespreventingB2Gdatasharing,andadviseonconcreteactionstopromoteB2Gdatasharingforpublicinterestpurposes.Beyondthat,therearemanyquestionsleftopenintheairsuchaswhetherprivatedatasharedwithpublicbodiescouldbecomeopendata,andifso,whichandtowhatextent;orwhetheritcouldbere-usedforofficialstatistics.ThegoodnewsisthattheDirectiveontheRe-UseofPublicSectorInformationiscurrentlyunderreview,andsomeofitsobjectivesarealignedwiththeseproposedguidingprinciples.Inparticular,addressingtheriskofexcessivefirst-moveradvantagebyrequiringamoretransparentprocessfortheestablishmentofpublic-privatearrangementsby:a) Allowinganycompanytolearnaboutthedatabeingavailable,and,b) Increasingthechanceofawiderrangeofre-usersactuallyexploitingthedata

inquestion99.

ThebadnewsisthatwedonotknowhowthePSIDirectivewouldmoveforward,norwhethertheseprincipleswouldhaveanyimpactatall.Inthemeantime,besidesgivingtheseB2Gprinciplesanoverallweakevaluation,wewouldneedtoseewhethertheCommissionmovesrelativelyquicklyondevelopingthisstrategy.

99COM(2018)125final,p.5andfootnote(19).FordetailsonthecurrentreviewofPSI2,seeProposalforaDirectiveoftheEuropeanParliamentandoftheCouncilofthere-useofpublicsectorinformation(recast),COM(2018)/234final–2018/0111(COD).


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B. Re-UseofClosedDataforPublicInterest:AWin-WinSituation?ThefamouslyWalshandPollock’squote“thecoolestthingwithyourdatawillbedonebysomeoneelse”comesinhandyhere.Governmentagenciesorresearchersmakeuseofprivatecompanydatatoaddresssocietalissues.AstheCommunicationpointsout,statisticalofficesinsomeEUMemberStatesusedatafrommobiletelecomoperatorsasanalternativesourceforofficialstatistics,forinstanceonmobilityordemography100.Nonetheless,aprivatetelecomcompanyasVodafoneofferspackagedservicestopublicbodiesbasedonthemobilitydatagatheredbytheirantennas.Indevelopingcountries,theyoffertheirdataservicesasanalternativetopoor-qualityofficialstatistics,andtheirmainincentiveliesincorporateimageandthepotentialindirectbusinessbenefits101.Theseexactsamedatasetshaveprovedaninvaluablesourceforcontrollingoutbreaks,surveillingandmodelingofinfectiousdiseases102.Symmetrically,asexplainedpreviously,there-useof(certain)publicsectorinformationbyprivatecompaniesisregulatedbythePublic-SectorInformation,andinforcesinceDecember2003103.TheevolvingapproachofthisDirectiveistoovercometheresistanceamongpublicbodiesinMemberStatestomakepublicdatamoreaccessibletotheprivatesector,obviouslysafeguardingthefundamentalrightofprivacyandpersonaldataprotectionofindividualcitizens.Thereareotherexamplesintheacquiswhereaccesstoinformationispromotedbyspecificlegislativemeansbasedonthenatureoftheinformation.Forinstance,scientificinformationisoftencontrolledbyacademicpublisherswhotendtoseekexclusivelicensessotodigitallymanagementofsuchinformation(publications).Whilepublicinstitutionstendtopromoteopen-accesssystems.TheCommissionRecommendationof17July2012onaccesstoandpreservationofscientificinformation104providesasetoftoolsastoensureincentivessothatbusinessbenefitaswellassocietyandultimatelypromotetheuseofopen-accesssystems.

Yet,whenconsideringpublicinterest,somecommentsaredeemednecessary.First,theCommission’sproportionalityprinciplereiteratesthatthepublicinterestreasonforrequestingdatashouldbeclearlyanddemonstrablyjustified.Itshowsaclearintentionofanenhancedpublicinterestreason,i.e.togiveanextraassurancetoprivatecompanieswhenhandingovertheirprivatedata.ThereareexamplesintheEuropeanacquissuchastheprocessingofdataforarchiving,scientificorhistoricalresearchorstatisticalpurposes,andsafeguardedbythe

100ECCom(2018)125final,p.12.101D2.2FirstReportonPolicyConclusions–UpdateoftheEuropeanDataMarketStudy(SMART2016/0063),p.31.102SeeS.Bansaletal.,“BigDataforInfectiousDiseaseSurveillanceandModeling”,JInfectDis.(2016)Dec1;214(Suppl.4),p.375–379.Publishedonline2016Nov14.doi:10.1093/infdis/jiw400,103SeePSI(supran27).104CommissionRecommendationof17July2012onaccesstoandpreservationofscientificinformation,C(2012)4890final.


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GeneralDataProtectionRegulation105.Inthefieldofpatentlaw,forinstancetheEURegulationoncompulsorylicensingofpatentsforthemanufactureofpharmaceuticalproductsforexporttocountrieswithpublichealthproblemsoutsidetheEU,whereaccesstothepatentinformationshallbegiventoothersagainstafee106.Orinthecaseoflawenforcementandnationalsecurity107.Thequestioninthecaseoftheseprinciplescomeswiththeirlegalstatus.Iftheyareanon-bindinginstrument,howarequesttosupplyprivatedatabasedon(enhancedornot)publicinterestcanbeenforced?Itlooksgoodonpaper,buttherearenoinstrumentsthatallowthisprincipletoactuallyoperate.Second,canthefundamentalrightofprivacybeoverriddenbypublicinterest?Andifso,howwouldthisaffectasupplyingofprivatedatabyacompanytoapublicbodyinthecontextoftheseprinciples?ThesequestionsariseafterarulingbytheCourtofJusticeoftheEUin2017,relatedtotheUniversalServicesDirectiveandtelephoneguidesdata,Tele2(Netherlands)andOthers108.EuropeanDirectoryAssistance(EDA)isaBelgiancompanyofferingdirectoryenquiryservicesanddirectoriesaccessiblefromBelgianterritory.EDArequestedthecompanieswhichassigntelephonenumberstosubscribersintheNetherlands(namely,Tele2,ZiggoandVodafoneLibertel)tomakeavailabletoEDAdatarelatingtotheirsubscribers,relyingonanobligation

105SeeArt.89oftheGeneralDataProtectionRegulation(supran79).106SeeRegulation(EC)no816/2006oftheEuropeanParliamentandoftheCouncilof17May2006oncompulsorylicensingofpatentsrelatingtothemanufactureofpharmaceuticalproductsforexporttocountrieswithpublichealthproblems,9.6.2006,OJL157/1.107AgoodexampleistheMutualLegalAssistanceTreaties(MLATs)whichareineffectbetweenandamongcountriesaroundtheworldandcanprovidegovernmentstheabilitytoaccessdatainonejurisdictionbutneededforlawfulinvestigativepurposesinanother.Forexample,GermanysignedaMutualLegalAssistanceTreatyinCriminalMatterswiththeUnitedStatesin2003andaSupplementaryTreatytotheMutualLegalAssistanceTreatyinCriminalMattersin2006.BothtreatiesenteredintoforceonOctober18,2009andallowauthoritiesineachcountrytorequestandreceiveinformationlocatedintheother’sjurisdiction(includinginformationstoredinthird-partyfacilitiesclouds).Forfurtherinformationsee:W.Maxwell,“AGlobalReality:GovernmentalAccesstoDataintheCloud”,HoganLovellsWhitePaper,May2012.Atinternationallevel,theEU-U.S.andSwiss-U.S.PrivacyShieldFrameworks.TheseweredesignedbytheU.S.DepartmentofCommerce,theECandtheSwissAdministrationtoprovidecompaniesonbothsidesoftheAtlanticwithamechanismtocomplywithdataprotectionrequirementswhentransferringpersonaldatafromtheEuropeanUnionandSwitzerlandtotheUnitedStatesinsupportoftransatlanticcommerce.Moreinformationat:https://www.privacyshield.gov/welcome(accessedonOctober15,2018).Forfurtherinformationseealso:J.V.J.vanHoboken,A.Arnbak,N.A.N.M.vanEijk,N.A.N.M.,“ObscuredbyCloudsorHowtoAddressGovernmentalAccesstoCloudDatafromAbroad”(June9,2013).PrivacyLawScholarsConference2013.AvailableatSSRN:https://ssrn.com/abstract=2276103(accessedonOctober15,2018);T.Christakis,“LostintheCloud?LawEnforcementCross-BorderAccesstoDataAfterthe“ClarifyingLawfulOverseasUseofData”(Cloud)ActAndE-Evidence”,FICObservatory,June28,2018,availableat:https://observatoire-fic.com/en/lost-in-the-cloud-law-enforcement-cross-border-access-to-data-after-the-clarifying-lawful-overseas-use-of-data-cloud-act-and-e-evidence/(accessedonOctober15,2018).108CaseC-536/15Tele2(Netherlands)BV,ZiggoBVandVodafoneLibertelBVvAutoriteitConsumentenMarkt(ACM),ECLI:EU:C:2017:214[2017].


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providedforunderDutchlaw,whichisitselfthetranspositionofArticle25(2)oftheEuropeanUniversalServiceDirective109.TheCourtwasaskedwhetheranundertakingisrequiredtomakedatarelatingtoitssubscribersavailabletoaproviderofdirectoryenquiryservicesanddirectoriesestablishedinanotherMemberState;andwhetheritisnecessarytoleavethesubscriberswiththechoicetogiveornottheirconsentdependingonthecountryinwhichtheundertakingrequestingthatdataprovidesitsservices.Tothefirstquestion,theCJEUdeclaredthattheUniversalServiceDirectivecoversallrequestsmadebyanundertakingestablishedinaMemberStateotherthanthatinwhichtheundertakingswhichassigntelephonenumberstosubscribersareestablished.Tothesecondquestion,theCourtconfirmedthatthepassingofthesamedatatoanotherundertakingintendingtopublishapublicdirectorydidnotrequiredsubscriber’s“renewedconsent”.

Itisundeniablethatdataheldbyprivatecompaniescanbeinvaluableforaddressingsocialissues.Theyarenotalowhangingfruit:theyrequiresubstantialinvestmentandadegreeofdirectinvolvementforthesupplierofthedatasets.Thus,amandatorydatasharingmeasurewithoutcontemplatingreturnsoninvestmentcouldputinjeopardytheemergingdatadriveneconomyaswellasthedevelopmentofartificialintelligence.Eachecosystemisbuildingitsownsetofbusinessmodelsandorganizationalarrangementstofittheirparticularsystemofincentives,thusforaB2Gdatasharingrelationshiptomaximize,thisshouldbethewaytoo.Andlastbutnotleast,asregardstotheinformationcontainedinprivatedataorbettersaid,privatedatasets,adistinctionbetweenwhichareinthepublicinterestandwhichareonlyofcommercialinterestisverydifficulttomake.Toovercomethishighlychallengingtask,theprinciplesproposedbytheCommissiontrytosetaframeworkwherethesupplyofprivatedatasetsshouldbemutuallybeneficialandproportionatelycompensatedtothesupplier.Theuseofwordsandexpressionssuchas“proportionality”,“purposelimitation”,“clearanddemonstrablepublicinterest”,“donoharm”,“mitigatelimitationsofprivatedata”,clearlysuggesttheCommission’sgoalistobuildontrustwhilecreatingbusinessincentivestofosterthiskindofdataflow.Totakeintoaccounttheinvestmentindatacollectionoradaptationthatwouldbenecessarybeforeanyprivatedatasetcouldbesuppliedandusedbypublicbodies(conversionintorelevantformats,anonymizationofpersonaldataorconfidentialbusinessinformation)whileallowingcompaniestokeeponmonetizingtheinsightsderivedfromthedatasetsprovidedtopublicbodieswithrespecttothirdparties.

Inthisscenariothereisno“silverbullet”toensureaboostofEurope’stechnologyandthedemocratizationofartificialintelligencetechnology.Itisamatterof

109Art.25:“Operatorassistanceanddirectoryenquiryservices.(2).MemberStatesshallensurethatallundertakingswhichassigntelephonenumberstosubscribersmeetallreasonablerequeststomakeavailable,forthepurposesoftheprovisionofpubliclyavailabledirectoryenquiryservicesanddirectories,therelevantinformationinanagreedformatontermswhicharefair,objective,costorientedandnon-discriminatory.”


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settingtherightpolicymixofraisingawarenessamongthemarketplayersandprovidinginformationandguidanceaboutoptions,modalitiesandbuildingtrusttoremovefears.Inthissense,thesetofprinciplesassuch,withoutanyfurtherenforcementmeasuresandthearticulationofrealincentivemechanisms,wouldamounttoaquitenaïveproposition.

5. Conclusions

Inthisdigitaleraofsharingsupplychaindata,companiesonthemoveneedtodevelopbusinessgrowthstrategieswithAIplayingacentralroletogaininsights,knowledgeandultimatelyinnovateandbecompetitive.Dataheldbyprivatecompaniescanbeinvaluableforaddressingsocietalissues,orforgeneratingnewproductsandservices.Nevertheless,itisstillunclearifalldataoronlycertaindatasetsorevenwhethersuchdatasets,sincetheyarenotrealtimedataandhavebeenanalyzedandprocessedaccordingtocertaininterests,arealreadybias.Therefore,oneneedstobeverycarefulandmaybebeforejumpingintosharingdataasamatterofprinciple,furtherresearchonwhatkindofdataareweinneedofsharingtoaddresstheaboveobjectives.TheEUhasbeenstrugglingforsometimeovertheneedforlegalprotectionofdata“ownership”intermsofproperty,evenconsideringthecreationofanewintellectualpropertyright.Thesetwosetsofprinciplesonprivatedatasharing,despiteoftheirsimplicity,putonthetableanimportantquestionforreflection:ShouldEuropemoveawayfromdiscussingaboutaregulatoryapproachtodatapropertyandaccesstodata,andratherfocusonelaboratingontheproblemofhowtofosterdatasharinganddatacollaborationtofindbettersolutions?Creatingeconomicincentiveisnecessarytoevolvefroma“one-companyphilanthropy”modelfordatasharingtoanopendatasharingcommunityincludingcompetingfirms.Itisalsocriticaltoclarifytheresponsibilitiesandrolesbygovernmentsandbyprivatesectoractorsonissuessuchasdataaccess,datasharinganddataquality.Newlegislationwilljusttaketoolongtoaddressthesequestions,whiletheamountofpowerdatagivetocompaniescannotbeleftwithoutregulatoryintervention,andjustinthehandsofstakeholderstobesortedoutbythemarket.However,insteadoflookingtowardsaverticalapproach,theCommissionshouldlookhorizontally,asEuropedocountswithconsiderableestablishedrulesindifferentfieldssuchascompetitionlaworintellectualpropertythatcouldbeappliedoradaptedtothenew“datadriven”reality.Atasectoriallevel,itwouldnothurtlookingclosertothetelecommunicationssector,alreadyexperiencedatestablishingformaland“quasi-formal”standardsfortheindustry,inparticularthestandardizationprocesses,standardsettinganddevelopingorganizations,theuseofFRANDcommitments,etc.SamegoestotheOpenSourcemovement,aprototypeforopeninnovation,asitallowsindependentcompaniestoinnovateinacollaborativeprocess,wheresharingisthekey.


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Movingtowardadatasharingmantraisurgenttoencouragenotonlyfurtherqualitydatasetstrainingcontributions,buttoboostthedevelopmentofAI-enabledtechnologies,andthesebasicprinciplesareanapproachveryworthconsidering,butweneedmore.Also,thedevelopmentofinstrumentswithinthecontextoffreedomofcontractaimingatprotectingtheweakerparty(orathirdparty)fromunfairexploitation,needtobetakenintoaccount.Therefore,theapproachneedstoincludemorethanrecommendationsandmodelsforhowthepartiescandesigntheirowncontractualarrangements.Weneedanormativeapproachwithstrongregulators,inordertoprotectbothparties’freedomofcontract.Butatleastfornow,similartoBuddhism,theseprinciplessettherightmantraforapotentialartificialintelligencenirvana.

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